The Blubber

October 5, 2021

10:40ET: Today, Bitcoin reached back above the $50,000 price mark, and so far this morning, it’s been holding that line relatively well. In the midst of this uptick, crypto-currency mining companies are seeing a bit of a recovery today, with Marathon Digital Holdings (NASDAQ:MARA), Riot Blockchain Inc. (NASDAQ:RIOT), and Bit Digital Inc. (NASDAQ:BTBT) wiping away most of yesterday’s losses.

Options activity for all three of these companies, as you can imagine, reflects the upward movement to a “T”, with bullish flow dominating this morning’s trading session; however, the big winner of the three, and the focus of this post, is Bit Digital Inc.

Bit Digital Inc. (NASDAQ:BTBT), though smaller than the crowd favorites in MARA and RIOT, has significant bullish flow this morning, as seen above. Dominated by monthly call orders (bought at the ask side, indicating a sense of urgency on behalf of the buyer to enter the position) expiring on November 19, 2021; mostly the $12.5 and $15 strikes. This shows a bullish expectation for at least the short-term. Indeed, of all premium spent on options for BTBT, 84.67% is bullish in the morning session.

The two largest orders, however, are found in puts sold at the bid side. Much as calls purchased on the ask side can reflect urgency to enter into those calls (indicating a bullish expectation), puts sold at the bid side can indicate the same sentiment. As the stock price rises, the price of the put drops; but since the investor/trader sold those puts for a premium, they get to pocket the difference.

These put sells all triggered as parts of a multi-leg order. They all came in nearly simultaneously, as well, which supports that sentiment (and is an indicator of the possibility that all of these orders were made by a single player).

Marathon’s options flow also displays the bullish sentiment we see in BTBT, to a lesser degree. In the image below, we observe a similar spread of sold puts and purchased calls. However, in MARA’s case, we see evidence of hedging for the future, with some sold calls on the $36 strike for January, 2022. This could indicate expectations of a pullback in the future. Of all options premium for MARA, 60.92% is bullish.

RIOT option flow is not dissimilar, however we see a few orders that are especially unusual.

The first order at the top is for a LEAP (a contract dated more than 1 year in the future) on the $75 strike expiring in January, 2023. This is extremely out of the money. Additionally, there is a far in the money order of the same expiration, on the $3 call strike. Not pictured here is another out of the money order on the $80 strike for January 2023. All these trades, according to the flow tool, are potentially part of the same multi-leg options order.

At the time of writing, BTBT is trading at $9.30 per share; up $1.71 this morning for an astounding 22.46% increase, decimating yesterday’s losses and taking them over by an additional 5%. MARA by comparison is only up 6.25% to $35.73, and RIOT is up 4.36% to $26.35.