Unusual Options Activity: Roblox (RBLX)

Metaverse gaming company Roblox (RBLX) has been a solid performer, with shares up 26 percent over the past year. One trader is betting on shares giving up some of their gains in the coming weeks.

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  • That’s based on the June 30 $36 puts. With 21 days until expiration, 3,063 contracts traded compared to a prior open interest of 127, for a 24-fold rise in volume on the trade. The buyer of the puts paid $0.79 to make the bearish bet.

    Shares recently traded for just under $39, so the stock would need to drop by $3, or just over 8 percent, for the options to move in-the-money.

    Roblox is up about 45 percent off of its December lows, and shares are volatile on a daily basis, so such a move is possible.

    Action to take: While revenues are up 22 percent over the past year, the company remains deeply unprofitable. It may be prudent for shareholders to take some profits by selling now, and for those interested to wait for a drop to the low $30 range to buy.

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  • For traders, the June puts could deliver mid-double-digit gains in the coming weeks. Given how volatile shares are, they could even move in-the-money and perform even better. But traders may want to use a big down day to take a quick profit on the short side.

     

    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 of the companies mentioned in this article.