Happy Friday to Barchart readers, everywhere. 

I don’t know what the weather is like where you live, but here in Halifax, on Canada’s east coast, we are headed into what is expected to be the 13th consecutive bad-weather weekend. It’s rained every weekend since March.

The rain we are receiving is much-needed in Manitoba and Saskatchewan, where wildfires have forced over 33,000 people to evacuate their homes. I sure hope some of our rain heads west sooner rather than later. They need it in a big way. 

On tap this morning was the Department of Labor’s jobs report for May. It was decent with 139,000 jobs added last month, down from 147,000 in April, but 9,000 higher than the economists’ forecast. The unemployment rate remained at 4.2%. 

As a result of the resilient jobs report, the S&P Futures are moving higher with about half an hour to the open. Let’s see if we can finish the week on a high note. 

In Thursday’s trading, there were 1,399 unusually active options, split almost evenly between puts (705) and calls (694). Of the top 100 by Vol/OI (volume-to-open-interest) ratios, these three had the highest.

Have an excellent weekend.

Visa (V)

Visa’s (V) Jan. 15/2027 $400 call was numero uno with a Vol/OI ratio of 81.86. The profit probability is so-so at 27.64%. The expected move is 20.17% in either direction. 

With nearly 20 months until expiration, there’s a lot of water to go under the bridge. While analysts love the stock--of the 38 covering V stock, 33 rate it a Buy (4.63 out of 5), with a 383.81 mean target price--there is a lot that can go wrong in the global economy in the next 12-18 months resulting from tariffs and uncertain trading relationships, forcing the U.S. and other developed markets into a recession.

Visa generates revenue by charging interchange fees to financial institutions that utilize its global network for processing, clearing, and settling transactions. If the economy goes into a downturn, consumers and businesses spend less, resulting in fewer financial transactions that require processing.  

However, Mizuho Securities analyst Dan Dolev recently upgraded V stock to Outperform (Buy) from Neutral (Hold), while raising his target price by $57 to $425, within shouting distance of the call’s $437.45 breakeven. 

“We see more reason for optimism as the remaining cash-to-card runway in the US is longer than previously expected,” Barron’s reported Dolev’s comments on June 5. “This leaves room for another decade of solid top-line growth domestically.”

As the analyst suggested, Visa and Mastercard (MA) have “arguably the highest quality duopoly in the world,” so over the long haul, their share price should continue to move higher. 

Over the past 20 months (Oct. 6, 2023, through June 5, 2025), Visa’s shares have appreciated by 56%. To break even on the Jan. 15/2025 $400 call, it needs only to appreciate by 18.64%.

That is very doable. 

With a net debit of $3,705, just 9.2% of the $400 strike, the risk/reward proposition is more than reasonable. If  

Novo Nordisk (NVO)

The Danish maker of Ozempic and Wegovy had the second-highest Vol/OI ratio yesterday of 71.77. The volume of 12,129 accounted for nearly 23% of the overall total. The 53,351 was the stock’s highest daily volume since May 19. Of the 12,129 contracts traded for the June 13 $66 put, one order accounted for 85% of the volume. Some big hitter had a hunch. 

Novo Nordisk’s (NVO) stock appears to have bottomed in mid-April at $57. It’s up 27% in the seven weeks since. Barchart’s Technical Opinion rates it a 40% Sell with the 20-day moving average signaling Buy. 

In mid-May, the company’s board ousted CEO Lars Fruergaard Jorgensen after eight years running the drugmaker. Jorgensen had spent his entire career with Novo Nordisk. 

There is no question that, at least in the past 6-12 months, the bloom has come off the rose for NVO stock. 

With poor results for CagriSema, its next-generation weight-loss drug set for release in 2026, increased competition in the weight loss space from Eli Lilly (LLY), and lower growth forecasts, it will be some time before investors pile back on to the Novo Nordisk train. 

However, with just a 7.54% profit probability from the long put bet, the big hitter was likely counting on a virtually guaranteed, 10.5% annualized return by selling the puts instead. 

Worst case scenario: They’re able to buy NVS stock at a slightly lower entry point should it fall below $66, and the buyer exercises their right to sell. 

I like that trade a lot. 

Roblox (RBLX)

This last one should be filed under “a wing and a prayer” or “Hail Mary,” with a profit probability of just 3.13%. Roblox (RBLX) stock would have to drop by nearly 20% in the next week to have any chance of profiting from the $76 put strike. 

I can’t remember the last time I wrote about Roblox, whose online platform allows users to create, share, and play virtual experiences and games. 

RBLX stock is alive and well, trading up 66% in 2025 and 169% over the past 12 months. Over the past five years, on three occasions (June 2022, December 2022, and September 2023), its shares traded at around $27. They’re now not too far off from the November 2021 all-time high of $141.60.

Roblox has hit 63 new 52-week highs in the past 12 months. Of the 24 analysts covering its stock, 16 rate it a Buy (4.13 out of 5), with a mean target price of $76.88, well below its current share price. 

I’m often confused by analysts assigning a Buy rating to a stock but with a target price below its current share price. I realize this means that the bullish analysts feel its share price has gotten ahead of itself.  So, why not rate it Hold? That’s a discussion for another day. 

As the company stated in May, it anticipates generating as much as $930 million in free cash flow in 2025, based on $4.37 billion in revenue, resulting in a 21.3% margin, the highest levels for both in its history. 

Yes, it still is losing a bundle--Roblox guidance calls for a net loss in 2025 between $977 million and $1.04 billion--but positive free cash flow is the name of the game and it could go over $1 billion as early as this year with a bit of luck, but definitely in 2026. 

Even if it loses $1 billion annually for the next three years, Roblox has sufficient liquidity to maintain operations—net cash of $3.5 billion as of March 31—so it remains an attractive stock for speculative investors. 

If you sold the $76 put for $0.02 in premium income, your annualized return on the bet would be 1.4% [0.02 / $76 * 365 / 8].

Long or short, I’m not sure why someone made a trade for 7,000 $76 put contracts yesterday. There doesn’t seem to be a profitable outcome either way. 

Of course, at $15 a contract, it’s not a significant outlay. No harm, no foul, I guess.

On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.