Shares of digital real estate platform Opendoor Technologies (OPEN) have shed over two thirds of their value in the past year. One trader sees the possibility for a rebound ahead.
That’s based on the February 25th $11 calls. With 15 days until expiration, 10,605 contracts traded hands, compared to an open interest of 375, for a 93-fold jump in volume. The buyer of the calls paid $0.62 to make the trade.
The company next reports earnings on February 24th, the day before the options expire. Shares are just under $10, so would need to rally about 12 percent in order for the options to move in-the-money.
While still an early-stage company reporting modest losses, revenue at the company is up over 569 percent in the past year on the back of a strong market for single family homes. Shares are now back to their June 2020 IPO price following a rally up to $30 that ended in early 2021.
Action to take: The shares look attractive here given the company’s growth, although revenue may slow if the housing market does on the back of higher interest rates later in the year. With the stock back to its IPO price before interest rates have officially risen, the stock may have fallen too far, too fast.
For trader, the option call is an interesting play for an earnings beat and move higher in shares in the next two weeks. The option is cheap enough to deliver triple-digit gains.
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 of the companies mentioned in this article.