Reddit stock pops on increased options activity
Shares of Reddit (RDDT) are climbing during Tuesday morning's pre-market trading — and well into the market open — building upon the momentum from Monday when the social media platform's stock surged 30% higher. This rally has been fueled by heightened options activity by traders this week.
Yahoo Finance's Jared Blikre breaks down the details.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Angel Smith
Video Transcript
BRAD SMITH: We're tracking shares of RDDT. Reddit shares continuing their climb in pre-market trading after closing up 30% on Monday. Analysts saying a flurry of bullish bets from options traders could be pushing the stock higher. Joining us now on this over at the Wi-Fi interactive, we've got our very own Jared Blikre. Hey, Jared.
JARED BLIKRE: Hey, Brad. Thank you. And yesterday was the first day of options trading. It now happens on day 3. And today is day 4. But let me just give you a brief review of what happened yesterday. 90,000 options contracts traded. That is a huge amount. The record, I believe, was set back in 2012 by Facebook. And since this is another social media company, there's a lot of comparisons going on.
But let's take a look at the price action. You can see it's trading at $66.99, $67. That is up another 12% from yesterday's close, which itself was up 30% from the close prior. And just a quick look at the price action. We only have three days worth of price history here, but you can see after it opened up around 50 or so, it kind of languished for a day or so. And then only yesterday was it able to break to the upside here.
But some of the strikes in the options market that are attracting the most interest that is the number-- the share-- the share levels that are attracting the most interest are some of those big round numbers. So $50 per share. That was basically where we closed on the first day of trading. You go down below, $25 per share. You go above the price, $75 a share.
So nothing too big there, but, you know, with the name Reddit itself, given its position within the GameStop, Lore, and all that saga, you got to wonder, is Reddit going to become a meme stock itself? Could be. Too early to tell, but could be. So interesting to keep this an eye on this ticker today.
SEANA SMITH: And we certainly will, because the move to the upside, I think, surprising even those who were excited and-- and-- and-- and believed in this story. But this dramatic move to the upside makes a lot of sense when you take a look at some of the option action. All right, Jared Blikre. Thanks so much.
