Core Scientific Options Volume Spikes, Pointing to Bets on Significant Volatility

Options market activity for Core Scientific (NASDAQ: CORZ) saw a dramatic increase on August 28, with total volume reaching 207,606 contracts. This surge was heavily skewed toward bullish bets, indicating that traders are positioning for a significant upward move or a spike in volatility, even as the company's stock price fell.

A Closer Look at the Trading

The most telling metric from the day's activity was the lopsided ratio of calls to puts. According to market data, call options, which are typically bets on a price increase, accounted for 166,077 of the contracts traded, overwhelming the 41,529 put contracts.

This activity was concentrated in several key out-of-the-money strikes for November and December expirations, suggesting traders are anticipating a large rally before year-end. Notable trades included:

• 30,000 contracts for the November $30 calls
• 30,000 contracts for the December $27 calls
• 15,000 contracts for the November $21 calls

Sophisticated strategies were also in play, including a large condor spread in January 2027 calls and a put diagonal spread, which indicate some traders are hedging or betting on a near-term dip before a potential rebound.

Contradictory Market Signals

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The bullish options sentiment stood in stark contrast to the stock's performance on the same day. Shares of Core Scientific fell 7.46% to close at $16.31. This divergence highlights a classic conflict between options market expectations and immediate price action.

While 3-month implied volatility cooled slightly, it remains elevated at 73.47%, reflecting the market's anticipation of continued price swings. The options skew, a measure of demand for puts versus calls, also suggested traders were paying a premium for upside exposure, reinforcing the bullish outlook seen in the volume data.

Context for Investors

This flurry of options activity comes at a critical time for Core Scientific. The company faces significant fundamental challenges, including negative earnings per share and high cash burn. Analyst ratings are mixed, with a consensus price target of $37.12—more than double the current price—but a fair value estimate of just $14.73, below the current market price.

However, recent corporate actions, such as securing $600 million in new credit facilities and a $444 million acquisition to expand power capacity, may be fueling speculation of a turnaround. For investors, the options data suggests a high-risk, high-reward scenario where a potential gamma squeeze could amplify any upward move, but the underlying company fundamentals remain a significant risk.