Options Traders Are Fired Up About Fintech as Big Banks Look for Takeout Targets

Adam Jeffery | CNBC

JPMorgan's acquisition of OpenInvest, a San Francisco-based ESG start-up, marks its third fintech deal in the past year. The recent uptick in buying has options traders speculating about who could be the next takeout target in the fintech space.

One name seeing a major increase in activity is SoFi Technologies, another San Francisco-based company specializing in mobile-first loan refinancing, mortgages and other financial products.

"This is a name that does typically trade quite a lot of options, but it traded a lot more today, more than three times its average daily options volume. Nearly 340,000 calls traded, and calls significantly outpaced puts," Optimize Advisors CIO Michael Khouw said Tuesday on CNBC's "Fast Money."

Many of those calls, across several different strikes and expirations, were bought to open. That signals that the bullish activity isn't limited to a particular time frame, and traders aren't united in their thesis of how high SoFi can go. However, bets seemed weighted toward the short term.

"The most-active options were this week's 20-strike calls. Over 38,000 of those traded for about 92 cents, so traders are obviously betting that the stock can recover from [Tuesday's] decline and some of the weakness that we've seen over the past couple days," said Khouw.

Those calls expire this Friday at a break-even price of $20.94, or about 11% higher than where the stock closed Tuesday's session.

SoFi was 4% higher in Wednesday's session.


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