MA Option Activity Rising With Retail Spending

MA Unusual Option Activity Report

Bank of America released the details of its card data that shows an uptick in spending following the stimulus, which is good news for payment processors like Mastercard Inc (NYSE: MA). This is why the Federal government loves giving stimulus…people spend it. As spending activity has been rising sharply in recent weeks, so has the option activity in MA. The bulls have been wading into MA for a couple of weeks, but Thursday’s activity was even more pronounced.

Bank of America Card Data

The data shows nearly 10% jump in spending year-over-year for the week ending February 6. In fact, the pace of 2021 spending has nearly doubled from December. There could be a number of factors that is causing this. Stimulus has to be a big one, but also the fact COVID cases are declining and the move toward reopening. Whatever the reason there appears to be some pent-up demand that is coming out, despite being in the middle of a recession.

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In the image above, you’ll see the recent surge in activity, but also the fact that brick and mortar and restaurants are still behind 2020. However, the slope of the spending curve shows those areas are taking up the slack quickly.

The state that saw the biggest up-tick last week was California, which saw card spending increase 9.5% last week compared to the same week in 2020. With the recall effort picking up steam, it certainly appears that it may be lessening restrictions and increasing spending.

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Looking at a breakdown of some of the data for individual states, a trend is established for online spending, assuming more than 50% of spending, furniture, and home improvement. Looking at the price performance of stocks like Mohawk Industries, Inc (NYSE: MHK), Casper Sleep Inc (NYSE: CSPR), Dixie Group Inc (Nasdaq: DXYN), and others certainly reflects this.

MA Option Activity

On Thursday, MA saw a couple of large bullish trades that were made that dovetailed with this Bank of America report. Here is a breakdown of the significant trades that were made yesterday:

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