The broader market has been in good shape lately, and it’s not subtle. Semiconductors have led to a sharper downward spiral.
Micron technology NASDAQ: MU spent a third of its value in two weeks, even Space Exploration Technologies Corp. NASDAQ: SPCX The IPO story that made everyone dream about space-based data centers has cooled as the shares are priced above the offering range. Sentiment is highly volatile against all previous earnings and forecasts, and the selloff is broad enough that even strong long-term narratives are stuck in the downside.
That is exactly the environment in which institutional options traders begin to make their moves.
Andrew Keene, founder of AlphaShark.com and a 25-year veteran of the Chicago Board Options Exchange trading floor, tracks the bets of major institutions in the options market. His method is to look for the biggest call purchases in certain stocks and expirations, and then follow the money.
Keene says he rarely even looks at what a company is doing before going into business. What matters is size, timing, and certainty, as well as technical indicators such as relative strength and average trading range.
Three names caught his attention this week, all of them down significantly from the highs, and all of them showing unusually large phone purchases. Keene’s positions end in October, December, and January, giving each trading month more days to play.
Investors who would rather skip the options market entirely can still use the same signals, whether that means buying stocks outright, setting stop losses near recent lows, or simply watching for changes in sentiment before entering.
Nuclear Newcomer Pulls October Bets
IX-Energy Today
IX-Powers
From 02:28 PM East
- 52 week interval
- $13.29
▼
$37.10
- Target Value
- $37.86
IX-Powers NASDAQ: XE bought its IPO in April and jumped to $37 in its first days of trading. The stock plummeted, cutting its value by nearly two-thirds. A nuclear fuel and small modular reactor company, backed by Amazon.com NASDAQ: AMZNremains in revenue, but an institutional trader recently bought calls for the October 35 strike, a bet made weeks before the stock hit a 52-week low near $13.20.
Keene added to the position himself as the option price dropped to $25 per contract, well below the $170 the center initially paid. The relative stock strength index fell below 30, the level at which traders view oversold conditions, and its daily movement around $1.70 offers an opportunity for options to react quickly. What can change the picture: any sign showing that the support of the nuclear policy or the data center needs firms again after a long period of taking the sector.
Oklo Attracts the Biggest Bet on the List
It’s OK Today
- 52 week interval
- $39.53
▼
$193.84
- Target Value
- $84.00
Company Oklo Inc. NYSE: OK it fell from a high near $194 to a low of $40, along with a broader pullback across AI data center names.
The largest institutional position that Keene tracks resides here: approximately 50,000 December 90 strike calls, bets worth tens of millions of dollars in perceived exposure. Keene replaced him after the stock fell nearly 8% in one session, matching its average for the day almost exactly.
Plan to exit before Oklo’s next earnings report and typically close positions within 60 days of expiration, as time decay accelerates rapidly in that window.
To watch: how the stock behaves on its next earnings day, an event Keene considers too unlikely to continue.
IonQ Leads Bet on Quantum Rebound
IonQ today
- 52 week interval
- $25.89
▼
$84.64
- Target Value
- $69.88
IonQ, Inc. NYSE: IONQ retreated from the highs of $86 to the mid-$30s, part of a broader reset for all quantum computer stocks after last year’s rally.
The trader recently bought November 60 strike calls for a $1.5 million bet, and Keene has added to his own position, as well as January reissue calls. The IonQ relative strength index sits at 26, deep in oversold territory, with a typical daily swing near $4.
Rigetti Computing NASDAQ: RGTI and D-Wave Quantum NYSE: QBTS revolve around a small group of quantum names Keene is watching more closely, though he notes that IonQ tends to move more on a dollar basis. Keene has traded the term profitably before and says he still believes in the long-term story of quantum computing, separate from this short-term trade.
Balancing Risk and Reward
None of the three companies are profitable yet, and all three could continue to decline if sentiment around pre-profit growth news remains sour or interest rates rise. Keene is honest that not all work is effective, and institutional buying does not guarantee a stock’s direction. Prices in this area of the market have already fallen sharply once this year, and further declines are possible.
The upside case depends on how this bet is structured rather than a full recovery. Keene doesn’t look for these stocks to reclaim their former highs. An average bounce over several periods, along with the average daily range of each stock, may be enough to move the options meaningfully, given the length of the expiration period.
Always focus on the setup, not the headlines, because that’s what usually moves the options price more than any single day news.
Before you consider Oklo, you’ll want to hear this.
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