Options Alert: Call Buyers Are Piling Into This Recent Tech IPO

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Roblox was a prominent IPO in the spring. Now, after a rally and pullback, the bulls seem to be returning.

Options traders purchased about 12,000 short-term 13-August 85 calls this morning. Premiums started at $0.40 and quickly shot above $2 as the orders piled in. They peaked at $3.24 shortly before noon. Volume was more than triple open interest, which indicates new money was put to work.

Other contracts were also active:

  • Call buyers amassed more than 6,000 13-August 90 calls, mostly for $0.21 to $1.25.
  • About 5,000 27-August 100 calls traded. Buyers paid $1.92 and $2.32 for the largest blocks.

Calls fix the price where investors can buy a stock. They can appreciate rapidly when shares move higher but also expire worthless if a rally doesn’t occur.

Roblox (RBLX), daily chart, with call volume and 50-day moving average.

Today’s transactions follow bullish activity last week, with TradeStation data showing call volume near a two-month high.

RBLX rose 8.44 percent to $84.50 in afternoon trading. The provider of virtual-reality software went public in March for $45 and immediately shot above $60. It sat in that range until May, when analysts praised its strong quarterly bookings. The stock rallied to $100 by early June, then pulled back amid worries about its growth.

Two potential catalysts may now be helping to revive interest in the stock. First, recent initial public offerings have outperformed following Robinhood’s (HOOD) prominent listing. Second, RBLX reports quarterly results next Monday, August 16, after the closing bell.

Overall option volume today is twice the average in the past month. Calls outnumber puts by more than 3-to-1.

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