|Bid||34.52 x 800|
|Ask||34.78 x 800|
|Day's Range||31.14 - 36.54|
|52 Week Range||0.35 - 49.41|
|Beta (5Y Monthly)||4.32|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 12, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||30.00|
For months, the hottest investment on Wall Street has been an asset you won't even find on Wall Street: Bitcoin (CRYPTO: BTC). This past Friday, Feb. 19, Bitcoin surged above $56,000 per token, pushing its market cap to north of $1 trillion for the first time. Meanwhile, Bitcoin is up 777% over the same time frame.
On Monday, shares of Marathon Patent Group (NASDAQ:MARA) saw unusual options activity. After the option alert, the stock price moved down to $43.27. Sentiment: BEARISH Option Type: SWEEP Trade Type: PUT Expiration Date: 2021-03-26 Strike Price: $15.00 Volume: 100 Open Interest: 5772 Three Signs Of Unusual Options Activity Exceptionally large volume (compared to historical averages) is one reason for which options market activity can be considered unusual. The volume of options activity refers to the number of contracts traded over a given time period. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. a buyer finding a seller, or a seller finding a buyer). Another sign of unusual activity is the trading of a contract with an expiration date in the distant future. Usually, additional time until a contract expires allows more opportunity for it to reach its strike price and grow its time value. Time value is important to consider because it represents the difference between the strike price and the value of the underlying asset. Contracts that are "out of the money" are also indicative of unusual options activity. "Out of the money" contracts occur when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin. Bullish And Bearish Sentiments Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. Although the activity is suggestive of these strategies, these observations are made without knowing the investor's true intentions when purchasing these options contracts. An observer cannot be sure if the bettor is playing the contract outright or if they're hedging a large underlying position in a common stock. For the latter case, the exposure a large investor has on their short position in common stock may be more meaningful than bullish options activity. Using These Strategies To Trade Options Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account. For more information to understand options alerts, visit https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts See more from BenzingaClick here for options trades from Benzinga12 Information Technology Stocks Moving In Monday's Pre-Market SessionAnalyzing Marathon Patent Group's Unusual Options Activity© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
As the price of Bitcoin (CCC:BTC-USD) continues to climb, so does the price of Marathon Patent (NASDAQ:MARA) stock. The patent troll-turned-crypto miner has seen its shares soar more than 20-fold since November. But is this sustainable for MARA stock? Source: Shutterstock These gains have far outpaced even Bitcoin’s impressive run during the same period. As I wrote previously, this is understandable. With the costs of cryptocurrency mining largely fixed, a rise in the price of Bitcoin will produce an outsized increase in profits for the miner. That’s assuming Marathon already has a substantial crypto mining operation. However, it doesn’t. Take a look at its financial results, and you’ll see the company has generated just $1.5 million in sales over the past 12 months.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Compare that to Marathon Patent’s current market capitalization (around $4.2 billion), and it’s clear things have gotten out of hand. Even with the proceeds of last month’s $250 million registered direct offering, and the company’s Bitcoin mining projections (more below), there’s no guarantee it’ll produce the results needed to justify today’s valuation. With this uncertainty in mind, it makes little sense to buy in at today’s prices (around $45 per share). MARA Stock: Perception Versus Reality With the surging interest in crypto prices, scores of small companies have looked to exploit the situation. It’s similar to what we saw a few years back, during the last “Bitcoin boom.” Companies with no prior interest in the space suddenly started calling themselves “cryptocurrency companies.” 7 Overvalued Stocks Investors Just Don’t Get Tired Of With stocks trading on major exchanges more accessible than Bitcoin itself, this hoodwinks many investors. And, with many buying on the headlines, instead of on fundamentals, shares in these high-flyers can reach unsustainable levels. That’s what it’s starting to look like with this situation. Admittedly, unlike some of the other Bitcoin coattail riders out there, this early stage miner at least has laid out projections that (in theory) could justify its current stock price. As seen from a Feb. 1 press release, Marathon has implied it’ll soon be highly profitable, once it deploys all of its mining hardware. If it can put all of its machines into operation, the company could produce up to 60 bitcoins per day. At current prices ($50,000 per BTC), that means $3 million per day in revenue. With its operating costs at around $4,500 per Bitcoin mined, that could mean $2.73 million per day in gross profit. On an annual basis, that’s near $1 billion in gross profit. To some, numbers like this could help justify the company’s current $4 billion valuation. Yet, mining Bitcoin is far from being a “set it and forget” type of operation. It may sound like all Marathon Patent has to do is plug in its hardware, and wait for the money to roll in. But, there’s no such thing as a free lunch. This aspiring miner will have to overcome substantial hurdles if it wants to live up to expectations. Why This Aspiring Miner Could Fall Flat on Its Face Based on the current price of BTC, it could be generating $1 billion per year, once it fully deploys its mining hardware. However, the aforementioned press release makes mining for crypto sound easier than it is in practice. Namely, it downplays the possible negative impact from what’s known as the “difficulty rate.” What’s that? It’s a measurement of the computing power it takes to mine a Bitcoin block. Over time, difficulty rates have continued to rise. As of late, this rate of difficulty has slowed down. This may give credence to this company’s ambitious projections. Yet, don’t expect a slowing difficulty rate to last for long, given new hardware will soon come online. How could this hurt Marathon Patent? If the “difficulty rate” rises substantially, it’ll mine far less Bitcoin than previously projected. The stock is priced as if its operations will go off without a hitch. But, if hiccups arise, shares have substantial room to fall. Bull Case Remains for Crypto—Just Not for Marathon Patent To be clear, I’ve long been, and will continue to be, one of the biggest crypto bulls out there. But, the bull cases for crypto, and this stock, are not one and the same. While on the surface it may seem current trends support higher prices for Marathon Patent, unfortunately that’s not the case. On paper it claims it could eventually produce 60 bitcoins per day. After expenses, that would mean nearly $1 billion per year in gross profits. Yet, like I said above, mining for crypto is much more difficult in practice. With a high chance of this aspiring miner falling flat on its face, continue to avoid MARA stock. On the date of publication, Matt McCall held a position in Bitcoin. The InvestorPlace Research Staff member primarily responsible for this article held a position in Bitcoin. Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post I’m Bullish on Crypto, But Not on Marathon Patent Stock appeared first on InvestorPlace.