Traders Aggressively Use Options On Roblox During Investor Day Presentation

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Roblox Corp (NYSE: RBLX) is up almost 10% on the day Tuesday, trading over 28 million shares of volume, just ahead of its 10-day average of 27 million shares. The strong participation is likely due to Roblox’s investor presentation day where the company is sharing upcoming business plans and ventures.

SEE ALSO: Why Roblox Shares Are Rising

Looking at the options market, traders are actively using options on Roblox,  trading over 299,000 options on the day, with over 232,000 calls and over 66,000 puts (image below).

Why It Matters: Prior to Tuesday, there were a total of approximately 301,000 calls and 191,000 puts for a total of 492,000 options. Today’s 299,000-plus options represent a 60% increase in the total options, all within one day. And considering 77 out of every 100 options today are calls, that suggests a strong bullish bias.

What’s Next: Looking at the option flows today, about 135,000 calls are short dated (expiring Friday), with approximately 40,000 puts being short dated as well. That means approximately 58% of all the options traded Tuesday are expiring at the end of this week.

It’s still early in the week, so monetization of those long calls likely won’t start to kick into high gear until Thursday or Friday. The stock already had 44% of its options expiring Friday. This means there’s a strong chance the stock sees some sort of pullback late this week or Monday due to the large number of options rolling off soon.

Looking at the option chain for the December monthly expiry (Dec. 17), the strongest open interest sits between the $110 and $125 strikes (image below).

Thus it appears option traders have adjusted their support levels up a bit toward the $110 strike. And with the current price around $118 (as of this writing), this may be a potential support area if the stock pulls back due to the upcoming expiration. 

Meanwhile, a break below the $110 strike puts the $100 strike into focus, and then the $95 strike next.

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