• Sharp Paper Insiders

Somebody clearly knows something about PagSeguro Digital. Let’s watch it and see if we can profit too.

When it comes to stocks that you track on a daily basis, PagSeguro Digital (NYSE: PAGS) most certainly isn’t one of them. Headquartered in São Paulo, Brazil, it’s a software infrastructure company that offers payment and financial technology services for merchants and small- to medium-sized businesses.

The stock has been rather volatile lately – starting in mid-June when the company announced a $965 million follow-on offering priced at $29. Shares started the month of June around $36 and are currently trading down around $27.30.

So why bring this to your attention?

Because someone has established a major PagSeguro position – and it’s too massive to ignore.

Looking specifically at the August 30 line, you’ll find that 24,289 contracts are currently being held in open interest. Assuming a price of $1.24 per contract, that means someone (or a group of speculators) is collectively betting more than $3 million that PagSeguro will trade above $31.24 per share by the third week of August. Will PagSeguro gain 14% in the next month for this speculation to pay off? Who knows – but it’s certainly worth tracking. For $3 million, somebody out there might know something that we don’t.