Call Traders Scored a Quick Profit With Carvana Stock

Subscribers to our new In-the-Money Countdown (ITMC) service scored a 102% profit in just two trading sessions with our Carvana Co (NYSE:CVNA) weekly 2/9 37.50-strike call. We recommended this contract on Sunday, Feb. 4, after the stock's Friday close of $43.45.

At the end of last week, the stock was seeing support at its converging 80- and 160-day moving averages, as well as its 20-week trendline. The price was also near a pivot zone at $38-$40, and had pulled back near its 61.8% Fibonacci retracement level. 

Furthermore, there was a potential floor at the 40-strike, home to large put open interest (OI), while short interest represented 32.4% of the stock's available float, leaving plenty of short squeeze potential. 

Calls also looked like a good way to go when betting on CVNA, as its Schaeffer's Volatility Index (SVI) ranked in the low 4th percentile of its annual range, meaning low volatility expectations from options traders. The stock's Schaeffer's Volatility Scorecard (SVS) of 81 out of 100 also indicated that the equity usually outperforms these volatility expectations. 

Carvana stock has been in rally mode since the beginning of the week, and was last seen up 8.8% to trade at $52.14 at last glance. The shares are on track for their best week since mid-December, but our subscribers already doubled their investment and exited their positions on Tuesday, Feb. 6, protecting themselves from any potential pullbacks.