This Addition To Cathie Wood's ARKX Fund Is Drawing Big Bets From Options Traders

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Kratos Defense & Security Solutions (NASDAQ: KTOS) is the third top holding of Cathie Wood’s ARK Space Exploration and Innovation ETF, and options traders are betting Kratos stock will make a big move in the coming weeks.

The ETF is set to launch Tuesday on the Cboe BRX exchange under the ticker “ARKX.”

The Kratos Trades: At 9:47 a.m. Monday, a trader executed a call sweep of 288 Kratos options with a $22.50 strike price expiring on May 21. The trade represented a $138,200 bullish bet for which the trader paid $4.80 per option contract.

At 9:52 a.m., a trader executed a call sweep of 367 Kratos options with a $30 strike price expiring on April 16. The trade represented a $16,500 bullish bet for which the trader paid 45 cents per option contract.

At 10:14 a.m., a trader executed a call sweep of 210 Kratos options with a $30 strike price expiring on April 16. The trade represented a $10,400 bullish bet for which the trader paid 50 cents per option contract.

At 10:14 a.m., a trader executed a call sweep of 287 Kratos options with a $30 strike price expiring on April 16. The trade represented a $15,700 bullish bet for which the trader paid 55 cents per option contract.

At 10:18 a.m., a trader executed a call sweep of 151 Kratos options with a $30 strike price expiring on April 16. The trade represented a $11,300 bullish bet for which the trader paid 75 cents per option contract.

At 10:20 a.m., a trader executed a call sweep of 393 Kratos options with a $30 strike price expiring on April 16. The trade represented a $31,400 bet for which the trader paid 80 cents per option contract.

Together, the traders are betting $223,500 that the share price of Kratos is going higher.

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 options instead of placing a bid, which sweeps the order books 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.

What Kratos Has To Offer: Kratos, a national security and communications company, has developed a number of products for use in space including systems, networks, satellites and signals.

On Monday, Kratos announced that the American Society of Civil Engineers recognized Kratos’ autonomous truck-mounted attenuator.

Kratos refers to the technology as an “infrastructure gamechanger” in the release.

It’s no wonder Wood’s space and innovation focused ETF has bought shares of the company.

So far Wood has purchased 2,203 shares of Kratos at a cost of $57,322. The stock makes up 5.62% of the ETF’s holdings.

Options traders could be betting the stock is set to increase in the near future. Other top holdings include Trimble Inc (NASDAQ: TRMB) and ARK’s 3D Printing ETF (NYSE: PRNT).

KTOS Price Action: Shares of Kratos were up 6.3% at $27.66 at last check. 

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