Tilray Moves Higher, Options Traders Place Their Bets

Tilray Inc’s TLRY stock was flying higher on Thursday through a resistance level near the $17.50 area.

A House committee on Thursday approved a funding bill with provisions that would protect banks from doing business with state-legal cannabis companies, which is a major hurdle when they try to grow their businesses.

Although Tilray is a Canadian pharmaceutical and cannabis company, the news could help lift the sector during a time when cannabis stocks usually go seasonally dormant.

Tilray has also become a darling of various Reddit communities for the large amount of short interest on the stock. As of May 28, 29.97% of Tilray’s 426.68 million float is held short. Options traders also believe there’s upside for Tilray’s stock and purchased $496,448 worth of call contracts.

See Also: S420: The First Ever US Cannabis Equity Index Future Contract

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

The Tilray Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

• At 9:56 a.m., Thursday a trader executed a call sweep at the ask of 469 Tilray options with a strike price of $23.50 expiring on July 30. The trade represented a $43,148 bullish bet for which the trader paid 92 cents per option contract.
• At 10:03 a.m., a trader executed a call sweep near the ask of 400 Tilray options with a strike price of $16.50 expiring on June 25. The trade represented a $65,200 bullish bet for which the trader paid $1.63 per option contract.
• At 10:35 a.m., a trader executed a call sweep near the ask of 250 Tilray options with a strike price of $19 expiring on July 16. The trade represented a $32,500 bullish bet for which the trader paid $1.30 per option contract.
• At 10:39 a.m., a trader executed a call sweep near the ask of 392 Tilray options with a strike price of $22 expiring on Sept 17. The trade represented a $99,960 bullish bet for which the trader paid $2.55 per option contract.
• At 10:39 a.m., a trader executed a call sweep near the ask of 473 Tilray options with a strike price of $18 expiring on June 25. The trade represented a $37,840 bullish bet for which the trader paid 80 cents per option contract.
• At 10:54 a.m., a trader executed a call sweep at the ask of 200 Tilray options with a strike price of $17 expiring on June 25. The trade represented a $32,800 bullish bet for which the trader paid $1.64 per option contract.
• At 11:12 a.m., a trader executed a call sweep at the ask of 300 Tilray options with a strike price of $24 expiring on Aug. 20. The trade represented a $45,000 bullish bet for which the trader paid $1.50 per option contract.
• At 11:36 a.m., a trader executed a call sweep at the ask of 200 Tilray options with a strike price of $18 expiring on July 23. The trade represented a $43,000 bullish bet for which the trader paid $2.15 per option contract.
• At 11:41 a.m., a trader executed a call sweep at the ask of 200 Tilray options with a strike price of $20 expiring on Jan. 20, 2021. The trade represented a $97,000 bullish bet for which the trader paid $4.85 per option contract.

TLRY Price Action: Shares of Tilray were up 3.3% to $18.19 at publication time.