Smart Money Getting Paid For This $4 Million Meme Play

Hey Traders,

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And speaking of big events …

Workhorse Group (Ticker: WKHS) saw some big action in the pits yesterday …

In fact, one trader actually got paid to play $4 million in puts …

In spite of the absolute rollercoaster of a year WKHS has had … 

 

Chart courtesy StockCharts

There seems to be at least one trader betting on some moderately calmer waters from here on out.

Workhorse Group (Ticker: WKHS) is a manufacturing company that specializes in electric-powered delivery and utility vehicles.

The stock has had a wild ride over the last 12 months, soaring to new highs on talk of a potential $6 billion deal with the United States Postal Service,, and then dropping sharply after losing out.

And if that wasn’t enough, the stock also appears to be attracting the attention of meme traders, seeing some heavy trading action earlier this month.

It even appeared on my Robinhood Trader Gamma Radar, which tracks order flow from both retail and institutional investors.

On Tuesday, the shares closed at $14.54, which is still well above the $5 range WKHS was trading at one year prior.

What caught my eye, however, wasn’t anything on WKHS’s chart. Rather, it was a few very sizeable trades crossing the tape in the pits …

It seems someone out there has some strong feelings about WKHS … or at least one institutional investor is making a very large (and, they’re hoping, very smart) play …

This trader made quite an interesting trade …

To start, they bought 9,637 contracts of the January 2022 13-strike puts for $4.45 – that’s a $4,288,465 initial outlay! 

Definitely not chump change …

But it didn’t come out of their pocket …

Because they also sold 9,637 contracts of the January 2022 13-strike puts for $0.80, covering $770,960 of their cost …

And they weren’t done yet …

Because they simultaneously sold 9,637 contracts of the January 2022 16-strike calls for $4.10 – bringing in another $3,951,170!

That’s right, this trader actually got paid $433,665 to make this trade. Nearly a half million pocketed … and if all three trades work out as planned? Well, there’s quite a bit more to be made, that’s for sure …

So as long as WKHS stays within the $6 to $16 range, this trader walks away with nearly a half-mil in profits.

And if WKHS happens to close below $13 (but above $6!) they’ll see even more profit from the transaction.

However, like I mentioned, WKHS is currently trading well above where it was just one year ago …

Even more foreboding is its new meme stock status, which could make this trade quite a bit more risky than it initially seems.

But given the size of this trade, I’m willing to bet this trader knows what they’re doing …

I wouldn’t necessarily count on them holding onto these positions through expiration … All they’d need is the right price or vol pop … and they have half of a year to wait it out …

Getting paid to trade! Not a bad gig, right?

Don’t forget, you can get ‘paid’ in the form of a brand-new special report, THREE volatility trades, and an attendee-exclusive offer tomorrow at 1:00 p.m. EST …

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See you tomorrow!

Your Only Option,

Mark Sebastian

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