Coinbase Global, Inc. (COIN) stock has hit a bump in the road as Bitcoin is on a downturn. That has led to very unusual call options activity in COIN stock, according to a Barchart report. Is this a buying opportunity?
COIN is at $303.12 in midday trading on Wednesday, Aug. 20, down slightly, but off over 27% from its recent peak of $419.78 on July 18. That was before its recent Q2 earnings release on July 31.
I discussed the company’s earnings in a Barchart article on Aug. 1 (“Coinbase Shows Huge Unusual Options Volume After Lower Results“). In short, the results were lousy and investors have not been inspired. You can read my article to see why.
Nevertheless, hope springs eternal. That may have led investors to buy large amounts of call options, as seen in today’s Barchart Unusual Stock Options Activity Report.
It shows that almost 4,500 call option contracts have traded for the Aug. 29, 2025, expiry period (9 days to expiry) at the $312.50 call option strike price.
That exercise price is higher than today’s price, so it is considered “out-of-the-money.” In other words, COIN stock will have to rise to $318.00, or almost 5% for the investor to hit breakeven:
$312.50 + $5.50 premium = $318.00 breakeven point
$318.00 / $303.12 = 1.049 = +4.9% out-of-the-money
However, given that all options have extrinsic value up until right before their expiration, it’s possible that if COIN rises from here, the investor could make money. But that is a gamble or a speculative play.
On the other hand, the investor who sells short these calls is making a good yield. For example, the $5.25 premium received represents over 1.73% of the investment at today’s price:
$5.25 / $303.12 = 0.017319 = 1.73% yield
That is a very good return over the next 9 days. Moreover, even if the stock rises to $312.50, the investor would be able to make an additional 3.09% over the next 9 days. So, the total potential realized gain would be 4.82%.
As a result, investors may want to copy these short-sellers as this covered call yield play is very attractive here. For example, buying COIN stock here and selling short OTM calls provides some downside protection due to the income received:
