Roblox Options Traders Bet On Blue Sky Run

Roblox Corp. RBLX stock investors had a bullish reaction to its May 10 first-quarter earnings and shot up 21% the day following the report.

The stock then traded sideways in consolidation for seven trading days before making another big move north.

On Monday, Roblox bust through resistance at its previous all-time high level of $83.41 and broke into blue skies. With no resistance in the form of price history, a number of options traders bet over $2.56 million that shares of the gaming company, termed "crack for kids" by Danielle Shay, director of options at Simpler Trading, are headed higher.

The Roblox Option Trades: Below is a look at Monday's notable Roblox options alerts courtesy of Benzinga Pro:

• At 9:34 a.m., Monday a trader executed a call sweep near the ask of 540 Roblox options with a strike price of $83 expiring on May 28. The trade represented a $221,400 bullish bet for which the trader paid $4.10 per option contract.
• At 9:35 a.m., a trader executed a call sweep near the ask of 482 Roblox options with a strike price of $83 expiring on May 28. The trade represented a $202,440 bullish bet for which the trader paid $4.20 per option contract.
• At 10:07 a.m., a trader executed a call sweep near the ask of 990 Roblox options with a strike price of $90 expiring on July 16. The trade represented a $732,600 bullish bet for which the trader paid $7.40 per option contract.
• At 10:09 a.m., a trader executed a call sweep near the ask of 500 Roblox options with a strike price of $95 expiring on Aug. 20. The trade represented a $455,000 bullish bet for which the trader paid $9.10 per option contract.
• At 10:09 a.m., a trader executed a call sweep near the ask of 278 Roblox options with a strike price of $90 expiring on Oct. 15. The trade represented a $375,300 bullish bet for which the trader paid $13.50 per option contract.
• At 10:27 a.m., a trader executed a call sweep above the ask of 331 Roblox options with a strike price of $100 expiring on June 18. The trade represented a $112,200 bullish bet for which the trader paid $3.40 per option contract.
• At 11:30 a.m., a trader executed a call sweep at the ask of 2,500 Roblox options with a strike price of $110 expiring on June 18. The trade represented a $462,500 bullish bet for which the trader paid $1.85 per option contract.

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

RBLX Price Action: Shares of Roblox were trading up 7.36% to $88.54 at last check.