Options Trader Takes a Huge Leap of Faith on Roblox


As Roblox kicked off Thursday's trading with a 20% spike, one options trader has to be feeling good about a major bullish bet they placed Wednesday on the interactive tech company.

Roblox reported a miss on the top and bottom lines for its first quarter before the bell Wednesday, but it did announce much better-than-expected user growth rates, which spurred a rally in the name before it settled into a much more modest 3% gain as of Wednesday's close.

That user growth was very likely what compelled this particular trader to make a long-term bullish bet on Roblox.

"One single trade accounted for more than 13% of today's total volume, where a trader purchased 18,000 contracts of a January 2024 17.5/30/65-call spread risk reversal," OptionsPlay's chief strategist, Tony Zhang, said Wednesday on CNBC's "Fast Money."

The fact that this trade accounted for such a significant portion of Wednesday's action is eye-popping, especially since Roblox traded 470% of its average daily volume.

"This is a very long-dated January 2024 bullish view targeting $65 to the upside, and committing $31 million in capital to purchase 1.8 million shares if the stock does fall down to that $17.50-put strike," Zhang said.

In this wager, the trader is purchasing a 30/65-strike call spread, and further cutting their premium outlay by selling a 17.5-strike put. In this particular example, the trader actually collects 25 cents in premium per contract, or about $450,000 total.

Roblox was 18% higher in Thursday's session.


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