Shares of cryptocurrency mining company Riot Blockchain (RIOT) have been sliding along with the price of Bitcoin the past few months. However, one trader sees shares moving far higher in the next year.
That’s based on the January 2023 $85 call. With 393 days until expiration, 3,845 contracts traded compared to a prior open interest of 197, for a 20-fold rise in volume. The buyer of the calls paid $3.45 to make the trade.
Shares last traded near $22.50. The $85 strike price would require a 277 percent rally in shares for the option to move in-the-money.
Such a move is possible if the crypto mining company benefits from rising crypto prices in 2022. While shares currently trade for about $22.50 – and are up 110 percent for 2021 – the stock does have a 52-week high near $80 per share.
Action to take: Investors may like shares, as the crypto mining company is continuing to add mined Bitcoin to its balance sheet at today’s prices. Higher Bitcoin prices down the line should add tremendously to the stock’s value.
For traders, the options are a low-priced way to bet on a rising price of Bitcoin in 2022. They stand a moderate chance of going to zero, but have a solid chance of seeing substantial gains in the next year. Traders might want to wait until the start of a new year, or a move higher in Bitcoin before making the trade, however.
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.