Iren, a data-center owner with an $18 billion market cap, is making waves in the options market, trading like a heavyweight among AI giants. On Thursday, it recorded two of the top 20 largest options trades, with $173 million in premiums changing hands—73% of which were call options. In stark contrast, major players like Equinix and Digital Realty Trust saw less than $1 million in total options trading, despite their combined market cap being nearly ten times that of Iren.
This surge in Iren’s options activity is notable as it reflects heightened investor interest, particularly ahead of its earnings report tonight. A significant long strangle trade worth $36 million suggests traders are anticipating volatility, betting on a stock move beyond the $45 to $79 range. Historically, Iren has been a favorite among retail investors, soaring 770% in the past year as it pivoted towards AI clients.
Traders should be cautious, as implied volatility indicates a potential 14% swing in stock price, yet actual earnings moves have averaged only 6%. This discrepancy highlights the risk of overpaying for options during earnings announcements.
Source: cnbc.com