Options Traders Dig This Bitcoin Miner

The equity could still benefit from a short squeeze

Deputy Editor
Nov 16, 2021 at 1:56 PM
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Bitcoin (BTC) miner Riot Blockchain Inc (NASDAQ:RIOT) is struggling today, last seen down 7.6% to trade at $38.05, after missing third-quarter top- and bottom-line estimates. The equity has enjoyed a fantastic 2021 up until now, adding roughly 129% year-to-date. And while it's currently trading at less than half its Feb. 17, all-time high of $79.50, larger pullbacks have been saved by a long-term floor at the $24 level, and more recently by the 320-day moving average.

RIOT Chart 2 Nov 16

Wart's more, Riot Blockchain stock has managed to nab a spot on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume over the last two weeks, with new names to the list highlighted in yellow. According to White's data, 595,460 calls and 175,226 puts were exchanged during this two-week period. The most popular contract in that time frame was the weekly 11/05 36-strike call.

MAO Chart Nov 16

Going back, calls have been the popular choice for the past 10 weeks. This is per the security's 50-day call/put volume ratio of 4.55 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 85% readings from the past year.

Though shorts have been jumping ship, with short interest down 8.2% in the most recent reporting period, the 15.93 million shares sold short interest still account for 19.9% of the stock's available float. In other words, the equity could still benefit from a short squeeze.

It is also worth noting the security has exceeded options traders' volatility expectations in the past year, per RIOT's Schaeffer's Volatility Scorecard (SVS), which sits at 81 out of a possible 100.


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