🎮 RBLX Collar Strategy - $10M LEAPS Play Into Earnings! 💰

📅 October 27, 2025 | 🔥 Unusual Activity Detected

🎯 The Quick Take

Someone just dropped $10M on a collar strategy for Roblox using January 2027 LEAPS! This institutional trader is protecting a long position by selling upside at $170 calls (+30%) while buying downside protection at $92.5 puts (-29%). With Q3 earnings dropping in just 3 days on October 30th, this is a textbook risk management play ahead of a major catalyst.

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📊 Company Overview

Roblox Corporation (RBLX) operates a free-to-play online video game platform with:
- Market Cap: $88.5 Billion
- Industry: Prepackaged Software (SIC 7372)
- Daily Active Users: ~110 million
- Primary Business: User-generated gaming platform with creator monetization through in-game purchases and advertising

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📊 The Option Flow Breakdown

The Tape (October 27, 2025 @ 13:13:38):

Time	Symbol	Side	Buy/Sell	Type	Expiration	Premium	Strike	Volume	OI	Size	Spot	Option Price
13:13:38	RBLX	MID	SELL	CALL	2027-01-15	$6.7M	$170	2.9K	108	2,875	$130.39	$23.20
13:13:38	RBLX	MID	BUY	PUT	2027-01-15	$3.8M	$92.5	2.9K	71	2,875	$130.39	$13.20

Net Credit: $9.90 per contract = $2.85M total collected ($23.20 - $13.20 = $9.90 × 2,875 contracts)

🤓 What This Actually Means

This is a collar strategy - a classic way institutions protect long stock positions while generating income! The trader:

• Collects $6.7M by selling $170 calls (capping gains at 30% upside)
• Spends $3.8M buying $92.5 puts (protecting against 29% downside)
• Nets $2.85M in premium while defining risk through January 2027
• Likely owns 287,500 shares of RBLX (2,875 contracts × 100 shares)
• Creates a trading range of $92.5 to $170 with full protection outside those bounds

Unusual Score: LARGE institutional position management - This represents roughly $37.5M in underlying stock exposure at current prices!

Translation: Big money owns a massive RBLX position and is locking in a defined range ahead of earnings volatility. They're comfortable sacrificing gains above $170 to protect against a drop below $92.5.

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📈 Technical Setup / Chart Analysis

YTD Performance Chart

Roblox is crushing it this year with +115% YTD performance! The stock has more than doubled from under $60 in January to current levels around $130.

Key observations:
- Explosive growth: Climbed from $58 lows to $130+ high in 10 months
- Recent momentum: Strong rally through Q3 ahead of earnings
- Consolidation zone: Currently finding support in the $125-135 range
- High conviction: Institutional accumulation throughout the year
- Earnings catalyst: Q3 results on October 30th could be next major catalyst

Gamma-Based Support & Resistance Analysis

Current Price: $130.66

The gamma chart reveals critical levels that explain this collar positioning:

🔵 Support Levels (Put Gamma):
- $130 - Strongest Support: Massive 2.58 total GEX with net bullish tilt (0.59)
- $125: Moderate support at 1.57 GEX, slight put dominance (-0.06)
- $120: Solid floor at 1.27 GEX with bullish net (0.24)
- $115: Decent support at 1.12 GEX
- $110: Heavy put gamma wall at 1.33 GEX (would attract buyers)

🟠 Resistance Levels (Call Gamma):
- $135 - Strongest Resistance: Huge 2.98 total GEX with massive bullish skew (2.10 net)
- $140: Moderate resistance at 1.61 GEX (1.18 net call)
- $145: Solid wall at 1.65 GEX (1.46 net call)
- $150: Strong resistance at 1.85 GEX (1.75 net call)
- $155: Lighter resistance at 0.92 GEX

Net GEX Bias: BULLISH - Total call GEX of 21.19 vs put GEX of 10.28 indicates market makers will be net buyers on dips

Current Position: Trading right at the strongest support zone ($130) with immediate resistance at $135. The collar strikes at $92.5 and $170 make perfect sense given these gamma dynamics!

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🎪 Catalysts

Upcoming Events

Q3 2025 Earnings - October 30, 2025 (3 days away!)
- Wall Street expects EPS of -$0.45 (range: -$0.51 to -$0.39) - MarketBeat
- Revenue estimate: $1.3 billion with company guidance of $1.6 billion - Moomoo
- Bookings guidance: $1.70-$1.85 billion (up massively from $1.13B last year) - Yahoo Finance
- DAU estimates: 122-140 million users (consensus: 128M) - Finimize
- Beat probability: Very high - company has beaten EPS in last 4 quarters with +12.87% earnings ESP - Zacks
- Historical reaction: Stock surged 10.28% after Q2 beat - TipRanks

Third-Party User Growth Data - Explosive
- Similarweb data: Shows 81-128% YoY increase in daily/concurrent users - Finimize
- Current estimates: 135-140 million DAUs trending into Q3 (well above 128M consensus) - Finimize
- Competitive position: Now surpasses Minecraft (15M DAUs) and Fortnite (1.5M DAUs) - Gaming Tools

Advertising Revenue Ramp - $1B+ Opportunity by 2026
- Target: $1+ billion in ad revenue by 2026 - Ainvest
- Rewarded video ads: Beta partnership with Google, ~100 publishers integrated - Nasdaq
- Immersive 3D ads: Integrated directly into gaming environments - AOL
- Brand partnerships: Netflix, Lionsgate, Sega, Kodansha, FIFA, Google Play - Roblox RDC 2025
- Challenge: Needs better third-party measurement tools for full advertiser adoption - eMarketer

Roblox Moments - Social Media Play
- Launch timing: Late 2025 with APIs rolling out - Dev Forum Creator Roadmap
- Feature: TikTok-style short-form video built into platform - GeeIQ
- Impact: Users can capture, edit, share gameplay clips with instant join functionality - Roblox RDC 2025
- Strategic value: Creates organic virality and transforms Roblox into native Gen Z/Alpha social network - Dev Forum Creator Roadmap

Recently Completed

DevEx Rate Increase - September 2025
- Creator payout increase: 8.5% higher conversion rates from Robux to cash - Ainvest
- Annual creator earnings: Over $1 billion paid to developers - Dev Forum Creator Roadmap
- Q2 2025 payouts: $316 million to creators - Roblox RDC 2025

Q2 2025 User Growth Beat
- 111.8 million DAUs: Up 41% YoY and 14% QoQ - Backlinko
- 27.4 billion hours of engagement in Q2 - Exploding Topics
- 390 billion visits to experiences with 21 experiences visited per user monthly - Roblox RDC 2025

4D AI Object Generation Unveiled - RDC 2025
- Cube 3D AI system: Creates fully functional, scripted assets from text prompts - GeeIQ
- Example: "Sleek futuristic red sports car with green exhaust flames" generates working vehicle - GeeIQ
- Rollout: Mid 2026 for select object types - Dev Forum Creator Roadmap

Enhanced Safety Features - Regulatory Risk Mitigation
- Remote parental controls: Launched November 2024 - Roblox Newsroom
- DM restrictions: Users under 13 can't direct message outside games (Q1 2025) - Roblox Newsroom
- Experience/friend blocking: Enhanced controls launched April 2025 - Roblox Newsroom

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🎲 Price Targets & Probabilities

Using gamma levels, analyst targets, and catalyst timing:

🚀 Bull Case (30% chance)

Target: $150-$170 by early 2026

Drivers:
- Q3 earnings massive beat on user growth (135-140M DAUs vs 128M consensus)
- Bookings acceleration above $1.85B guidance
- Advertising revenue momentum with major brand partnerships
- Roblox Moments viral adoption driving new user cohorts
- Breaks through gamma resistance at $135, $140, $145 sequentially

Catalyst path: Earnings beat → $145 gamma resistance → analyst upgrades → $170 collar strike by Q1 2026

Risk to collar trade: Caps gains at $170 (30% upside), but trader keeps full premium collected

😐 Base Case (45% chance)

Target: $125-$145 range through Q4 2025

Drivers:
- Solid Q3 beat but in-line with whisper numbers
- DAUs at 130-135M (above consensus but not explosive)
- Revenue growth steady but profitability still distant
- Stays within current gamma bands around $130-140 zone
- Consolidation after strong 115% YTD run

Perfect scenario for this collar: Stock trades in this range allowing premium to decay while maintaining protection. Trader keeps $2.85M credit and full position flexibility.

😰 Bear Case (25% chance)

Target: $92.5-$110 pullback

Drivers:
- Q3 disappointment on monetization metrics despite user growth
- Ad revenue ramp slower than expected due to measurement tool gaps
- Profitability concerns resurface with elevated R&D spend (71% of opex)
- Broader market correction hitting unprofitable growth names
- Tests gamma support at $125, $120, $115 levels

Collar protection kicks in: Put strike at $92.5 provides full downside protection. Maximum loss on underlying position is capped at 29% from current levels.

Analyst consensus: Average price target of $151 suggests 18.5% upside with range from $77 to $180 - TipRanks

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💡 Trading Ideas

🛡️ Conservative: Mini-Collar for Earnings Protection

Play: Own stock + sell Nov $145 calls + buy Nov $115 puts

Setup:
- Own 100 shares of RBLX at $130 = $13,000 position
- Sell Nov $145 calls for ~$4.00 credit
- Buy Nov $115 puts for ~$2.50 debit
- Net credit: $150 per collar

Risk: Caps gains at $145 (11.5% upside)
Reward: Protects below $115 (11.8% downside), keeps $150 premium
Max profit: $1,650 if stock at $145 by Nov expiration
Max loss: Limited to -$1,350 below $115

Why this works: Mimics the institutional play on shorter timeframe through earnings volatility

⚖️ Balanced: Bull Put Spread at Support

Play: Sell RBLX Nov $125/$115 put spread

Setup:
- Sell Nov $125 puts for ~$4.50
- Buy Nov $115 puts for ~$2.50
- Net credit: $200 per spread

Risk: $800 max loss if RBLX below $115
Reward: $200 credit (25% return) if RBLX above $125
Breakeven: $123.00
Probability of profit: ~65-70% based on gamma support levels

Why this works: Gamma data shows strong support at $130, $125, $120 - selling puts into this floor with defined risk

🚀 Aggressive: Long Calls for Earnings Pop

Play: Buy RBLX Nov $140 calls ahead of Oct 30 earnings

Setup:
- Buy Nov $140 calls for ~$5.50
- Target earnings beat catalyst on October 30th
- Hold through earnings or take profits on 10%+ post-earnings move

Risk: $550 per contract if RBLX doesn't break $140
Reward: Unlimited above $145.50 breakeven
Target: $150-155 on strong beat = 2-3x return

Why this works: Historical 10.28% post-earnings surge + user growth data suggests beat likely. Gamma shows path through $135 resistance if momentum builds.

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⚠️ Risk Factors

📅 Earnings Timing (3 days away)
- Immediate IV crush risk after October 30th announcement
- Options premiums currently elevated ahead of event
- Historical volatility shows 10%+ moves on earnings
- Whisper numbers may already be factored into current price

💸 Profitability Concerns
- Still posting -$0.45 EPS with no clear path to profitability
- Net margins at -21.37% despite strong revenue growth - Ainvest
- R&D spending remains at 71% of operating expenses
- $278.4M net loss in Q2 2025 despite $1.44B revenue - Ainvest

👶 User Demographics Risk
- Heavy skew toward users under 13 years old
- Uncertain retention as users age out of platform
- Need to attract and retain older demographics - Seeking Alpha

📊 Ad Measurement Gap
- Lack of third-party tracking tools limiting advertiser adoption
- Working with DoubleVerify, Nielsen, etc. but tools not fully deployed - eMarketer
- Could slow $1B+ ad revenue target if not resolved by 2026

🎮 Competition Intensifying
- Epic Games launching UGC features directly competing with Roblox model
- Fortnite Creative Mode improvements targeting creator economy
- Minecraft maintaining strong player base with mod ecosystem - Gaming Tools

📉 Valuation Concerns
- Trading at $88.5B market cap with -$935M annual losses
- High expectations baked into 115% YTD gain
- Any guidance disappointment could trigger sharp correction

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🏁 The Bottom Line

Real talk: This $10M collar is a masterclass in risk management from institutional money. With Roblox earnings dropping in 3 days, someone with a massive position ($37.5M+ in stock) is locking in a defined range while collecting $2.85M in premium.

The setup tells us:
- Smart money is protecting a long position, not exiting (still bullish long-term)
- They're comfortable with up to $170 gains through January 2027
- They want full protection below $92.5 against any catastrophic scenarios
- The timing ahead of earnings suggests volatility concerns but not directional fear

If you own RBLX: Consider taking some profits above $145 or setting up your own collar to protect gains. The gamma chart shows heavy resistance building above $135.

If you're watching: October 30th earnings is THE catalyst - user growth data suggests a beat is likely. Entry on any post-earnings dip toward $125 support could be attractive.

If you're bullish: The analyst consensus of $151 price target (+18.5%) and exceptionally strong user growth metrics support upside, but profitability timeline remains uncertain. Consider bull put spreads to collect premium while staying protected.

Mark your calendar:
- October 30th (Thursday) before open - Q3 2025 earnings release
- 8:30 AM ET - Conference call
- Historical pattern shows 10%+ moves on earnings beats

The institutional message: "We love RBLX long-term (holding $37M+ position), but we're not paying for volatility risk through earnings and we're happy to cap gains at +30% over the next 15 months in exchange for full downside protection."

Disclaimer: Options trading involves substantial risk and is not suitable for all investors. This analysis is for educational purposes only and not financial advice. Past performance doesn't guarantee future results. Always conduct your own due diligence before trading.

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About Roblox: Roblox Corporation operates a free-to-play online video game platform with approximately 110 million daily active users, monetizing through user-generated content, in-game purchases, and advertising with an $88.5 billion market cap in the prepackaged software sector.