XP jumped 31% today. Someone bought 50,000 calls on it last Friday.
Brandon Chapman caught that print and several others before Brazil exploded. The options market flagged this rally days before the headlines hit.
The Brazilian ETF climbed 12.5% today. Brandon ties the move to the Brazilian election, where Flavio Bolsonaro may be expected to finish ahead of Lula da Silva.
Petrobras rallied 11.5% on top of it. Brazil was the clear winner across global equities.
Brandon found the setup sitting in the options tape over a week ago. Bullish out of the money calls kept hitting EWZ and other Brazilian names near the lows.
Those buyers put dealers on the hook. Dealers sold the calls, so a rally forces them to buy stock to hedge.
The stocks ran overnight and over the weekend. Dealers had to chase, and the gamma squeeze did the rest.
Brandon compares it to a Saint Bernard hitting a doggy door. The dog busts the door right off its hinges.
In tonight’s video, Brandon walks through the prints behind the squeeze and the new flow showing up today:
- Nu Holdings printed 44,050 contracts in one trade on September 30 in the 13/14 call vertical. Volume hit 49,000 against 5,400 in open interest. Three days later, NU trades near $15 after a 13% day.
- XP saw 50,000 of the 23 strike calls bought near the ask on October 2 at a 33 delta. Brandon pegs it as a $5 million to $6 million trade. He now watches 26 as support after today’s 31% gap.
- Comcast drew 40,000 contracts of the January 15 25 strike calls today. Brandon reads that as a $25 target by January 15.
- KRE saw 10,000 of the December 18 67 strike puts. That strike lines up with support from May.
- CLF saw 5,500 contracts bought in one trade at the 12 strike. Metals had a strong session while bank flow turned bearish.
The Brazil trade showed its hand in the options market first. Brandon shows you how to spot the next one before it gaps.
