Today we discuss some of the best penny stocks to watch with unusual activity in the options market. Traders like you are often looking for ways to find companies to invest or trade in. The use of stock market data can be a major asset. Earlier this week we discussed things like penny stocks with insider buying. We also discussed stocks with bullish analyst ratings and, as in today’s article, we discussed penny stocks with unusual options activity.
There’s no shortage of speculation right now ahead of the August meeting in Jackson Hole. The whole market is patiently waiting to see what the Federal Reserve says next and how it plans to fight inflation. The key thing to remember is that the timing of the different catalysts is key to understand. Small and micro cap stocks are incredibly volatile. Prices can change at any time, and just as catalysts can drive stock prices higher, they can also pull the rug out from under you.
Why is options volume important in Penny Stocks?
Like many data points, option flow is examined for sentiment-based trades. As a caveat, high call volume or high sell volume does not necessarily mean the bet is bullish or bearish. We expand on this in the article Trading Options 101: A Beginner’s Guide, we explain some of the functions of options and how volume is factored into the mix. Generally speaking, traders will use call volume, sell volume, and open interest to determine where sentiment lies. The following companies experienced this phenomenon in the stock market today and may merit a closer look.
4 Penny Stocks to Watch
- FuboTV Inc. (NYSE: FUBO)
- Canoo Inc. (NASDAQ: GOEV)
- Uranium Energy Corp. (NYSEAMERICAN: UEC)
- Workhorse Group Inc. (NASDAQ: WKHS)
FuboTV Inc. (NYSE: FUBO)
Streaming service companies have been mixed this year. The breakdown of stocks like Netflix and Roku highlighted some of the risks associated with companies like these. This also echoed in the market for small cap stocks like FuboTV at the start of this quarter.
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Switch to this month, and things are very different for the entertainment and sports betting company. Since the beginning of August, FUBO stock has steadily climbed, which was also helped by a strong performance on its recent Investor Day. This week, the penny stock hit highs of over $8 before stabilizing in the mid-$4 range. Fubo signed a notable deal earlier this month with Maximum Effort Productions, founded by Ryan Reynolds. The deal includes an exclusive first look at the unscripted television series, Maximum Effort, which will premiere on the network.
Reynolds commented on the new deal in an August update. “FuboTV has taken a new approach to developing and delivering content in the digital age, and the entire team is passionate about thinking differently and taking risks. I really can’t believe Maximum Effort is coming to programming our own network. I am beyond excited and grateful to Fubo.
FUBO Stock Options Activity
Against this backdrop and some uptrend in the overall stock market today, FUBO stock has sparked interest among options traders. Specifically, this week’s (August 26) $4.50 and $5 strike calls. It will be interesting to see if these seemingly bullish bets in the FUBO stock option chain materialize at expiration.
Canoo Inc. (NASDAQ: GOEV)
Penny EV stocks have been heating up recently. Canoo Inc. is no stranger to this trend. Earlier this quarter, Canoo attracted a lot of attention with a contract to supply its electric vehicle to the US military for testing and demonstration purposes. NASA has also selected the company’s platform as a crew transport vehicle to deliver astronauts to the Artemis launch site for lunar missions.
Canoo recently made deliveries to finalize its vehicle customization with Walmart. The two worked together to configure Lifestyle delivery vehicles for the grocery chain and are being deployed for deliveries in a pilot program in Dallas.
This week, Tony Aquila, CEO of Canoo, said, “LDV has been designed to enable a wide range of package deliveries, including refrigerated items, groceries and general merchandise – and to do so efficiently, without emissions and with a high level of comfort and ergonomics for the driver.. And we turned a lot of heads in the neighborhoods by passing in our uniquely identifiable vehicles.
Not only did unusual options action help draw attention to GOEV stock, but insider trading was also a factor in August. The CEO of the company landed 200,000 shares of the EV company at an average price of $3.98.
GOEV Stock Options Activity
In the article 5 Best Penny Stocks to Buy on Reddit According to Options Traders, GOEV stock was highlighted thanks to action in the September 2 $5 call contracts. Moving forward to today, there is a significant amount of open interest in the September 16 $5 contracts. There is also above-average volume in this Friday’s (August 26) $4 strike calls.
Uranium Energy Corp. (NYSEAMERICAN: UEC)
Uranium energy stocks are recharging this week on energy market trends. Reports that Japan plans to revert to nuclear power have sparked a bullish move across the sector. Uranium Energy Corp. is now one of the popular penny stocks that have caught the attention of investors.
In addition to the general bullish sentiment in the market for uranium stocks, the UEC has sparked interest thanks to the news earlier this week. The company has completed the acquisition of UEX Corporation to place its energy project portfolio under the UEC umbrella. CEO Amir Adnani even went so far as to say, “There is an emerging trend in Western utilities to secure supply for uranium projects in politically stable and proven jurisdictions, this is a perfect fit for authorized US ISR projects and ready for UEC production and with extensive growth pipeline in Canada.
Against this backdrop, traders pushed aside recent uncertainty around the future of uranium energy thanks to news from Japan.
UEC stock option activity
That same sentiment echoed in the options chains today. For the UEC, the September 16 $4.50 strike calls have had the most action so far. This is compared to open interest entering Wednesday’s session.
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Workhorse Group Inc. (NASDAQ: WKHS)
Another of the EV penny stocks to watch this week is Workhorse Group. With renewed focus on the US Postal Service planning to “significantly” increase its purchases of electric vehicle delivery, companies such as Workhorse and Oshkosh were on investors’ radar. The USPS proposed a plan to buy at least 50% of an initial order of 50,000 vehicles.
The company was a former contender for the big USPS, which was ultimately won by Oshkosh Corp (NYSE:OSK) in 2021. While that speculation has yet to materialize, mixed earnings have put some pressure on the penny stock . It also highlighted the growing interest in WKHS stocks this month. From this article, the short float percentage for Workhorse is around 26% to 27%, according to data compiled from Fintel.IO and TDAmeritrade. Thanks to the focus on short-term stocks, many with short floats above 20% are attracting the attention of retail traders in the stock market this week.
WKHS Stock Options Activity
If the short data wasn’t enough, unusual options activity on the September 16 calls to $4.50 also raised the bar. At the time of this article, more than 1,200 contracts were negotiated.
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