As one of the biggest market winners last Friday, blockchain mining specialist Cipher Mining (CIFR) easily ranked among the top highlights in Barchart’s screener for unusual stock options volume. A list of intriguing derivative market trades, it’s always worthwhile to check the unusual options indicator to understand what the smart money could be buying or selling.

Following Friday’s closing bell, total contract volume for CIFR stock options stood at 96,314 against an open interest reading of 236,882. This result represented a 404.47% increase over the trailing one-month average metric, demonstrating significant demand. Further, call volume pipped put volume, 52,250 contracts compared to 44,064.

On paper, the above pairing yielded a put/call volume ratio of 0.84. Based on Friday’s options flow — which focuses exclusively on big block transactions likely placed by institutional investors — the ratio could be read intuitively, meaning positively. That’s because net trade sentiment stood at $469,500, overwhelmingly favoring bullish investors.

So, does that mean CIFR stock is a buy? It seems that way at a cursory glance.

Primarily, the fundamentals appear positive because of a $50 million investment from SoftBank (SFTBY), one of the world’s most prominent investment holding companies. Per a press release, the “PIPE investment will support Cipher’s HPC data center development business and establish SoftBank as a significant primary investor in Cipher.”

Combined with other catalysts such as the Trump administration’s vocal support for cryptos, it’s easy to come away with the idea that CIFR stock is a no-brainer investment. Still, prospective investors will want to observe the empirical data before making a decision.

Statistical Trends for CIFR Stock Suggest It’s a Volatility Hedge

As tempting as betting on CIFR stock may be, the statistical backdrop for Cipher’s price action don’t offer much confidence. Against a purely stochastic framework — that is, devoid of any other context aside from the temporal — CIFR carries a decidedly negative bias.

On a week-to-week basis, the chances that a position entered at the start of the period will be positive by the end of it is only 43.98%. That’s noticeably worse than a coin toss. Interestingly, over a four-week period, the odds improve to 50.45%. Magnitude wise, that’s quite a remarkable shift. However, from a win-loss perspective, neither bulls nor bears intent on trading CIFR over a month-long period have an apparent edge.

Of course, human emotions operate the market — and price action isn’t just dependent on purely temporal concerns. In other words, abnormally greedy or fearful activity in the market can prompt a more heightened response. This appears to be the case with Cipher Mining.

On Friday, CIFR stock gained just under 22%. However, for the week, the performance was 5.52%, which is still very decent compared to the equity’s average weekly return of 0.58%. During times when CIFR posts a weekly return between 5% and 10%, the fourth subsequent week sees a positive return 47.06% of the time.

Under a dynamic interpretation of the data, the probability of success declines following robust weekly bullishness. At the same time, the bears don’t really have much of an edge, either. If pessimists wanted to take a directional wager, the best chance would be in the first week following a one-week return between 5% and 10%.

From the second week onward, the odds one way or the other are within a few percentage points of a coin toss. That’s not great for a directional wager but could be intriguing as a volatility hedge or specifically a long iron condor.

Plotting the Most Rational Options Strategies

Looking at CIFR stock objectively under the dynamic lens of what occurred last week, traders have two potentially rational strategies to consider.

First, for the current week, statistical trends regarding the negative scenario calls for a risk target of $4.91 by this coming Friday (Feb. 7). Speculators could be relatively conservative and target the 5.50/5.00 bear put spread, with the intention of CIFR stock dropping to or below $5. Should that happen by expiration, traders would be eligible to pick up the maximum payout, which at time of writing was 163.16%.

Second, I would look at advantaging the tendency of CIFR stock to see its volatility curve expand in the second subsequent week from the anchor event. Market intelligence points to the possibility of CIFR rising to $7.06 or falling to $4.64. It’s a stretch but ultra-aggressive traders may consider the 5.00P | 5.50P || 7.00C | 7.50C long iron condor for the options chain expiring Feb. 14.