Unusual Options Activity: Opendoor Technologies (OPEN)

Real estate platform company Opendoor Technologies (OPEN) has been trending down since February. However, one trader sees the potential for a rebound in the next year and change.

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  • That’s based on the January 2023 $23 calls. With 508 days until expiration, over 35,013 contracts changed hands, a 71-fold jump in volume from the prior open interest near 490 contracts. The buyer of the calls paid about $3.60 to make the buy.

    Shares would need to move about 37 percent higher from their current price for the trade to move in-the-money.

    Opendoor went public via a SPAC offering in December 2020. SPAC-related stocks saw a big jump at the start of the year and have been selling off ever since. Shares are now down more than half from their 52-week high near $40.

    Despite the recent poor performance, shares are up 63 percent over the past year. The company is still in its early stages and remains unprofitable, but revenue and earnings growth points towards a fast growth name in a company making a name for itself.

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  • Action to take: Shares could certainly rebound here, although investors may want to look for a reversal trend before buying shares.

    The January 2023 calls are an attractive trade, as shares could easily rebound to new highs in the span of over a year. As with buying shares, traders would be best to wait for the price trend to reverse upwards. The options may be cheaper at that point than the current price of $3.60.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may make a trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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