Unusual Options Activity: Revisiting 3 Bets I Might Have Made 6 Weeks Ago

When you receive today’s newsletter (Friday), I will be more than 1,100 miles away from Halifax, where I live, visiting friends in Toronto, the place where I was born, and where I lived for more than 50 years until moving to Canada’s east coast in 2018.

Enough of the geography lesson. Let’s get down to brass tacks. 

Thinking about a theme for today’s newsletter, I wanted to look back on a previous day’s unusual options activity, doing a rearview, hindsight kind of analysis of options strategies I might have used given what was staring me in the face on that day.

I concluded that six weeks, give or take, was a good DTE (days to expiration) to reference, since many of the multi-leg option strategies investors use have DTEs between 30 and 60 days.

Because I use the unusual options activity from the previous day for my Friday commentary, April 2 is the reference date for a six-week DTE to today’s date, May 15. 

There are plenty of possibilities. Here are the three options strategies that jump out for me.

Have an excellent weekend.

Nike (NKE) 

Nike (NKE) had four unusually active options on April 2. While there are two Long Strangles here, I’m going to focus on the larger volume trades. 

The long strangle, if you’re unfamiliar, is a directional bet. That means the trader expects the share price to make a significant move up or down by expiration. It involves buying a call option and buying a put option at a lower strike price. It is a defined-risk strategy in that your maximum loss is known when you make the bet. It is the net debit paid for the two options. However, the upside potential is unlimited because the long call can rise exponentially over its life. 

It’s not been a good year for Nike. Its shares are down more than 34% year to date.  The Barchart Technical Opinion is a 100% Strong Sell. You can’t get any worse from a technical perspective. The institutional investor who made the trades must feel that CEO Elliott Hill’s turnaround plan is bound to take flight any day now. 

On April 2, the May 15 $42.50 put had a single trade of 91,730, while the May 15 $45 call was 67,220, making this a Skewed Strangle or Ratio Strangle. With a ratio of 1.36:1, the trader is putting more faith in the share price dropping significantly than in its rising significantly.

The net debit on the trade was $3.21 for a total outlay of $25.4 million. That’s the most the trader can lose. As I write this, it’s not looking good. To break even, the share price at the end of today’s trading must be above $48.21 or below $39.29. 

You could roll the strangle out to the end of June, but it could cost you more than you paid in April. If you also rolled the call strike higher and the put lower, you could save a little on the net debit, but the share price still has to move 10-20% in either direction in six weeks. 

This trade was a loser. 

Clorox (CLX)

Clorox (CLX) had two unusually active options on April 2. They point to a Bear Put Spread. 

A bear put spread is a bearish strategy in which you expect the share price to fall over the next 43 days. You would buy a May 15 $100 put and sell a May 15 $95 put. The net debit on the trade based on April 2’s closing prices would be $2.10 per contract. The strategy succeeds if the share price at expiration is below $97.90. The maximum profit of $2.90 is achieved if the share price is below $95 at expiration tomorrow.

Trading at $91.58 as I write this on Thursday afternoon, it’s almost a lock to generate the maximum profit once it expires tomorrow. That’s a 138.1% return (1,172.2% annualized). 

Not too shabby. 

Clorox has struggled to grow over the past few years. Its trailing 12-month sales through March 31 were $6.76 billion, about where they were in fiscal 2020 (June 2020).

Smart bet. 

Royal Caribbean Cruises (RCL)

Royal Caribbean Cruises (RCL) had one unusually active option on April 2. It points to a Covered Call with a twist. 

A covered call is when you already own RCL stock and sell the May 15 $290 call short for premium income. You’re bullish on Royal Caribbean in the long term (I am), but you don’t think it will move much in the six weeks between April 2 and May 15. The covered call also works by simultaneously buying the stock and selling the May 15 $290 call short. 

Breaking down the trades on April 2 for the May 15 call, there were two trades of 2,000 calls each, executed at different times during the trading day. 

The trade at 10:43:43 has a B under the asterisk code. That means buy to open. Therefore, this trade for 2,000 May 15 $290 calls was likely a new long position opened for $3.6 million [2,000 * $18 trade price * 100].

The trade at 12:30 for 2,000 is also at the ask price, suggesting an institution is adding to its RCL position. Or, it could be a trader buying to close a short position to cap their losses from the call portion of their covered call. 

That’s hard to know. 

What I do know is that the buyer of calls at $18.90 or $18.00 has seen RCL’s share price fall by 3% to 4% over the past six weeks. RCL is down about 4.4% in 2026. That’s not bad considering fuel prices are higher. 

With RCL down from its August 2025 high of $366.50, now might be a good time to take a flyer on Royal Caribbean long calls.