Bitcoin mining giant Riot Platforms (RIOT) is down 25% over the past year, even as cyrpto prices have been surging higher. One trader sees shares continuing to underperform in the first half of 2025.
That’s based on the June 2025 $11 puts. With 186 days until expiration, 10,016 contracts traded compared to a prior open interest of 196, for a 51-fold rise in volume on the trade. The buyer of the puts paid $2.78 to make the bearish bet.
Riot shares recently traded for just over $12, so the stock would need to decline by over $1, or about 9%, for the option to move in-the-money. The strike price of the option is about halfway between Riot’s 52-week low of $6.36 and high of $18.75.
Bitcoin mining is a challenging industry. While prices are soaring, the halving process earlier this year cut the reward for mining bitcoin in half. It’s crucial to find low-cost power centers for bitcoin mining to earn a profit.
Action to take: While Riot shares will see some big daily moves, it’s possible that shares could see a big swing lower given the economics of the mining business. Investors interested in bitcoin can likely see more consistent returns with one of the bitcoin ETFs.
For traders, the share price performance suggests that further weakness is likely. The June 2025 $11 puts could potentially see mid-double-digit returns from any further weakness in the months ahead. Traders will want to take quick profits on any massive down day for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.