2 Stocks Options Traders Can't Get Enough Of

CoreWeave (CRWV) surged 12.3% to $137.57 after securing a $14 billion infrastructure deal with Meta Platforms, adding to a recent $6.5 billion OpenAI contract, with significant call option activity and short-squeeze potential noted. In contrast, DraftKings (DKNG) dropped 10.2% to $38.02 following reports of record trading volumes for competitor Kalshi, contributing to a 20.8% September decline, despite high brokerage 'buy' ratings and continued call option interest.

Analysis

Divergent performance characterizes CoreWeave (CRWV) and DraftKings (DKNG), driven by fundamental news and shifting market sentiment. CoreWeave surged 12.3% to $137.57 after securing a landmark $14 billion infrastructure contract with Meta Platforms, which follows a recent $6.5 billion deal with OpenAI. This has propelled the stock to a 243% gain since its March debut and triggered a surge in bullish options activity, with call volume at 400,000 contracts—double the intraday average—and traders actively buying new positions in the weekly $140 and October $150 strike calls. With 11% of the float sold short, the stock is also positioned for a potential short squeeze. Conversely, DraftKings fell 10.2% to $38.02, contributing to a 20.8% decline for September, after a report highlighted record trading volumes for competitor Kalshi. Despite this price weakness, call options volume was four times the intraday average. However, the stock's vulnerability is underscored by its analyst coverage: 28 of 31 firms rate it a 'buy' or better, creating a significant risk of future downgrades that could amplify bearish pressure should the stock continue to struggle.

Key Decisions for Investors

• For CoreWeave, the combination of major new contracts, extremely bullish options flow, and a high short interest of 11% presents a tactical opportunity, as a short squeeze could further fuel its momentum toward the $150 level.
• Investors in DraftKings should exercise caution, as the 20.8% September decline on news of a competitor's strength suggests a negative shift in fundamentals, creating a high risk of analyst downgrades from the currently bullish consensus of 28 'buy' ratings.
• While the surge in DraftKings call volume indicates some traders are betting on a rebound, the stock's attempt to hold its year-to-date breakeven level is a critical technical support to watch before considering any contrarian positions.