Roblox Stock Has Another Strong Day On Heavy Option Flows

Roblox Corporation RBLX stock is having another strong day on Wednesday, up approximately 6% on the day and holding around the $123 price as of this writing. Trading volume has been robust, with over 31 million shares changing hands, just shy of the 10 day average of 33 million shares.

What is also impressive is the number of options traded on the day, which is well over 246,000 (image below).

Why It Matters: The large amount of options traded today (246,000+) is important because prior to Wednesday, the stock only had about 535,000 options. Hence, today's trading activity represents a 45% increase of the total options within one day.

This large increase showcases how aggressively option traders are engaging in the stock. And considering roughly 75 out of every 100 options have been calls, they are heavily bullish on the stock.

What's Next: Roblox Corporation has a material amount of options rolling off Friday. Prior to Wednesday, 48% of them were set to expire Friday (246,000). Wednesday added another 120,000 short dated options. 

With such a large number of options rolling off Friday (approximately 366,000) the later it gets in the week, the harder it will be to make new gains in the stock.

Looking ahead to the Dec. 17 expiry, the strongest strikes by open interest are between $110 and $125 (image below).

This suggests option traders see a new range for December between $110 and $125, with the former level lining up nicely with last week's high. This may offer a solid pullback level late this week or early next week. 

If the $110 level fails next week, there is solid open interest all the way down to the $90 strike for the Dec. 17 expiry.