$GPS - The Gap - Follow The Whale swing

Unusual Options Activity
I have a cousin who works in the fashion industry and he’s a $GPS Gap bull. Last week he told me that he thinks they’re about to announce some new collection, kinda like how they announced the Kanye collection last year. I forgot about it, and decided to do a bit of digging tonight.
Edit: It was this: Yeezy Gap & Balenciaga Partner For New Collection

So I started poking around $GPS data, and noticed that $GPS has some fucking weird options flow.

Based on what my cousin told me, I thought hmm let’s take a look at barchart. And I found that very strangely, February 4 has unusual put/call ratio compared to literally any other opex and Feb 4 isn’t even a monthly opex. Take a look:

Then I went on Unusual Whales as always, and checked for when these were bought. It looks like on January 5, someone loaded the boat with Feb 4 20c and looks like they loaded Feb 18.5c on Jan 3. They’re down on their investment though as the stock tanked right after they bought. But basically it looks like one trader owns the entire 15000 OI on the 20c which is around $750K, and it looks like they might own the 18.5c too based on the UW flow.

Screenshot of the day the options were bought:

Screenshot of the ~15,000 OI jump made by the whale buying on January 5 for the 20c.

Screenshot of the massive 18.5c purchase on Jan 3 and then apparent rolling into 20c on Jan 5.

Snippet of the purchases on Jan 5 FYI:

Now, the other day Gap did put out some NFT news and the stock moved up as a result, but I’m not convinced that this is the price move that the whale was waiting for, or maybe they were just wrong… idk tho

What am I doing with all this?
Gonna follow the whale and buy a lottery ticket in the February 4 20c and see what happens.

4 Likes

I think this is also the start of people moving their money away from growth and into value names due to rate concerns. Last Feb when yields crept up and tech completely sold off, value names such as $GPS began to climb. We’re in a similar environment right now with nervousness regarding rates compared to last Feb/Mar so maybe the option buyer expects a similar outcome with $GPS.

Here’s the 10yr Treasury Index

Here’s $GPS in the same timeframe

Now 2/16/21 happened to be the day yields jumped seemingly out of nowhere marking the end of the covid rally for a lot of high flying growth names, notably Cathie’s ARKK fund.

All of this to say that I think $GPS and other value names should do well this quarter as more people look for somewhere to park their money away from growth.

5 Likes

Picked up a small size 02/04 20c at 0.22 around the $18 support. Let’s see what happens

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Got in at $0.21 nice cheap lotto play

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There was a huge dump from 24 to 16 end of November, any idea what happened there?

Missed ER

I cut this. Looks like a dud.

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Took a put for earnings (lotto) $13p 3/18 @ .71