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ANET Call Spread Sees Rapid 23.7% Gain Amid 16% Stock Surge
In the options market, timing is everything. On August 6, 2025, a large call spread trade in Arista Networks (ANET) caught our attention for its size, structure, and fast profitability. As the underlying stock jumped 16.04%, buyers of this call spread notched a swift 23.7% gain in less than an hour. Let's break down what happened, the possible strategy at play, and what key technical and options indicators suggest for ANET’s outlook.
Key Details of the Trade: Over $319K at Risk for a $187K Potential Profit
| Trade Date/Time | Expiration | Strikes | Contracts | VWAP Price | Reference Stock Price | Spread Value at 10:20 | Spread Gain | Percent Gain |
|---|---|---|---|---|---|---|---|---|
| Aug 06, 2025 09:36:19 |
08-Aug-25 | 130-135 Call Spread | 2,022 | $3.15 | $135.40 | $3.90 | $0.75 | 23.7% |
- Total paid by buyers: $319,000+
- Max profit potential: ~$187,000 if ANET closes above $135 on August 8, 2025
- Trade analyzer for details: Multi-leg trade analyzer
Bullish Technical Indicators Back the Trade’s Success
The 130-135 call spread's rapid payoff wasn’t a coincidence. ANET’s stock broke out sharply, adding $18.95 for a 16.04% gain on the day, moving from $135.40 at the trade’s initiation to $137.07. Notably, this surge outperformed the S&P 500 (SPY) by a wide margin—ANET’s returns are not just about short-term volatility; they represent persistent strength:
| Duration | ANET Return | SPY Return |
|---|---|---|
| Today | +16.1% | +0.2% |
| 2 Weeks | +24.9% | +0.1% |
| 1 Month | +33.7% | +0.6% |
| 3 Months | +51.7% | +12.0% |
| 6 Months | +18.7% | +4.7% |
| 1 Year | +74.1% | +23.0% |
| YTD | +24.0% | +8.0% |
| 3 Years | +332.8% | +57.2% |
| 5 Years | +832.8% | +99.2% |
Other bullish indicators include:
- Price now sits 20.8% above its 20-day moving average, 33.9% above its 50-day, and 41.4% above the 250-day—confirming strong upward momentum.
- All major moving averages show a pronounced uptrend.
- ANET consistently beats SPY in all key periods—especially notable with +74.1% versus +23.0% for 1-year return.
The stock has decisively broken above its expected daily resistance (120.71), showing potential for continued volatility and possible further gains.
Option Skew Signals Caution—Is the Market Getting Overheated?
Despite bullish price momentum, the options market paints a more nuanced picture. The 30-day implied volatility skew for ANET sits at just the 21% rank (on a scale where 100% is the most bullish and 0% the most bearish for the past 52 weeks). This means traders are pricing in more downside risk than upside, suggesting either profit-taking or a degree of caution following ANET’s explosive run.
Why the Call Spread, and What’s Next for ANET?
With only two days until expiration, the 130-135 call spread was a calculated, risk-defined wager on near-term momentum. The structure let traders risk about $3.15 per contract to target a $5 maximum payoff—roughly a 59% return at maximum, achieved if ANET stays above $135 through expiration. Given the stock’s leap past this level, early buyers locked in profits quickly as option prices surged with volatility and upward movement.
Looking for more trades like this? Try the multi-leg option trades screener to explore similar opportunities.
Key Takeaways: Mixed Market Signals Offer Opportunity—and Caution
While the data underscores strong bullish price action for ANET and a quick, successful trade for the call spread buyers, it’s notable that option market sentiment remains more cautious. This tension—a stock breaking out above resistance and averages, with option skew signaling hesitation—suggests opportunity for nimble traders but warrants vigilance against abrupt reversals.
Is the options market being too cautious, or does the skew foreshadow an imminent pause? For those following ANET, the blend of powerful technicals and skeptical options sentiment is worth watching as expiration approaches.
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NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
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