Crypto Stock Delivered 325% Profit to Options Bulls

Multiple support levels were in place at the time of our recommendation

Digital Content Manager
Dec 5, 2023 at 12:55 PM
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Schaeffer's Event subscribers scored a 325% profit with our Riot Platforms Inc (NASDAQ:RIOT) weekly 12/8 11-strike call recommendation in just two weeks. Let's dive deeper into the telltale signs of this winning trade below, and unpack how it all came together.

At the time of our recommendation on Nov. 20, Riot Platforms stock was rallying back above its 200-day moving average. Shares had also found support at their +200% year-to-date level, 320-day trendline, $2 billion market cap level, and $10 mark. Plus, the Wells Fargo Technology, Media, and Telecommunications (TMT) Summit was set for Nov. 30.

The security's 10-day call/put ratio at that time also sat at 4.58 back at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The last time this ratio had peaked over 4.00 coincided with a major rally for the shares in June.

Options were affordably priced, too. The equity's Schaeffer's Volatility Index (SVI) of 89% ranked in the 13th percentile of its annual range, suggesting options traders were pricing in lower volatility expectations than usual.

It's also worth noting that short interest had risen more than 60% since May, and made up 19% of RIOT's available float. This left the security wide open to the possibility of a short squeeze.
 
Riot Platforms stock conquered the $13 level on Nov. 1, immediately after the Wells Fargo TMT Summit. Shares are today up 5.5% at $15.83 at last check -- their highest level since August -- and on track for a third-straight daily win, but resistance seems to be emerging at the $16 region. Our subscribers exited their positions in the previous session, however, walking away with more than four times their investment. 

 

RIOT Intraday

 

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