Bulls, Bears Battle In SoFi And Options Traders Bet On Bulls

SoFi Technologies Inc SOFI is trending in Reddit communities again Wednesday. The online personal finance company went public through Chamath Palihapitiya’s special purpose acquisition company Social Capital Hedosophia Holdings V.

SoFi has all the typical characteristics of a Reddit favorite due its underlying statistics:

• Small Float: SoFi has a total float of 56.45 million shares. Due to its popularity over 18 million shares, or 30% of its total float, had already exchanged hands as of Wednesday afternoon.
• High Ownership Levels: 26.35% of SoFi’s float is held by insiders and institutions with insiders owning 23.77% and institutions holding 2.58% of the available shares.
• High Short Interest: A whopping 28.28 million, or 50%, of SoFi’s total float is held short.

SoFi’s stock is trading about 3% higher but was pinned between $19 and $19.50 indicating the bulls and bears were in battle. A number of options traders think the bulls are about to win the fight, however, and bet $498,461 SoFi’s stock is headed higher.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The SoFi Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:39 a.m., Wednesday a trader executed a call sweep near the bid of 400 SoFi Technology options with a strike price of $17.50 expiring on July 16. The trade represented a $98,000 bullish bet for which the trader paid $2.45 per option contract.
• At 9:49 a.m., a trader executed a call sweep near the bid of 258 SoFi Technology options with a strike price of $20 expiring on July 16. The trade represented a $41,796 bullish bet for which the trader paid $1.62 per option contract.
• At 10:02 a.m., a trader executed a call sweep near the bid of 200 SoFi Technology options with a strike price of $22.50 expiring on Oct. 15. The trade represented a $68,000 bullish bet for which the trader paid $3.40 per option contract.
• At 10:23 a.m., a trader executed a call sweep near the bid of 234 SoFi Technology options with a strike price of $17.50 expiring on July 2. The trade represented a $41,796 bullish bet for which the trader paid $1.70 per option contract.
• At 10:42 a.m., a trader executed a call sweep near the bid of 478 SoFi Technology options with a strike price of $20 expiring on July 16. The trade represented a $83,172 bullish bet for which the trader paid $1.74 per option contract.
• At 10:49 a.m., a trader executed a call sweep near the bid of 301 SoFi Technology options with a strike price of $20 expiring on July 16. The trade represented a $41,796 bullish bet for which the trader paid $1.57 per option contract.
• At 11:30 a.m., a trader executed a call sweep near the bid of 221 SoFi Technology options with a strike price of $20 expiring on Aug. 20. The trade represented a $41,796 bullish bet for which the trader paid $3.15 per option contract.
• At 11:48 a.m., a trader executed a call sweep near the bid of 807 SoFi Technology options with a strike price of $20 expiring on July 2. The trade represented a $41,796 bullish bet for which the trader paid 63 cents per option contract.

SOFI Price Action: Shares of SoFi Technologies traded up 2.9% to %19.42 at publication time.