4 Unusually Active Options Yesterday Made for a FUN Short Iron Condor

The markets came back to earth on Thursday with all three major indexes losing ground on the day. 

The Dow Jones Industrial Average lost 0.85%, breaking a 5-day winning streak, while the S&P 500 and Nasdaq Composite lost 0.18% and 0.06%, respectively. 

The good news for bulls: many of yesterday’s earnings reports from tech stocks were positive. Atlassian (TEAM), Cloudflare (NET) and Microchip Technology (MCHP) all had good quarters. All three are up in Friday’s pre-market trading.

One stock that wasn’t so lucky was Six Flags Entertainment (FUN). FUN shares fell 16% on Thursday after it reported weak Q2 2026 results. 

As a result of the earnings dud, both its share volume -- 8.98 million, nearly four times the 30-day average -- and its options volume -- 45,726, 16.8 times its 30-day average -- were unusually active.  

Two FUN call options from yesterday made Barchart’s list of unusual options activity, while two put options would have if not for the minimum open interest requirement of 100 contracts. 

The four options made for a FUN Short Iron Condor. Let’s dig into it. 

Have an excellent weekend.

The 4 Fun Options in Question

Below are the two unusually active call options from yesterday. 

As you can see, both calls expire on Dec. 18. Both had similar volumes, slightly over 10,000. The $25 strike had the 9th-highest Vol/OI (volume-to-open-interest) ratio of 47.95. The $20 strike was further back, but still high, at 11,98%. 

Now, let’s look at four trades that all took place yesterday at 1:01 p.m. ET. Not surprisingly, the four all had volume of 10,000. As I said in the introduction, they appear to set up for a short iron condor. I’ll get into that in a little bit, but first I want to spend a little time discussing Six Flags’ business. 

It’s Been Awhile Since I’ve Looked at FUN

It could be more than five years since I’ve covered the theme park operator. I definitely know I didn’t write about it when it merged with Cedar Fair in July 2024. I’ve never been convinced of its ability to deliver profitable growth. 

Yesterday, as I mentioned, FUN lost 16% on weak results that included missing Wall Street’s revenue estimate by $63.1 million. At the same time, its attendance figure of 13.1 million visitors was also shy of analyst expectations. 

As public companies like to do, Six Flags attributed the weaker results to several factors outside of its control: 1) Spring break this year fell in the first quarter, not the second quarter, as it did in 2025, 2) It had 3% fewer operating days in Q2 2026, and 3) the sale of its seven non-core parks contributed to the shortfall. 

All three do have some validity, but I never like to see companies explaining away results. They are what they are. 

Having not followed FUN for many years, I was not aware that it launched several initiatives at the beginning of fiscal 2026 to strengthen its recurring revenue and financial performance in the long run. 

“[T]hese initiatives strengthen recurring revenue, enhance visibility into future demand, and support stronger attendance and financial performance over time,” CEO John Reilly stated in Six Flags’ Q2 2026 press release.

The good news from the second quarter was that operating income was $88.6 million, 19% higher than a year ago. The bad news — interest expense was $102.1 million, 10.4% higher than a year ago, erasing all of its operating profits and then some. If you really want to paint a positive picture of its business, its same-park adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $249 million, 7% higher than a year ago. 

The big issue I have with Six Flags’ business model is that it’s not much different from movie theaters, where its big profits come from food, merchandise, and games, where the gross margins are around 75%. 

Instead of being reliant on big box office hits like The Odyssey, it’s reliant on weather and interest in the latest and greatest roller coasters and other park rides. That’s a tough way to make money consistently. 

If it wants to attract more investors, it should be more open about the number of active season passes it has, rather than just saying the active pass base was up 6% over last year. 

It’s not a stock I would own. But that doesn’t mean you shouldn’t. 

Now, back to the short iron condor. 

FUN’s Short Iron Condor

The short iron condor four-legged trade involves selling one call while buying another call with a higher strike price and selling one put while buying another put with a lower strike price. 

So, the four trades shown earlier involved selling the $20 call, buying the $25 call, selling the $12.50 put, and buying the $10 put. That’s $1.5 million going out and $1.9 million coming in through premium income and a net credit of $400,000, or $40 per contract. 

The trader/investor is betting that FUN’s share price will trade in a range from $12.50 to $20 between now and Dec. 18. If so, they generate a maximum profit of $400,000. 

This is an income-driven trade that skews slightly bearish. We know this because the $2.50 put spread is less than the $5 call spread. 

The maximum loss on the puts would be $2.1 million [$12.50 strike price - $10.00 strike price - $0.40 net credit * 10,000 * 100] if the share price is $10 or lower at expiration. The maximum loss on the calls is $4.6 million [$25 strike price - $20 strike price - $0.40 net credit * 10,000 * 100] if the share price at expiration is $25 or higher.  

The trader/Investor’s bigger concern is a move on the downside, rather than the upside, and so the bet’s been made to ensure the maximum loss is less on the former and higher on the latter.  

While a four-legged bet can seem intimidating, you’re really just combining a Bear Call Spread with a Bull Put Spread. 

Now have FUN.