Unusual option trades 3-10-2025: FIVE, ALK, CAH, RCL, HIMS, FERG

As the stock market continues to experience significant volatility with the S&P 500 now 6.09% below its February peak and down 1.68% year to date, institutional investors are making notable options bets that provide insight into potential market directions[18]. On March 10, 2025, several unusual options trades caught the attention of market observers, representing substantial financial commitments across various sectors. These large position trades, some exceeding millions in premium, suggest sophisticated investors are taking calculated positions based on their outlook for specific companies over the next 1-2 months. The following analysis examines these significant options transactions and provides context about the underlying companies to help understand what might be driving these high-conviction trades.

Royal Caribbean's Bearish Options Tsunami

The most striking activity observed on March 10 centered around Royal Caribbean Cruises (RCL), where multiple substantial put option positions were established, collectively representing over $15 million in premium. These bearish positions primarily focused on the April 25, 2025 expiration date with various strike prices, suggesting strong conviction about potential downside in the stock over the next 46 days[4]. The largest single position involved 3,508 contracts of the $205 put options purchased at $15.25 each, totaling approximately $5.35 million in premium, with traders paying at the bid price – indicating urgency to establish the position.

Royal Caribbean's stock has experienced a remarkable trajectory in recent years, but current forecast models suggest significant bearishness ahead. Trading near $205 on March 10, price prediction models indicate RCL could experience a substantial decline, potentially reaching $172 by the end of March – representing a 30.1% monthly decline[4]. This bearish forecast continues into April and May, with projections showing the stock potentially hitting $146 by April's end and further declining to $132 by late May. The magnitude of put option activity aligns with these bearish forecasts, suggesting institutional investors may be positioning for a substantial correction in Royal Caribbean's stock price through the spring of 2025.

The timing of these bearish bets is particularly noteworthy as cruise line stocks have generally benefited from strong travel demand post-pandemic. However, the current market volatility amid fears of tariffs and potential economic slowdown appears to be prompting caution in the travel sector. Royal Caribbean's high delta values on these put options (-0.452 to -0.479) suggests these positions are particularly sensitive to price movements in the underlying stock, making them effective hedges if traders anticipate a significant correction in the near term[4]. The clustering of multiple large put transactions at similar strike prices reinforces the impression that this represents a deliberate, high-conviction bearish stance rather than random market activity.

Hims & Hers Health: Significant Put Positioning Despite Growth Story

Another notable development on March 10 involved Hims & Hers Health (HIMS), where substantial put option positions were established despite the company's strong growth trajectory. Three large put option transactions on the April 17, 2025 expiration with a $33 strike price were observed, totaling over 10,000 contracts and approximately $3.85 million in premium[5]. With the stock trading near $34.50, these slightly out-of-the-money puts with extremely high implied volatility (105-107%) suggest traders are positioning for potential volatility or downside despite the company's positive fundamental story.

Hims & Hers has been highlighted as one of the stocks positioned to potentially "skyrocket" in 2025, with management expecting 56-63% growth for the full year[1]. The company has benefited from the rapid expansion of telehealth services and successful product offerings, including its weight loss treatments and sexual health products. In the third quarter, sales surged 77% year-over-year to $400 million, with adjusted EBITDA exceeding $50 million, demonstrating both growth and improving profitability[5]. The relatively modest price-to-sales multiple under 4 for a company growing over 50% annually has attracted positive analyst coverage, with firms like Needham & Company setting a $31 price target.

The substantial put activity appears contradictory to this positive fundamental outlook, suggesting either a large hedge against existing long positions or a contrarian bet that the stock's recent 22.86% year-to-date appreciation may be overextended[5]. The extremely high implied volatility suggests options traders are pricing in significant potential price swings, perhaps tied to upcoming catalysts or broader market concerns. These puts have a delta of approximately -0.377, indicating they will capture about 38% of any downward movement in the underlying stock, providing meaningful but not excessive leverage to bearish price action.

Ferguson: Earnings-Related Options Positioning

An intriguing options trade classified as an "interesting earnings bet" involved Ferguson PLC (FERG), where 2,000 put option contracts with a $165 strike price and March 21, 2025 expiration were purchased for approximately $1.22 million in premium. With the stock trading almost exactly at the strike price ($165.055) and earnings scheduled for the very next day on March 11, this represents a clear catalyst-driven options position[6]. The relatively high implied volatility of 57.19% reflects the uncertainty surrounding the upcoming earnings announcement, while the tight expiration window of just 11 days makes this a particularly time-sensitive trade.

Ferguson's previous earnings report on December 10, 2024, resulted in an earnings miss, with the company posting EPS of $2.45 compared to analysts' expectations of $2.61[6]. This history of earnings disappointment may be influencing the substantial put position ahead of the March report. For the upcoming earnings announcement, analysts are projecting an EPS of $1.60, representing a significant sequential decline from the previous quarter. The timing and size of this put position suggest the trader has strong conviction about potential disappointment or cautious guidance in the imminent earnings report.

The position's delta of -0.476 indicates these at-the-money puts will capture nearly half of any downward movement in the stock following the earnings announcement. This tactical options positioning exemplifies how sophisticated investors use options to express views on specific catalysts rather than simply directional market bets. Given the tight timeframe between the trade and the earnings announcement, this position appears to be a deliberate, high-conviction stance on Ferguson's upcoming financial results rather than a longer-term view on the company's prospects.

Five Below: Bullish Contrarian Positioning

In contrast to the bearish positioning observed in several stocks, Five Below (FIVE) saw notable bullish options activity on March 10, with 2,000 call option contracts on the April 17, 2025 expiration with an $85 strike price purchased for approximately $1.32 million in premium. With the stock trading at $81.54, these slightly out-of-the-money calls with 75.32% implied volatility represent a contrarian bullish bet on a stock that has experienced significant challenges recently[14]. The high premium commitment suggests strong conviction about potential upside over the next 38 days.

Five Below has experienced a difficult period, with the stock dropping approximately 50% in 2024, reflecting challenges in the retail sector and company-specific issues[9]. In January 2025, the company announced holiday sales results showing an 8.7% increase in net sales to $1.19 billion, but with comparable sales decreasing by 3.2%, highlighting the mixed performance[12]. Despite these challenges, analyst sentiment remains cautiously optimistic, with an average price target of $129.32, representing a substantial 66.12% upside from current levels, suggesting the potential for significant recovery if the company can address its operational challenges[16].

The timing of this bullish options position may indicate a belief that Five Below's stock has been oversold and is poised for recovery. With earnings expectations for fiscal 2025 suggesting EPS of $4.94 and revenue of $3.86 billion, the company maintains a forward P/E ratio of approximately 16.6, which is relatively modest for a specialty retailer with growth potential[14]. The call options position has a delta of 0.488, indicating these contracts will capture roughly half of any upward movement in the stock price, providing meaningful leverage to positive price action.

Alaska Air Group: Betting on Continued Momentum

Alaska Air Group (ALK) saw substantial call option activity on March 10, with 4,369 contracts on the April 17, 2025 expiration with a $62.5 strike price purchased for approximately $1.05 million in premium. With ALK trading at $56.55, these calls represent a bullish bet on approximately 10.5% upside within the next 38 days[2]. The position's 60.19% implied volatility and 0.340 delta indicate moderate speculative positioning with significant upside leverage if the stock continues its strong performance.

Alaska Air Group shares have performed exceptionally well, surging 65.8% in 2024 and outperforming the industry average of 30.3% growth[2]. The company has benefited from robust air travel demand, with consolidated traffic rising 8% to 16.97 billion revenue passenger miles in the third quarter of 2024. The carrier's strategic plan, 'Alaska Accelerate,' aims to generate $1 billion in incremental profit following its merger with Hawaiian Airlines, focusing on expanding connectivity through a Seattle gateway, becoming Hawaii's trusted airline, and enhancing the travel experience with premium offerings[2].

Current forecasts suggest ALK could reach $69.66 by April 2025, representing a 14.88% increase from its current price levels[10]. This aligns well with the options positioning, as the $62.5 strike would be well in-the-money if such targets are reached. The substantial size of this options trade suggests institutional conviction in Alaska Air's continued momentum and ability to capitalize on strong travel demand. As the airline industry continues to benefit from robust passenger numbers and strategic consolidation, this options position represents a targeted bet on Alaska Air's ability to outperform the broader market in the coming weeks.

Cardinal Health: Modest Bullish Positioning Amid Healthcare Strength

Cardinal Health (CAH) experienced noteworthy call option activity on March 10, with 1,375 contracts on the April 17, 2025 expiration with a $125 strike price purchased for approximately $547,200 in premium. With the stock trading at $123.77, these near-the-money calls with relatively low implied volatility of 27.59% represent a more conservative bullish position compared to the other unusual options activities observed[3]. The position's delta of 0.485 indicates these contracts will capture roughly half of any upward stock price movement.

Cardinal Health has demonstrated strong performance, with the stock soaring 20.5% over the past 52 weeks and 7.7% in 2025, outpacing the broader market[3]. The Dublin, Ohio-based company manufactures and distributes pharmaceuticals and medical products, operating in over 30 countries with more than 48,000 employees. For fiscal 2025 (ending in June), analysts expect earnings to grow 5.6% year-over-year to $7.95 per share, indicating continued steady growth in this defensive healthcare sector player.

Analyst sentiment toward Cardinal Health is notably positive, with a consensus "Strong Buy" rating based on 11 "Strong Buy" and four "Hold" ratings among the 15 analysts covering the stock[3]. This represents a significant improvement from three months prior, when the stock had only a "Moderate Buy" consensus. The more modest size of this options position relative to others observed on March 10 may reflect the lower volatility and more stable nature of Cardinal Health compared to more speculative names. Nevertheless, the substantial premium commitment suggests meaningful conviction in continued upside for this healthcare distributor over the next month and a half.

The unusual options activity observed on March 10, 2025, provides a fascinating window into how sophisticated investors are positioning themselves amid significant market volatility. The substantial bearish positioning in Royal Caribbean contrasts sharply with the bullish bets on Five Below and Alaska Air Group, reflecting divergent views on different sectors in the current economic environment[18]. These high-conviction options trades, collectively representing over $25 million in premium commitments, demonstrate how institutional investors use options markets to express nuanced views on individual companies rather than simply making directional market bets.

As the broader market continues to digest concerns about tariffs, inflation, and potential economic slowdowns, these unusual options positions may provide valuable signals about sector-specific expectations. The concentration of bearish positioning in travel (Royal Caribbean) and cautious positioning in healthcare technology (Hims & Hers) versus bullish positioning in retail (Five Below), airlines (Alaska Air), and traditional healthcare (Cardinal Health) suggests investors may be discriminating between sectors they view as vulnerable versus resilient in the current environment[11]. With the S&P 500 experiencing its worst week since September and now down 6.09% from its February peak, these options traders appear to be taking calculated positions based on specific company fundamentals rather than simply reacting to broader market sentiment.

Investors should view these unusual options activities not as recommendations but as data points that provide insight into how sophisticated market participants are positioning themselves. The substantial financial commitments behind these trades suggest they represent deliberate strategic positioning rather than random market noise. As market volatility continues to create both challenges and opportunities, understanding these high-conviction options positions can provide valuable context for navigating the complex investment landscape of early 2025.

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Citations:

[1] https://www.youtube.com/watch?v=kIm_ANl3Gjs

[2] https://www.nasdaq.com/articles/alk-stock-surges-658-2024-will-momentum-continue-2025

[3] https://www.nasdaq.com/articles/are-wall-street-analysts-predicting-cardinal-health-stock-will-climb-or-sink

[4] https://longforecast.com/rcl-stock

[5] https://finance.yahoo.com/news/why-hims-hers-health-inc-070026375.html

[6] https://public.com/stocks/ferg/earnings

[7] https://www.bankrate.com/investing/unusual-options-activity/

[8] https://www.cnbc.com/2025/03/04/stock-market-today-live-updates.html

[9] https://www.nasdaq.com/articles/can-five-below-stock-turn-50-drop-2024-50-gain-2025

[10] https://coincodex.com/stock/ALK/price-prediction/

[11] https://www.reuters.com/markets/us/futures-lower-tariff-worries-continue-tesla-falls-2025-03-10/

[12] https://investor.fivebelow.com/news/press-release-details/2025/Five-Below-Inc.-Announces-Holiday-Sales-Results-for-Quarter-To-Date-Through-January-4-2025/default.aspx

[13] https://www.hellenicshippingnews.com/stock-market-snapshot-for-15-01-2025/

[14] https://markets.businessinsider.com/stocks/five-stock

[15] https://www.advisorperspectives.com/dshort/updates/2025/02/28/s-p-500-snapshot-back-below-6000

[16] https://stockscan.io/stocks/FIVE/forecast

[17] https://www.spglobal.com/marketintelligence/en/mi/research-analysis/securities-finance-january-snapshot-2025-.html

[18] https://www.advisorperspectives.com/dshort/updates/2025/03/07/s-p-500-snapshot-worst-week-since-september

[19] https://www.investors.com/research/best-stocks-sp500-sp400-sp600-magnificent-earnings-growth-march-2025/

[20] https://www.stocktitan.net/news/CAH/

[21] https://www.marketbeat.com/stocks/NYSE/RCL/forecast/

[22] https://www.forbes.com/sites/greatspeculations/2025/02/21/hims-stock-is-the-risk-worth-the-reward/

[23] https://www.zacks.com/stock/research/FERG/earnings-calendar

[24] https://ainvest.com/news/unusual-options-activity-3-3-2025-decoding-market-signals-high-stakes-options-trading-2503/

[25] https://www.cnbc.com/2025/03/10/5-things-to-know-before-the-stock-market-opens-monday.html

[26] https://www.wallstreetzen.com/stocks/us/nyse/alk/stock-forecast

[27] https://coincodex.com/stock/CAH/price-prediction/

[28] https://www.tradingview.com/symbols/NYSE-RCL/forecast/

[29] https://longforecast.com/hims-stock

[30] https://finance.yahoo.com/news/ferguson-enterprises-first-quarter-2025-124514703.html

[31] https://www.schwab.com/learn/story/market-snapshot

[32] https://www.profarmer.com/pro-farmer-max/market-snapshot/market-snapshot-february-26-2025

[33] https://www.barchart.com/futures/quotes/ZFU25/technical-chart

[34] https://www.youtube.com/watch?v=i10EcuF1MdA

[35] https://finance.yahoo.com/quote/FIVE/

[36] https://finance.yahoo.com/quote/FIVE/history/

[37] https://investor.fivebelow.com/news/press-release-details/2025/Five-Below-Inc.-AnnouncesFourth-Quarter-and-Full-Year-Fiscal-2024-Earnings-Release-and-Conference-Call-Date/default.aspx

[38] https://investor.fivebelow.com/stock-information/stock-quote-and-chart/default.aspx