Social media site
Reddit (RDDT) has been on a tear, with shares soaring 275% over the past year. One trader sees further upside over the next two years.
That’s based on the January 2027 $270 calls. With 758 days until expiration, 10,002 contracts traded compared to a prior open interest of 163, for a 61-fold rise in volume on the trade. The buyer of the calls paid $48.20 to make the bullish bet.
Reddit shares recently traded for about $178. Shares would need to rise by 51.7% over the next two years, or by $92, for the option to move in-the-money. Reddit currently trades right at its all-time high of $180.74.
The social media site has been one of the more successful IPOs in recent years, and the company is moving towards profitability. Reddit saw revenues soar 68% over the past year, and the company still has a cash-rich balance sheet of about $1.7 billion in net cash.
Action to take: Momentum investors may like shares here as they keep trending higher. Once Reddit can turn a profit, more investor interest could send shares even higher.
For traders, the January 2027 $270 calls have a strong chance of moving in-the-money, given how much time they have to play out. More aggressive traders may want to use a shorter timeframe to take advantage of the current uptrend in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
