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By Ainvest in options-flow —

🎢 FUN $3.6M Put Protection - Smart Money Hedges Six Flags Before Earnings! 🛡️

Massive $3.6M institutional bet detected on FUN put options. Someone just dropped $3.6 MILLION on FUN puts at market open! This defensive hedge grabbed 7,500 contracts of $22.50 strike puts expiring December 19th - protecting downside just 42 days out as Six Flags Entertainment trades near $18.60 fo

🎯 The Quick Take

Someone just dropped $3.6 MILLION on FUN puts at market open! This defensive hedge grabbed 7,500 contracts of $22.50 strike puts expiring December 19th - protecting downside just 42 days out as Six Flags Entertainment trades near $18.60 following yesterday's brutal 9.8% post-earnings selloff. With the stock down 58% since the Cedar Fair merger closed in July and activist investors circling, this $22.50 strike (21% above current price) signals sophisticated money betting on a dead cat bounce rally that they want protection against - or they're hedging a short position expecting further downside. Translation: Smart money is preparing for continued volatility in this broken theme park operator!

📊 Company Overview

Six Flags Entertainment Corporation (FUN) is North America's largest regional amusement park operator following its transformational merger:

  • Market Cap: $1.86 billion (down from $3B+ pre-merger)
  • Industry: Services - Amusement & Recreation Services
  • Current Price: $18.60 (down 58% from post-merger high of $44)
  • Primary Business: 27 amusement parks, 15 water parks, 9 resort properties across North America
  • Recent Catalyst: Q3 2024 earnings reported November 6, 2024 - first full quarter as combined company with Cedar Fair

The Merger Story: The $8 billion Cedar Fair and Six Flags "merger of equals" closed July 1, 2024, combining 42 parks under the Six Flags brand. The thesis: $200 million in synergies ($120M cost savings, $80M revenue uplift) and a path to $800M+ annual free cash flow by 2027. The reality: Execution has been rough.

💰 The Option Flow Breakdown

The Tape (November 7, 2025 @ 09:31:20):

Date Time Symbol Buy/Sell Call/Put Expiration Premium Strike Volume OI Size Spot_Price Option_Price Option_Symbol
2025-11-07 09:31:20 FUN BUY PUT 2025-12-19 $1.8M 22.5 7.5K 7.8K 3750 18.6 4.9 FUN20251219P22.5
2025-11-07 09:31:20 FUN BUY PUT 2025-12-19 $1.8M 22.5 3.8K 7.8K 3750 18.6 4.8 FUN20251219P22.5

🤓 What This Actually Means

This is NOT your typical protective put - something interesting is happening here! Let me break it down:

  • 💸 Total premium paid: $3.6M ($4.85 average × 7,500 contracts across two trades)
  • 🎯 Unusual strike selection: $22.50 is 21% ABOVE current price of $18.60
  • ⏰ 42-day expiration: December 19, 2025 (quarterly triple witch)
  • 📊 Size matters: 7,500 contracts represents 750,000 shares (4% of daily volume!)
  • 🤔 Open interest context: These trades instantly created 7,500 OI where only 7,800 existed before

Wait... buying PUTS above current price? 🤯

This is the fascinating part! There are three possible scenarios:

Scenario A: Short Squeeze Hedge 🐻➡️🚀
If this trader is SHORT FUN stock from higher levels (say $25-30), they're worried about a short squeeze or dead cat bounce rally back to $22.50. These puts cap their losses at $22.50 - if FUN rallies hard on activist news or surprise turnaround, the puts pay off. Think of it like buying fire insurance WHILE your house is on fire.

Scenario B: Unusual Bearish Spread 📉
They might have SOLD puts at higher strikes ($25-27.50) and are buying these $22.50 puts as part of a bearish put spread, betting FUN stays below $22.50 by December. The premium of $4.85 seems high for a spread leg, but with FUN's extreme volatility (62% implied vol!), it makes sense.

Scenario C: Bounce Protection on Recent Short 🎢
Most likely scenario: Trader shorted FUN yesterday during/after the 9.8% earnings selloff at $19-20 levels. Now trading at $18.60, they're worried about a relief rally back to $22-23 and buying upside put protection. If FUN bounces 20%+ in next 42 days, these puts limit losses.

Unusual Score: 🔥 HIGH (3,750x2 average size per trade) - This is approximately 555x the typical FUN options trade size! While not quite "once in a lifetime" territory, this happens maybe once or twice per quarter for FUN. The fact that it came in TWO identical trades at the same second suggests it's from a single sophisticated trader splitting the order.

What's really happening: Most likely, this is a professional trader or hedge fund that has SHORTED FUN on the merger execution disaster and is buying protection against a squeeze or activist-driven rally. With Jana Partners owning 9% and demanding changes, plus five total activist funds circling, there's real risk of a 20-30% spike on takeover speculation or asset sale announcements.

📈 Technical Setup / Chart Check-Up

YTD Performance Chart

FUN Ytd Chart

FUN is in absolute free fall - down 58% since the merger closed in July 2024. The chart tells a brutal story of failed execution and shattered expectations. Started 2024 around $30 (pre-merger Cedar Fair price), spiked to $44 on July 1 merger completion, then collapsed in a nearly straight line to current $18.60.

Key observations:
- 💔 Epic collapse: From $44 merger high to $18.60 = -58% in just 4 months (July-November)
- 📉 Breakdown confirmed: Smashed through $30 support in August, $25 in September, $20 in November
- 🎢 Death spiral pattern: Each earnings report brings new lows as execution disappoints
- 📊 Volume explosion: Massive panic selling in October-November as activist news hits
- ⚠️ No floor yet: No signs of stabilization - could easily test $15-17 if next catalyst disappoints

Recent damage: Yesterday's 9.8% post-earnings crash from $20.60 to $18.60 reflects brutal Q3 reality - per-capita spending down 2%, attendance gains not offsetting revenue quality decline, and EBITDA guidance cut for the second time in 2025.

Gamma-Based Support & Resistance Analysis

FUN Gamma Sr

Current Price: $18.35

The gamma exposure map shows FUN is in a precarious technical position with very weak support below and overhead resistance:

🔵 Support Levels (Put Gamma Below Price):
- $17.50 - Immediate support with 1.06B total gamma exposure (strongest nearby floor!)
- $15.00 - Deep support at 93M gamma (disaster floor if we break $17.50)

🟠 Resistance Levels (Call Gamma Above Price):
- $20.00 - Major ceiling with 1.39B gamma (STRONGEST RESISTANCE - 9% overhead)

What this means for traders:
FUN is trapped between $17.50 support and crushing $20 resistance. The gamma data shows massive options positioning at $20.00 (1.39B - the single largest level) which creates natural selling pressure as price approaches. This screams "stay under $20 until something major changes."

Notice the put buyer's logic? They struck at $22.50 - well above the $20.00 gamma resistance ceiling. If they're short from higher levels, they're saying "I'll take profits if we hit $20, but I need insurance against a squeeze through $20 to $22.50." Smart risk management on a short position.

Net GEX Bias: Bearish (3.46B call gamma vs 3.83B put gamma) - Overall positioning remains defensive, with more put gamma suggesting traders expect downside or consolidation, not rally.

The lack of support levels between $17.50 and $15.00 is concerning - if FUN breaks $17.50, there's not much to stop a flush to $15. Bulls need to defend $17.50 or this gets ugly fast.

Implied Move Analysis

FUN Implied Move

Options market pricing for upcoming expirations:

  • 📅 Monthly OPEX (Nov 21 - 14 days): ±$2.02 (±11.03%) → Range: $16.29 - $20.32
  • 📅 Quarterly Triple Witch (Dec 19 - 42 days - THIS TRADE!): ±$3.23 (±17.65%) → Range: $15.07 - $21.54
  • 📅 Yearly LEAPS (Dec 18, 2026 - 406 days): ±$7.44 (±40.63%) → Range: $10.87 - $25.74

Translation for regular folks:
Options traders are pricing in a MASSIVE 11% move ($2) by November 21st - that's huge volatility for a $1.86B company! The December 19th expiration (when these puts expire) expects an even bigger 17.7% move ($3.23), with an upper range of $21.54.

Key insight for the put trade: The December implied move upper range of $21.54 is just below the $22.50 put strike! The put buyer is essentially saying "I think FUN could rally to the top of the expected range ($21-22) and I want protection beyond that in case activists force a deal or short squeeze happens."

The 40.6% implied move over the next year (range $10.87 to $25.74) reflects massive uncertainty about FUN's future. Market is pricing equal odds of:
- 🐻 Bear case: Collapse to $10-11 if debt burden crushes them and they're forced to sell parks at distressed prices
- 🐂 Bull case: Rally to $24-26 if activists force a sale of entire company or major turnaround succeeds

Why implied vol is so high (62%): Five activist investors now own significant stakes (Jana Partners, Sachem Head, H Partners, Dendur, Land & Buildings), Q4 earnings coming February 27, 2025, ongoing merger integration, and $5.3B debt burden create binary event risk. This stock can move 10-20% on any major news.

🎪 Catalysts

🔥 Past Catalysts (Already Happened)

Q3 2024 Earnings - November 6, 2024 (YESTERDAY!) 📊

FUN reported first full quarter as combined entity[^9], and results were... not great:

  • 📊 Revenue: $1.35B (up $506M YoY[^9], but only due to merger adding Cedar Fair parks)
  • 👥 Attendance: 21.0 million guests (8.5M increase[^10], again merger-driven)
  • 💸 The problem: In-park per capita spending dropped $1.43 or 2% to $61.27[^10]
  • $0.77 of decline from legacy Six Flags parks (worse spending patterns)[^10]
  • Rest from lower season pass pricing and higher pass holder mix[^10]
  • 📉 Stock reaction: Down 9.8% as market realized attendance gains aren't offsetting revenue quality issues

Why this matters for the put trade: The earnings disappointment validates bear thesis - merger isn't working as planned. If trader is short, yesterday was vindication. Now they're worried earnings beat was "not bad enough" and stock could bounce on activist optimism.

Cedar Fair/Six Flags Merger Completion - July 1, 2024 🎢

The $8 billion merger created North America's largest regional park operator[^2] with 42 parks:
- 🎯 Synergy targets: $200M total ($120M cost, $80M revenue) over 2-3 years[^8]
- 💰 Progress: $50M run-rate cost synergies achieved by Q3 2024[^7]
- 📊 Integration: IT systems migration on track[^7], full-time headcount cut 10%+[^7]
- ⚠️ The problem: Revenue synergies not materializing - per-capita spending declining![^10]

Jana Partners Activist Campaign - October 21, 2025 🚀

Jana Partners announced 9% stake (~$200M) alongside NFL star Travis Kelce[^5][^14], demanding:
- 🎯 Revitalize branding and marketing[^14]
- 🔧 Improve operations and accelerate technology[^14]
- 👔 Assess leadership and governance[^14]
- 💰 Evaluate selling underperforming parks or entire company[^14]

Stock jumped 18% on news[^15] - this is exactly the kind of "short squeeze catalyst" our put buyer is worried about! With five activist funds now involved[^5] (Jana, Sachem Head 4.82%, H Partners 4.59%, Dendur 4.38%, Land & Buildings), takeover speculation is real.

🚀 Upcoming Catalysts (Next 6 Months)

Q4 2024 & Full Year Earnings - February 27, 2025 (112 DAYS!) 📊

FUN will report Q4 and full-year results pre-market February 27, 2025[^21]:

Preliminary Q4 results already disclosed:
- 👥 Attendance: 10.7M guests (5.0M from legacy Six Flags)[^21]
- 💰 Net revenues: $687M ($324M from legacy Six Flags)[^21]
- 📊 Adjusted EBITDA: $209M ($113M from legacy Six Flags)[^21]

2025 Initial Guidance provided:
- 🎯 Adjusted EBITDA: $1.08B to $1.12B (excluding portfolio optimization)[^21]
- 📈 First two months 2025: 2% attendance increase, 3% season pass unit sales increase[^21]
- 💵 Remaining cost synergies: $70M by end of 2025[^21]

The catch: Company has already cut 2025 guidance TWICE this year - from $1.08-1.12B initial target down to $860-910M range by August[^22][^23], then further adjusted in November. This pattern of missed targets is destroying credibility.

Key metrics to watch:
- Can they hit (or raise!) 2025 EBITDA guidance for once?
- Per-capita spending trends - stabilizing or still declining?[^10]
- Season pass pricing power and renewal rates[^19]
- Free cash flow generation vs $800M 2027 target[^11]

CRITICAL for put trade: Expires December 19, BEFORE this earnings report. Put buyer needs FUN to stay below $22.50 in next 42 days, well before Q4 earnings risk.

2025 New Attraction Openings - Spring/Summer 2025 🎢

FUN announced $500-525M in 2025 capex including seven new roller coasters[^24][^25]:

Major attractions:
1. Wrath of Rakshasa (Six Flags Great America) - 171-foot beyond-vertical drop, five inversions[^25]
2. AlpenFury (Canada's Wonderland) - Canada's tallest, fastest launch coaster, 9 inversions[^25]
3. Quantum Accelerator (Six Flags New England) - LSM multi-launch coaster[^25]
4. Rapterra (Kings Dominion) - 50th anniversary attraction[^25]
5. Two family rides at Carowinds - Largest family investment in park history[^25]

Plus: $80M in F&B upgrades, new restaurant concepts[^25]

Bull case impact: New attractions typically drive 5-10% attendance increases in debut year. If all seven deliver, could boost 2025 attendance toward 55M target and validate the growth story.

Bear case impact: These attractions won't open until April-May 2025, AFTER Q4 earnings and AFTER these puts expire December 19. So they're irrelevant to the put trade thesis.

Portfolio Optimization Announcements - Q1-Q2 2025 💰

As part of "Project Accelerate,"[^11] FUN will conduct comprehensive portfolio review to evaluate "potential divestiture of non-core assets to help reduce leverage"[^11]:

What could be sold:
- Excess and undeveloped land parcels[^12]
- Underperforming parks in secondary markets[^12]
- Real estate monetization opportunities[^28]
- Maybe entire company if activists push hard enough!

Timeline: Portfolio review results likely disclosed in Q4 earnings call (Feb 27, 2025) or earlier if activists force acceleration.

Impact on puts: Asset sale announcements could rally stock 10-20% on "deleveraging progress" narrative. This is a key risk to short positions that the $22.50 puts are hedging against!

Peak Summer 2025 Season Pricing Test - July-August 2025 ☀️

FUN's 2025 pricing strategy is risky - lowered season pass prices to $65-69 (down ~45% from prior $120 Platinum Pass)[^18] to drive volume:

  • 🎫 Gold Pass: $69, removes blackout dates[^18]
  • 💳 Prestige membership: $12.99/month[^18]
  • 🌎 All-Park Passport add-on: $65-125 for access to all 42 parks[^17]

The gamble: Can attendance gains offset lower per-visit economics? Q3 showed this ISN'T working yet - attendance up but per-capita spending down 2%[^10].

Critical period: July-August 2025 peak season will prove whether this strategy works or destroys margins. But that's 8+ months away, irrelevant to December 19 put expiration.

Merger Synergy Milestones - H1 2025 ⚙️

Company targeting $70M additional cost reductions for H2 2025, two-thirds permanent[^7]:

Synergy timeline:
- ✅ By End of 2024: $50M run-rate savings (achieved)[^7]
- 🎯 By End of 2025: Additional $70M savings ($120M total)[^8]
- 🚀 By End of 2026: Additional $60M beyond original target ($180M total cost synergies)[^27]
- 💰 By 2027: $80M revenue synergies from cross-selling[^8]

Enhanced targets: Management raised cost savings ambitions beyond original $200M, now targeting incremental $60M by end of 2026.[^27]

Why this matters: If synergies accelerate ahead of schedule, it validates the merger thesis and could rally stock. Another "squeeze risk" for shorts that these puts hedge.

🎲 Price Targets & Probabilities

Using gamma levels, implied move data, and upcoming catalysts, here are scenarios through December 19th expiration:

📈 Bull Case (30% probability)

Target: $21-23 (TEST THE PUT STRIKE!)

How we get there:
- 🚀 Activist deal announcement: Jana Partners or consortium forces board to explore strategic alternatives (full company sale or park divestitures)
- 💰 Asset sale rumors at premium valuations drive takeover speculation
- 📰 Takeover bid emerges from private equity (Apollo, Blackstone) or strategic buyer (Comcast/Universal)
- 📊 Better-than-feared holiday season attendance data for Q4 released early
- 🎯 Management pre-announces they'll MEET (not cut again!) 2025 EBITDA guidance
- 💪 Short squeeze as 15%+ short interest gets squeezed by activist news
- 📈 Break above $20 gamma resistance triggers technical rally to $21-23

Key metrics needed:
- Credible M&A interest or asset sale at attractive prices
- No more EBITDA guidance cuts (maintain that $860-910M range minimum)
- Season pass renewal rates improving sequentially
- Activist pressure intensifying with board seat demands

Put P&L in Bull Case:
- Stock at $23 on Dec 19: Puts worth $0 (out-of-money), loss = -$4.85/share × 7,500 = -$3.64M (100% loss)
- Stock at $22.00 on Dec 19: Puts worth $0.50, loss = -$4.35/share × 7,500 = -$3.26M (90% loss)
- Stock at $21.00 on Dec 19: Puts worth $1.50, loss = -$3.35/share × 7,500 = -$2.51M (69% loss)

Probability assessment: 30% because it requires external catalyst (activist deal, takeover bid) to overcome the fundamental execution problems. Five activist funds with combined 25%+ ownership make strategic action more likely than normal. But activists typically take 6-12 months to force change, and these puts expire in 42 days.

🎯 Base Case (50% probability)

Target: $17-20 range (CHOPPY HELL)

Most likely scenario:
- ⚖️ Stock consolidates in post-earnings purgatory between $17.50 support and $20 resistance
- 📰 Activist noise continues but no concrete deal emerges in next 42 days
- 💤 Holiday season attendance "fine but not great" - meets low expectations
- 🔄 Market digests Q3 disappointment, waits for Q4 earnings February 27
- 📊 No major positive or negative catalysts materialize before December 19 expiration
- 🎢 Occasional 5-8% intraday swings on activist headlines but no sustained breakout
- 💰 Implied volatility stays elevated (50-60%) due to ongoing uncertainty

Put P&L in Base Case:
- Stock at $19.50 on Dec 19: Puts worth $3.00, loss = -$1.85/share × 7,500 = -$1.39M (38% loss)
- Stock at $18.60 on Dec 19: Puts worth $3.90, loss = -$0.95/share × 7,500 = -$712K (20% loss)
- Stock at $17.50 on Dec 19: Puts worth $5.00, profit = +$0.15/share × 7,500 = +$112K (3% gain)

Why 50% probability: Stock at technical inflection point with strong overhead resistance at $20 but weak support below $17.50. Fundamentals suggest further downside but activist involvement creates squeeze risk. Most likely trades sideways with high volatility.

Put buyer's expected outcome: Even if puts expire with partial loss, they successfully protected against 20-30% squeeze to $22-25 that would have devastated their short position. Insurance policies aren't meant to profit - they're meant to limit catastrophic loss.

📉 Bear Case (20% probability)

Target: $14-17 (BREAK SUPPORT!)

What could go wrong:
- 😰 Early Q4 attendance data leaks showing another disappointing quarter
- 🚨 Company pre-announces ANOTHER EBITDA guidance cut (third time in 2025!)
- 💸 Asset sale process yields disappointing valuations or no buyers emerge
- 🇺🇸 Consumer spending weakness intensifies heading into holidays
- ⚖️ Activist campaign stalls as board resists changes
- 📊 Analyst downgrades pile on after Q3 disappointment (Goldman, Morgan Stanley already cut targets)
- 💰 Debt concerns escalate - credit rating agencies threaten downgrade on $5.3B debt load
- 🔨 Break below $17.50 gamma support triggers cascade to $15

Critical support levels:
- 🛡️ $17.50: Immediate gamma floor (1.06B) - MUST HOLD or accelerates lower
- 🛡️ $15.00: Deep support (93M gamma) - disaster scenario
- 🛡️ $12-13: Analyst low-end targets if thesis completely breaks

Put P&L in Bear Case:
- Stock at $16.00 on Dec 19: Puts worth $6.50, profit = +$1.65/share × 7,500 = +$1.24M (34% ROI)
- Stock at $15.00 on Dec 19: Puts worth $7.50, profit = +$2.65/share × 7,500 = +$1.99M (55% ROI)
- Stock at $14.00 on Dec 19: Puts worth $8.50, profit = +$3.65/share × 7,500 = +$2.74M (76% ROI!)

Probability assessment: Only 20% because requires multiple negative catalysts in next 42 days. Stock already down 58% from merger high - much of bad news priced in. Activist involvement provides natural floor as funds won't let it collapse without forcing strategic action. But if Q4 trends are truly awful, $15 is very achievable.

Important note: This put trade is likely a HEDGE, not a directional bet. If trader is short at $25-30, they're massively profitable even if puts expire worthless. The puts just prevent a short squeeze from $18 to $25+ from destroying their gains.

💡 Trading Ideas

🛡️ Conservative: Stay Away - Too Much Uncertainty

Play: Avoid FUN entirely until situation clarifies after Q4 earnings February 27, 2025

Why this works:
- ⚠️ Broken execution: Company has cut EBITDA guidance twice in 2025 - credibility destroyed
- 💸 Debt burden: $5.3B debt with leverage ratio >5.25x limits strategic flexibility
- 🎲 Activist wild card: Five different funds with different agendas creates chaos, not clarity
- 📊 No technical setup: Stuck between $17.50 and $20 in no-man's land
- 💰 Better opportunities elsewhere: Why fight this mess when there are cleaner setups?
- 🤔 Unknown knowns: Merger integration, consumer spending, weather, activist timelines all uncertain

Action plan:
- 👀 Watch from sidelines through December 19 (put expiration) and into Q4 earnings
- 🎯 Only consider if stock breaks decisively above $20 (activist deal likely) or below $15 (capitulation buying opportunity)
- ✅ Need to see: EBITDA guidance NOT cut again, asset sale at good prices, or credible takeover bid
- 📊 Monitor unusual options activity - if more big hedge trades appear, follow the smart money
- ⏰ Revisit spring 2025 when new attractions open and summer season provides fresh data

Risk level: Zero (cash position) | Skill level: Beginner-friendly

Expected outcome: Avoid a 20-40% loss if bear case plays out OR miss a 20-30% activist-driven spike if bull case hits. With 50% odds of choppy hell, better to sit this one out. Don't try to catch falling knives at theme parks with $5.3B debt!

⚖️ Balanced: Small Bear Put Spread IF Support Breaks

Play: Wait for $17.50 support to break, THEN sell put spread betting on bounce off $15

Structure: If FUN breaks below $17.50, buy $17.50 puts / sell $15.00 puts (December 19 expiration - same as the big trade)

Why this works:
- 📊 Defined risk spread ($2.50 wide = $250 max risk per spread)
- 🎯 Targets the empty gamma zone between $17.50 and $15.00 where momentum trades flush
- 🤝 Betting on $15 level providing psychological/technical support (round number + analyst targets)
- ⏰ 42 days to expiration gives time for flush-and-bounce pattern to play out
- 🛡️ Sell-off toward $15 would likely bring bargain hunters and activist buyers

Estimated P&L (adjust for actual prices when $17.50 breaks):
- 💰 Expect to pay ~$1.00-1.25 net debit per spread when FUN at $17.00
- 📈 Max profit: $1.25-1.50 if FUN below $15 at December expiration (100-120% ROI)
- 📉 Max loss: $1.00-1.25 if FUN above $17.50 (100% loss, but defined)
- 🎯 Breakeven: ~$16.25-16.50

Entry requirements (ALL must be met):
- ⏰ FUN closes below $17.50 on rising volume (confirmed breakdown)
- 🎯 RSI oversold (<30) suggesting flush is overdone short-term
- 📊 No major negative news (surprise bankruptcy fears, credit rating cut to junk, etc.)
- ❌ Don't enter if already at $16 or lower (spread too close to target)

Position sizing: Risk only 1-2% of portfolio (this is a pure technical speculation)

Exit rules:
- 📈 Take 50%+ profits if FUN bounces back above $16.50 quickly
- 🛑 Cut loss if breaks $14.50 (thesis invalidated, no support at $15)

Risk level: Moderate (defined risk, bearish directional) | Skill level: Intermediate

Success probability: ~40-45% - Requires precise timing and technical breakdown, but if $17.50 breaks with momentum, good odds of reaching $15-16 zone before bounce.

🚀 Aggressive: Copy The Hedge Trade - Synthetic Short via Put Calendar Spread (ADVANCED!)

Play: Replicate the sophisticated trader's positioning - hedge a short position with out-of-money put calendar

Structure:
1. Short 100 shares of FUN at current $18.60 (need margin account, $1,860 capital + margin)
2. Buy 1x December 19 $22.50 put (~$4.85, $485 cost)
3. Sell 1x November 21 $20.00 put (~$2.00, $200 credit)
4. Net position: Short stock, long expensive put, short near-term put = "synthetic covered put"

Why this could work (for experienced traders ONLY):
- 📉 Profit from continued downside: Short stock profits $1 for every $1 FUN drops
- 🛡️ Protection against activist squeeze: If FUN spikes to $22-25 on deal news, the $22.50 long put caps losses at $22.50
- 💰 Generate income: Short $20 put collects premium, expires November 21 (before long put expires December 19)
- 🎯 Betting on range-bound action: Collect $20 put premium if FUN stays below $20 by Nov 21, while protected above $22.50
- ⚖️ Asymmetric risk/reward: Downside unlimited profit potential (until $0), upside risk capped at $22.50

Estimated P&L scenarios:
- 🚀 Stock at $14: Short profit = $4.60/share, $22.50 put worth $8.50, $20 put expires worthless → Total profit ~$12.25/share = $1,225 per unit (427% ROI!)
- ⚖️ Stock at $18: Short profit = $0.60/share, $22.50 put worth $4.50, $20 put expires worthless → Total profit ~$2.35/share = $235 per unit (82% ROI)
- 😰 Stock at $23 (DISASTER): Short loss = -$4.40/share, $22.50 put worth $0, $20 put -$3 loss → Max loss ~$4.55/share = -$455 per unit (159% loss)
- 💀 Stock at $25: Short loss = -$6.40/share, $22.50 put worth $0, $20 put -$5 loss → Loss ~$8.55/share = -$855 per unit (299% loss!)

Breakeven points:
- 📈 Upside breakeven: ~$22.35 (long put kicks in to protect short)
- 📉 Downside breakeven: ~$17.75 (need $0.85+ move down to cover net debit)

MASSIVE RISK WARNING - DO NOT attempt unless you:
- ✅ Have margin account with $5,000+ cushion for short stock maintenance requirements
- ✅ Understand shorting mechanics - you pay dividends, borrow costs, and have unlimited loss potential
- ✅ Have traded short stock before and can stomach 20-30% adverse moves
- ✅ Can monitor position DAILY and adjust if situation changes
- ✅ Understand activist campaigns can move stocks 40-50% in HOURS on takeover news
- ✅ Accept that short squeeze to $25-30 could blow up entire position despite "protection"
- ⏰ Have plan to roll or close short put at November 21 expiration
- 💰 Can afford to lose $1,000+ per unit if activist M&A deal announced

Why this is so dangerous:
1. Short squeeze risk: Five activist funds could force a deal TOMORROW at $35-40/share (100% above current)
2. Margin calls: If FUN spikes 30-40%, broker may force you to close at worst possible time
3. Gap risk: Stock could gap up 50% overnight on buyout news, blowing through your $22.50 put protection
4. Two-way risk: If FUN drops to $15, your short $20 put gets assigned, doubling your exposure
5. Complexity: Managing three separate positions (short stock, long put, short put) in volatile stock

Risk level: EXTREME (unlimited loss potential on short stock) | Skill level: Professional only

Probability of profit: ~35-40% (lower than you think due to activist wild card)

Alternative for 90% of readers: Just buy a simple bear put spread at $20/$17.50 if you're bearish. Don't mess with short stock unless you're a pro.

⚠️ Risk Factors

Don't get caught by these landmines:

🎯 The Bottom Line

Real talk: Someone just spent $3.6 MILLION on unusual put protection at a strike price 21% ABOVE where FUN is trading today. This isn't a simple bearish bet - this is sophisticated risk management by a trader with a big short position who's terrified of an activist-driven short squeeze.

What this trade tells us:

  • 🎯 Shorts are worried: Despite stock down 58%, short sellers aren't confident in their positions anymore
  • 💰 Professional traders see five activist funds with 25%+ ownership as real takeover/squeeze risk
  • ⚖️ The $22.50 strike says "I think we stay below $20-21, but I'll pay $4.85 for protection against a spike to $22-25"
  • ⏰ 42-day expiration captures near-term activist news flow risk before Q4 earnings Feb 27
  • 📊 This is NOT a "FUN going bankrupt" bet - it's a "protect my profitable short against wild card activists" hedge

This trade is a WARNING SIGN for both bulls AND bears:

If you're bullish on FUN:
- ❌ Don't buy the dip yet - smart money is hedging short positions, not going long
- ⏰ Wait for Q4 earnings Feb 27, 2025 or concrete activist deal announcement
- 🎯 If you MUST play, only enter above $20 on confirmed breakout (activist deal confirmed)
- 🛡️ Set TIGHT stops at $17.50 - if support breaks, this goes to $15 fast
- 📊 Current $18-20 range is no-man's land - choppy hell with no edge

If you're bearish on FUN:
- ⚠️ Be careful shorting here - this put buyer is HEDGING a short, telling you squeeze risk is REAL
- 🚨 Activist M&A announcement could gap stock 30-50% overnight, blowing up short positions
- 🎯 Better to wait for bounce toward $20-21, THEN short with tight risk above $22
- 📉 Or play via put spreads with defined risk rather than naked short stock
- ⏰ Timing is EVERYTHING - these puts expire Dec 19, suggesting short-term squeeze worry only

If you're sitting on the sidelines (SMARTEST MOVE):
- ✅ This is the right play! FUN is a broken stock with massive uncertainty
- 📊 Merger execution failing (EBITDA guidance cut 20% in 2025), debt burden crushing ($5.3B with 5.25x+ leverage), activist outcome unknown
- 🎲 This is a COIN FLIP - either activists force a deal and stock rips to $25-30, OR execution deteriorates and it drops to $12-15
- 💰 There are WAY better risk/reward opportunities than trying to catch this falling knife
- ⏰ Check back after Q4 earnings Feb 27, 2025 when picture clears

Mark your calendar - Key dates:
- 📅 November 21 - Monthly OPEX (±11% implied move range $16.29-$20.32)
- 📅 December 19 - Quarterly triple witch, expiration of this $3.6M put trade
- 📅 February 27, 2025 - Q4 2024 & full-year earnings, 2025 guidance update - THE BIG ONE!
- 📅 Q1-Q2 2025 - Portfolio optimization results (asset sale announcements likely)
- 📅 April-May 2025 - Seven new roller coasters open across parks
- 📅 July-August 2025 - Peak summer season reveals if new pricing strategy works

Final verdict: FUN is caught between two competing narratives:

Bull case: Five activist funds force strategic alternatives, company gets sold at $30-35/share (~75% upside), or successful asset sales deleverage balance sheet and new attractions drive 2025 attendance recovery. Jana Partners + Travis Kelce bring publicity and pressure that could force board's hand.

Bear case: Merger was a mistake, per-capita spending continues declining, $5.3B debt burden becomes untenable, company forced to sell parks at distressed valuations, equity goes to $10-12. Regional park model is structurally challenged vs Disney/Universal.

The $3.6M put trade reveals the truth: Even bears who've made HUGE money shorting from $40 to $18 are scared of activist wild cards!

Our take: AVOID until one narrative wins. This is a speculation, not an investment.

If activists force a deal, you'll have plenty of time to buy AFTER announcement at $25-28 with takeout at $32-35 (10-15% arb spread). If bear case plays out, you can buy the crash at $12-15 with much better risk/reward. Don't try to be a hero in the $17-21 chop zone. Patience wins here. 💪

Disclaimer: Options trading involves substantial risk of loss and is not suitable for all investors. Short selling has unlimited loss potential and requires margin approval. This analysis is for educational purposes only and not financial advice. The unusual put trade reflects one sophisticated trader's positioning and does NOT constitute a recommendation to follow their trade. Activist situations are highly unpredictable and can move 30-50% in hours. Always do your own research and consider consulting a licensed financial advisor before trading. The 555x unusual size score reflects this trade's size relative to typical FUN flow - it does not predict profitability.

About Six Flags Entertainment Corporation: Six Flags Entertainment Corp is North America's largest regional amusement resort operator with approximately 27 amusement parks, around 15 separately gated water parks, and nine resort properties across multiple regions, with a market cap of $1.86 billion in the Services - Amusement & Recreation Services industry.

References

[^1]: Yahoo Finance, "Six Flags Entertainment Corporation (FUN) Stock Price, News, Quote & History", November 7, 2024, https://finance.yahoo.com/quote/FUN/

[^2]: BusinessWire, "Cedar Fair and Six Flags Merger of Equals Successfully Completed, Creating a Leading Amusement Park Operator", July 1, 2024, https://www.businesswire.com/news/home/20240701181300/en/Cedar-Fair-and-Six-Flags-Merger-of-Equals-Successfully-Completed-Creating-a-Leading-Amusement-Park-Operator

[^5]: CNBC, "Travis Kelce joins activist investor Jana Partners in push to revive Six Flags", October 21, 2025, https://www.cnbc.com/2025/10/21/travis-kelce-joins-activist-investor-jana-partners-in-push-to-revive-six-flags.html

[^7]: Insider Monkey, "Six Flags Entertainment Corporation (NYSE:FUN) Q1 2025 Earnings Call Transcript", 2025, https://www.insidermonkey.com/blog/six-flags-entertainment-corporation-nysefun-q1-2025-earnings-call-transcript-1530214/

[^8]: MergerSight, "Six Flags and Cedar Fair's $8 Billion Merger", 2024, https://www.mergersight.com/post/six-flags-and-cedar-fair-s-8-billion-merger

[^9]: Six Flags Entertainment Corporation, "Third Quarter 2024 Earnings Release", November 6, 2024, https://s204.q4cdn.com/155295784/files/doc_financials/2024/q3/q3/Six-Flags-Release-Nov-6-2024.pdf

[^10]: Insider Monkey, "Six Flags Entertainment Corporation (NYSE:FUN) Q3 2024 Earnings Call Transcript", November 2024, https://www.insidermonkey.com/blog/six-flags-entertainment-corporation-nysefun-q3-2024-earnings-call-transcript-1387340/

[^11]: Theme Park Insider, "Six Flags sets new long-term financial goals", November 2024, https://www.themeparkinsider.com/flume/202411/10552/

[^12]: Chron, "Six Flags plans to review parks, leading to confusion over closures", November 2024, https://www.chron.com/culture/article/six-flags-parks-closing-19900136.php

[^14]: Bloomberg, "Jana Partners Builds Stake in Six Flags Along With Travis Kelce", October 21, 2025, https://www.bloomberg.com/news/articles/2025-10-21/jana-partners-builds-stake-in-six-flags-along-with-travis-kelce

[^15]: Yahoo Finance, "Six Flags stock soars 17% after Travis Kelce joins activist campaign with hedge fund Jana Partners", October 2025, https://finance.yahoo.com/news/six-flags-stock-soars-17-after-travis-kelce-joins-activist-campaign-with-hedge-fund-jana-partners-200158514.html

[^17]: Six Flags America, "New Season Pass Offerings for 2025!", 2024, https://www.sixflags.com/america/the-all-park-passport-will-soon-take-you-further-11

[^18]: Guide to Six Flags Over Texas, "How the Six Flags/Cedar Fair Merger Impacts Admission Options", 2024, https://guidetosfot.com/how-the-six-flags-cedar-fair-merger-impacts-admission-options/

[^19]: Mordor Intelligence, "US Amusement and Theme Park Market Size, Share & Industry Research Report - 2030", 2024, https://www.mordorintelligence.com/industry-reports/united-states-amusement-and-theme-park-industry

[^21]: BusinessWire, "Six Flags Entertainment Corporation Reports 2024 Fourth Quarter Results; Provides Adjusted EBITDA Guidance for 2025", February 27, 2025, https://www.businesswire.com/news/home/20250227928301/en/Six-Flags-Entertainment-Corporation-Reports-2024-Fourth-Quarter-Results-Provides-Adjusted-EBITDA-Guidance-for-2025

[^22]: BusinessWire, "Six Flags Entertainment Corporation Reports 2025 Second Quarter Results, Provides July Performance Update, and Updates Full-Year Guidance", August 4, 2025, https://www.businesswire.com/news/home/20250804828767/en/Six-Flags-Entertainment-Corporation-Reports-2025-Second-Quarter-Results-Provides-July-Performance-Update-and-Updates-Full-Year-Guidance

[^23]: GuruFocus, "Six Flags (FUN) Adjusts FY25 EBITDA Outlook Downward", 2025, https://www.gurufocus.com/news/3194783/six-flags-fun-adjusts-fy25-ebitda-outlook-downward

[^24]: BusinessWire, "Six Flags to Invest More Than $1 Billion Over the Next Two Years to Enhance Guest Experience", November 14, 2024, https://www.businesswire.com/news/home/20241114984167/en/Six-Flags-to-Invest-More-Than-$1-Billion-Over-the-Next-Two-Years-to-Enhance-Guest-Experience

[^25]: BusinessWire, "Six Flags Unveils Exciting Lineup of Park Investments for 2025", August 15, 2024, https://www.businesswire.com/news/home/20240815328114/en/Six-Flags-Unveils-Exciting-Lineup-of-Park-Investments-for-2025

[^27]: Business North Carolina, "Six Flags aims to boost its theme parks' performance", 2024, https://businessnc.com/six-flags-aims-to-boost-its-theme-parks-performance/

[^28]: StreetInsider, "Six Flags (NYSE: FUN) Soars as Activist Investors Demand Sweeping Changes and Real Estate Monetization", October 21, 2025, https://markets.financialcontent.com/streetinsider/article/marketminute-2025-10-21-six-flags-nyse-fun-soars-as-activist-investors-demand-sweeping-changes-and-real-estate-monetization

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