Metaverse and gaming platform
Roblox (RBLX) is up 26% over the past year, slightly underperforming the overall stock market. One trader sees shares trending higher into next year.
That’s based on the February 21, 2025 $62.50 calls. With 81 days until expiration, 5,951 contracts traded compared to a prior open interest of 240, for a 25-fold rise in volume on the trade. The buyer of the calls paid $1.21 to make the bullish bet.
Roblox shares recently traded for about $49, so shares would need to rise by $13.50, or about 28%, for the option to move in-the-money. It would also mean Roblox breaking out above its 52-week high of $55.10.
Operationally, Roblox has had a mixed year. Revenues are up 29%, but the company continues to lose money, nearly $1 billion over the past year. While Roblox has over $2 billion in cash on its balance sheet, higher revenues and a shift to profitability will be needed to keep shares trending higher.
Action to take: With shares trending higher for now and recently pulling back from 52-week highs, a retest of those highs over the coming months is likely. Momentum investors may like shares here.
For traders, the February $62.50 calls are well positioned for a massive move higher, and Roblox next reports earnings in early February, which could cause shares to spike higher right before the option expires.
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.