Crypto Exchange Acquisition Boosts Robinhood Stock

Options bulls are blasting HOOD today

Digital Content Manager
Jun 6, 2024 at 10:33 AM
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Robinhood Markets Inc (NASDAQ:HOOD) stock was last seen up 5.9% to trade at $22.84, after the financial services company announced it will further its cryptocurrency expansion across the globe with the acquisition of exchange Bitstamp for roughly $200 million in cash.

Robinhood Markets stock earlier hit a more than two-year high of $22.95, with support stemming from the 20-day moving average. The shares are 75.9% higher in 2024 and 138.3% over the past 12 months, and last week broke through a ceiling at the $21 region that capped a late March rally.

Options bulls are enjoying the buyout news. So far today, 82,000 calls have swapped hands -- double the intraday average volume -- compared to just 12,000 puts. Most popular is the weekly 6/7 23-strike call, where investors are opening new positions. In other words, they expect additional upside for HOOD by the close tomorrow, when these contracts expire.

This denotes a stark shift in sentiment, as short-term options traders have been much more bearish than usual. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.57, which in the 92nd percentile of annual readings.

It's also worth noting the stock's Schaeffer's Volatility Scorecard (SVS) sits at an 87 out of 100. This means HOOD exceeded option traders' volatility expectations over the last 12 months.


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