Shares of Uber Technologies Inc (NYSE:UBER) fell close to 5% on Wednesday after the company reported its first-quarter print.
On CNBC's "Options Action," Michael Khouw of Optimize Advisors said that Uber traded well over four times its average daily call volume.
There was a buyer of 2,500 of the June 40/50 call spreads at an average price of $1.23 per contract, Khouw mentioned. “Ultimately, 10,000 of those traded by the end of the day. That is well out of the money,” he stated.
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Shares of Uber Technologies would need to rise by at least 50% for that trader just to break even, and the higher strike call that they sold is 80% out of the money, Khouw said.
“It is possible that a trade like that could be used as a partial hedge against a short position but either way it indicates some assessment that there’s a possibility of the stock somehow rebounds. That’s quite a move,” he added.
