OpenDoor stock has been a target of retail options traders this month
Meme stocks are back in a big way this week. Retail traders have started to scoop up heavily-shorted stocks again, looking to rinse-and-repeat the GameStop (GME) effect from 2020. One such stock is real estate platform OpenDoor Technologies Inc (NASDAQ:OPEN), after reports that EMJ Capital founder and activist investor Eric Jackson was eyeing the company. The penny stock is part of the newly-coined DORK trade, named for the tickers Krispy Kreme (DNUT), OpenDoor (OPEN), Rocket Companies (RKT), and Kohl’s (KSS).
Options traders are getting in on the fun, as OPEN landed on Senior Quantitative Analyst Rocky White’s list of equities with the highest options volume over the past two weeks. In the last 10 sessions, the stock has seen 7,198,384 calls and 2,744,586 puts exchanged, a crazy amount for a company with a meager $1.9 billion market cap. The most popular contract during this time frame has been the weekly 7/25 3-strike call and the 2.5 strike in the same series.
At last check, OPEN was up 19.7% to trade at $2.74. The stock has added 386% in July, with 300% of this following July 11. The equity has finished 13 of the last 17 sessions higher, with eight of those moves by double digits. The shares traded as high as $4.97 on Monday, but are now not far off their July 2024 level of $2.41.
Like most stocks targeted by retail traders, the short squeeze potential is the main allure. Short interest fell 11% in the most recent reporting period, yet the 135 million shares sold short still accounts for 21% of OPEN’s total available float.
Those purchasing OPEN’s near-term options have been willing to pay a pretty penny. The stock’s 30-day at-the-money implied volatility of 277% rests just one percentage point from a 52-week peak, meaning the options market has been pricing in some steep volatility expectations.