Coinbase Shares Slide Following SEC Lawsuit: Options Market Predicts Further Decline

Coinbase Global, Inc. COIN shares dropped on Tuesday after the SEC sued the company in N.Y. federal court.

On CNBC’s "Options Action,"  Mike Khouw of Optimize Advisors said Coinbase was the busiest financial stock option and was the sixth-busiest single stock option on Tuesday, with puts significantly outpacing calls volume.

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There were buyers of June 9 weekly 50/40-put 1x2 ratio spreads at an average price of $2.40 per contract, Khouw mentioned.

The trader expects Coinbase’s stock to fall as much as 22% by Friday.

The SEC's complaint accuses Coinbase of illegally enabling the purchase and sale of crypto asset securities since 2019. The agency alleges that the company has been intertwining the roles of an exchange, broker, and clearing agency without proper SEC registration, leading to transactions amounting to billions of dollars.

Price Action: Coinbase’s shares dropped 12.1% to close at $51.61 on Tuesday, but bounced 3% in today’s premarket trading session.

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