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Options traders get bullish, bet it can't get any worse for Uber and Lyft

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Options Action: Huge action in Lyft and Uber
Options Action: Huge action in Lyft and Uber

Major ride-hailing stocks Uber and Lyft are still reeling after two very disappointing sets of quarterly results. Wednesday's bearish stock action — particularly Lyft's nearly 30% plunge — provoked an opposite response from options traders, many of whom seem to be betting that it quite literally can't get any worse for these names.

Lyft's call options traded at a whopping 12 times their average daily volume Wednesday, while Uber's surged to four times their average daily volume, with many traders betting on double-digit percentage rallies in the near future.

Massive trades in each of these companies stood out among the rest.

"One of the trades that caught my eye was the purchase of the May 13 weekly 23-strike calls. Those were extremely active, and that included some institutional purchases, including one of just under 5,200 contracts for about 77 cents per contract," said Michael Khouw, chief investment officer at Optimize Advisors, regarding the action in Lyft on Wednesday on CNBC's "Fast Money."

That trade equates to a $400,000 bet that Lyft will rally at least 16.5% higher from Wednesday's close by just next Friday, a move that would require a major upswing in a volatile market in which the name has not fared well.

"In Uber, the situation was a little bit different," said Khouw. "So here, the trade that caught my eye was the purchase of 2,500 of the June 40/50 call spreads. Those traded for $1.23. Ultimately, 10,000 of those traded by the end of the day.

"That is well out of the money. In fact, Uber would need to rise at least 50% for that trader just to break even, and the higher strike call they sold is 80% out of the money. It is possible that a trade like that could be used as a partial hedge against a short position, but either way, it indicates some assessment that there is a possibility that the stock somehow rebounds."

Uber was trading about 6% lower in Thursday's session, while Lyft was down around 1%.