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Roblox Put Options Sell Like Hotcakes as Shares Tank 21%
$Roblox (RBLX.US)$ put options expiring tomorrow are selling like hotcakes as investors seek protection against further losses after disappointing earnings sent the stock tanking 21%.
More than 9,590 put options that give the holder the right to sell Roblox shares at $30 each by tomorrow have changed hands just before noon in New York Thursday. That's more than 11 times the size of the contract's open interest, according to data compiled by moomoo.
The price of the $30 puts also jumped five-fold to 34.5 cents a share, after climbing to as high as $1.27 as the stock slumped near that strike price. That put is the most-active Roblox options contract.
More than 9,590 put options that give the holder the right to sell Roblox shares at $30 each by tomorrow have changed hands just before noon in New York Thursday. That's more than 11 times the size of the contract's open interest, according to data compiled by moomoo.
The price of the $30 puts also jumped five-fold to 34.5 cents a share, after climbing to as high as $1.27 as the stock slumped near that strike price. That put is the most-active Roblox options contract.
Sentiment turned negative, sending the stock plunging to $30.64 after the company lowered its bookings outlook for the full year and revenue for the first quarter ended March 31 missed analysts' estimates.
Revenue for the quarter ended March 31 reached $801.3 million, missing estimates compiled by Capital IQ that, on average, called for $929.1 million. For the second quarter, the company forecast revenue to be between $855 million to $880 million, below the $938.6 million consensus on Wall Street.
The gaming company now forecasts bookings to reach between $4 billion to $4.1 billion for 2024, 4% lower than it earlier projected.
"We want to be very transparent, conservative and responsible and that is why we made the very difficult internal decision to adjust our bookings guidance," Chief Executive Officer David Baszucki said on the company's earnings call with analysts Thursday morning. "We believe we'll continue to deliver the same operating free cash flow that we implied in our guidance last quarter, while making judicious hiring in our economy AI content, live ops and safety groups."
More than 227,400 Roblox options were traded just before noon in New York, landing Roblox in the eighth spot for the stocks with the highest volume, according to data compiled by moomoo. $NVIDIA (NVDA.US)$ and $Tesla (TSLA.US)$ remained at the top, followed by $Amazon (AMZN.US)$, $Apple (AAPL.US)$, $Robinhood (HOOD.US)$ and $Advanced Micro Devices (AMD.US)$, data showed.
After Roblox's sell-off, eight of the 15 technical indicators are now flagging that the stock is oversold, and the trend could be leaning bullish. Only three technical indicators -- the moving average convergence divergence (MACD), the ARBR emotion index (AR), and the psychological line (PSY) -- remain negative. The remaining four indicators are neutral.
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Luzi Ann Santos
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Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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