Smart money bets big on American Express options
- High-rolling investors currently exhibit a bearish sentiment toward American Express, with the majority of options trades being bearish.
- The analysis of recent trades indicates a price target range between $280.0 and $340.0 for American Express.
- Retail traders should be cautious and monitor market trends closely due to the prevailing bearish sentiment among major investors.
In the United States on December 10, 2024, high-rolling investors demonstrated a significant bearish sentiment towards American Express options, as revealed by recent activity in the options market. Benzinga's options scanner identified a total of eight options trades for American Express, which showcased an uncommon pattern of investment behavior. Among those trades, only 12% exhibited a bullish sentiment while a staggering 62% expressed bearish tendencies, indicating a clear preference among major traders for a downside movement of the stock in the near future. One notable aspect of the trading activities was the substantial dollar amounts involved, with a single put trade reflecting a total of $35,770 and seven call trades aggregating $388,523. The analysis of the volume and open interest within these options contracts suggested that major players were eyeing a price target range for American Express between $280.0 and $340.0 over the past quarter. This targeted range is pivotal for gauging market sentiment and can provide insights into investor confidence regarding the performance of American Express moving forward. With a current trading volume recorded at 594,132, American Express's share price stood at $301.91, reflecting an increase of 1.75%. However, analysts warn that the Relative Strength Index (RSI) indicators indicate that the stock may be approaching an overbought condition. This technical analysis suggests that the current uptick in price may not sustain itself without stronger underlying support. The analysts have been vocal about their outlook on American Express, with differing perspectives influencing the sentiment among retail investors as well. Recent reports from analysts outlined a split in opinions. For instance, an analyst from JP Morgan maintained a neutral rating on American Express with a target price of $301, while another analyst from Keefe, Bruyette & Woods retained an outperform rating, projecting a higher price target of $350. This divergence among analysts indicates an existing uncertainty in the market regarding the long-term performance of American Express, further compounded by the distinct pattern of options trading—the majority leaning bearish. As these circumstances unfold, it becomes increasingly critical for retail traders to remain attentive to market signals that may directly reflect their investment decisions in the shares of American Express.