FANG Call Spread Buyers Nab 9.4% Gain on $200K Bet as Stock Pushes Toward Key Technical Levels
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High-Volume Call Spread in FANG Delivers 9.4% Gain Within Hours
A noteworthy call spread trade in Diamondback Energy (NASDAQ: FANG) was executed on September 2, 2025, drawing attention for its size and near-term outlook. The buyers entered a 155/165 call spread with a total outlay exceeding $200,000, realizing a 9.4% gain within just a couple of hours as the stock moved $0.94 higher to $149.52.
Key Trade Details: Large Bet with Defined Upside
| Trade Date & Time | Sep 02, 2025, 10:25:31 |
|---|---|
| Expiration | Sep 19, 2025 (17 days to expiry) |
| Option Strikes | 155 / 165 (Call Spread) |
| Contracts | 2,500 |
| VWAP Trade Price | $1.60 |
| VWAP Bid | $1.47 |
| VWAP Ask | $1.66 |
| Stock Reference Price | $148.58 |
| Profit at 12:30 PM | $0.15 per spread (+9.4%) |
To view more call spreads and multi-leg options trades like this, check out the Multi-Leg Trade Screener or this trade analyzer for FANG.
Strategic Intent: Potential $1 Million Payoff if Stock Exceeds $165
With $200,000 at risk, buyers stand to earn up to $1.0 million if FANG trades above $165 at expiration—a potential 5X payout in less than three weeks. For maximum gain, the stock needs to rally at least 10% from the trade entry. The quick profit already booked hints at nimble positioning around recent news flow and price action.
Technical Indicators Are Bullish: Price Momentum Improving Despite Lagging Long-Term Performance
While FANG has underperformed the S&P 500 over the past year (-22.0% vs. +15.1%), recent price action shows signs of a turnaround. Notably, the stock is up 9.2% over three months and 6.6% in the past two weeks, outpacing the broader market during both periods. Today's rally pushed the price 0.51% higher to $149.52, a break above its 20- and 50-day moving averages (by 5.0% and 4.9%, respectively), and signals a fast bullish crossover in moving averages—a pattern often watched for short-term momentum shifts.
| Time Frame | FANG Return | SPY Return |
|---|---|---|
| Today | +0.5% | -1.5% |
| 2 Weeks | +6.6% | -1.2% |
| 1 Month | -1.3% | +0.1% |
| 3 Months | +9.2% | +8.0% |
| 6 Months | -4.1% | +7.6% |
| 1 Year | -22.0% | +15.1% |
| YTD | -6.9% | +9.1% |
| 3 Years | +22.8% | +63.0% |
| 5 Years | +351.8% | +90.5% |
Short-term traders might see technical tailwinds, but longer-term investors have faced steeper headwinds. The current move above resistance ($151.57) and bounce off support ($145.96) could embolden near-term bulls.
Option Skew Indicators Are Bearish: Market Implied Volatility Ranks Low
Despite bullish technicals, FANG's options skew indicator shows a 21% rank—a bearish reading versus historical levels. In Market Chameleon's model, a higher rank suggests bullish positioning by the market; current levels suggest the crowd remains cautious or is positioning for limited upside in the near term.
Major News Catalyst: $750 Million Water Asset Sale Adds Intrigue
Today's options surge coincided with the announcement that Deep Blue Midland Basin LLC is acquiring Environmental Disposal Systems, LLC from Diamondback Energy for $750 million. This strategic deal strengthens Diamondback’s liquidity (with up to $875 million in total proceeds) and its foothold in sustainable water management in the Midland Basin. This acquisition nearly doubles Deep Blue's operational scale, adding immediate value for both partners and potential for performance-based earnouts. For traders, these headline catalysts can introduce new volatility, shift expectations for future earnings, or drive re-ratings in the underlying stock.
Takeaway: Fast Profit and Mixed Signals—What’s Next for FANG?
The large, short-dated call spread on FANG signals opportunistic positioning around technical improvement and potential catalysts. The quick profit captured in today’s trading suggests some traders expect near-term momentum, but the bearish skew implies a broader market hedge or skepticism about a sustained rally.
Investors may want to watch whether the stock can sustain this momentum and close above resistance as news developments unfold. To explore more call spreads and other option strategies in FANG and beyond, check the Multi-Leg Option Trade Screener for real-time insights and data-driven opportunities.
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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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