Options Traders Cause Massive Spike In WW International's Stock

WW International, Inc WW shares spiked over 6% higher between 1:20 p.m. and 1:30 p.m. on Tuesday. The unusual spike was brought on by an institution that placed a $1.3 million bullish bet that WW International’s stock would head higher. Three more options trades were then placed as a follow up. The traders purchased an additional $201,724 worth of call contracts.

The spike was short-lived, however, and WW  fell 4.8% over the hour that followed before bouncing on smaller time frames.

This type of action is unusual for WW's stock as it doesn’t often have many large call or put sweeps. The last time any large WW call contracts were purchased before Tuesday was June 18 and before that no large option trades had been placed since June 4.

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.

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

• At 1:20 p.m., a trader executed a call sweep near the bid of 6172 WW International options with a strike price of $37.50 expiring on Aug. 20. The trade represented a $1.30 million bullish bet for which the trader paid $2.11 per option contract.
• At 1:20 p.m., a trader executed a call sweep near the ask of 241 WW International options with a strike price of $37.50 expiring on Aug. 20. The trade represented a $55,430 bullish bet for which the trader paid $2.30 per option contract.
• At 1:20 p.m., a trader executed a call sweep near the bid of 250 WW International options with a strike price of $37.50 expiring on Aug. 20. The trade represented a $58,250 bullish bet for which the trader paid $2.33 per option contract.
• At 1:20 p.m., a trader executed a call sweep near the ask of 276 WW International options with a strike price of $37.50 expiring on Aug. 20. The trade represented a $88,044 bullish bet for which the trader paid $3.19 per option contract.

WW Price Action: Shares of WW traded up 1.9% to $35.41 at publication time.