Why Options Traders Are Speculating on this Crypto Stock

Short interest accounts for nearly 17% of the stock's available float

Deputy Editor
Nov 1, 2021 at 1:40 PM
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Thanks to Bitcoin's (BTC) recent rally to record highs, there's been a surge of interest in crypto-adjacent stocks like Marathon Digital Holdings Inc (NASDAQ:MARA) of late. MARA was last seen up 8.9% to trade at $56.89, and earlier soared to $57.79 -- its highest level in over six years. A relatively recent pullback was saved by the $30 area, as well as long-term support at the 200-day moving average. Fresh off of its best month since January, Marathon Digital stock has added 445% in 2021, and an incredible 2,535% year-over-year. 

MARA Chart November 1

Even better, MARA has cemented a spot on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the past two weeks. According to White's data, 509,701 calls and 271,295 puts were exchanged over this two-week period, with the most popular contract during this time period being the weekly 10/22 55-strike call.

MAO Chart Nov 1

Those looking to join these buyers can do so at a steal right now. Marathon Digital stock's Schaeffer's Volatility Index (SVI) of 109% sits higher than just 12% of readings from the past 12 months, suggesting options players are pricing in low volatility expectations for the stock at the moment. Plus, the security's Schaeffer's Volatility Scorecard (SVS) comes in at 97 (out of 100). In other words, MARA has exceeded options traders' volatility expectations in the last year.

The equity is still heavily shorted, too, and the 15.24 million shares sold short make up nearly 17% of the stock's available float.


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