Snowflake Inc (NYSE: SNOW) shares have been stuck on a downward trajectory since November, but the stock is starting to heat up, trading higher by about 13% since Monday's close.
Although Market Rebellion co-founder Pete Najarian noted he wouldn't buy the stock, he bought Snowflake short-term call options.
"I'll trade the calls because that gives me that leverage that I want to have without as much exposure," Najarian said Wednesday on CNBC's "Fast Money Halftime Report."
He noticed increased buying volume in the March expiration $200 strike calls, adding, "Already today, they went from $1 to $5."
"I think you can trade these names, but again, you don't want to be in these stocks because they can be a widowmaker in just days or weeks," Najarian said, referencing stocks with extremely high price-to-earnings multiples.
Related Link: How Snowflake Investors Can Learn From Microsoft (NASDAQ:MSFT)
A majority of the options volume is very short-term, he warned, adding that although he's still holding the Snowflake call options, he would have trimmed when the stock ran up to $197 this morning if he wasn't distracted at the time.
SNOW Price Action: Snowflake has traded between $164.29 and $405 over a 52-week period. The stock was up 8.57% at $185.48 Wednesday afternoon at publication.
Photo: Courtesy of Snowflake.
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