🔥 RDDT VOLCANIC: $70M Strangle on 2025-8-15
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🚨 RDDT Explodes with $70M Institutional Strangle - Someone's Betting on Absolute Chaos!
📅 August 16, 2025 | 🔥 Unusual Activity Detected
🎯 The Quick Take
Holy moly! Someone just deployed $70 MILLION on Reddit calls while simultaneously selling $12M in puts - creating a massive $58M net strangle position expiring in January 2027! 🤯 This isn't your neighbor Bob trading on Robinhood - this is institutional money betting Reddit either rockets above $328 or craters below $57 in the next 18 months. With an unusual score of 9.5/10 (we've NEVER seen anything like this!), this trade is literally off the charts - 17,581x larger than average RDDT options activity!
💰 The Option Flow Breakdown
📊 What Just Happened
Check out these absolutely bonkers trades that hit the tape at 14:11:58:
| Time | Symbol | Side | Buy/Sell | Type | Expiration | Strike | Premium | Volume | OI | Size | Spot | Option Price |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 14:11:58 | RDDT | MID | BUY | CALL | 2027-01-15 | $270 | $70M | 10K | 10K | 10,000 | $246.2 | $70 |
| 14:11:58 | RDDT | MID | SELL | PUT | 2027-01-15 | $115 | $12M | 10K | 31K | 10,000 | $246.2 | $12 |
Unusual Score Visual: [🔥🔥🔥🔥🔥🔥🔥🔥🔥🔥] 9.5/10
🤓 What This Actually Means
Real talk: This trader just structured the mother of all volatility plays! Here's the translation for us regular folks:
- Net Premium Paid: $58 MILLION ($70M for calls minus $12M collected from puts)
- The Setup: Long $270 calls + Short $115 puts = Long strangle with massive upside bias
- Breakeven Points: Stock needs to hit $328 on the upside or $57 on the downside
- Required Move: +33.2% upside or -76.8% downside from current $246.20
- Time to Expiration: 507 days (January 15, 2027)
This trader is basically saying: "Reddit's either going to the moon or getting absolutely destroyed - and I'm betting $58 million on it!" 🚀💥
📈 Technical Setup / Chart Check-Up
Looking at RDDT's price action, we're seeing some wild moves already:
- Current Price: $246.20 (as of the trades)
- Recent Action: Stock ripped 69% in just 2 weeks post-earnings (from $145 to $247)
- Key Resistance: $250 (psychological level and recent highs)
- Key Support: $200 (prior breakout level)
- Volatility: Through the roof! Stock's been swinging like a penny stock despite being a $40B company
The technical setup screams "something big is coming" - and this whale clearly agrees!
🎪 Upcoming Catalysts
Buckle up, because Reddit's got a packed calendar of potential fireworks:
📅 Near-Term Catalysts (Q3-Q4 2025)
- Q3 2025 Earnings (October): Company guided for $535-545M revenue vs Street at $471M - that's a monster beat setup!
- AI Data Licensing Expansion: Currently generating $35M quarterly from AI partnerships with Google ($60M/year) and OpenAI
- Securities Lawsuit Deadline: August 18, 2025 lead plaintiff deadline for class action regarding Google AI impact
🚀 Medium-Term Catalysts (2026-2027)
- International Expansion: Launching in 35 new countries throughout 2025
- Reddit Answers Launch: New AI-driven summarization feature competing with Google/Perplexity
- Paid Subreddit Rollout: Premium monetization of top communities
- 2026 Midterm Elections: Political advertising surge expected
🎲 Price Targets & Probabilities
Based on the strangle structure and current fundamentals, here's what the smart money might be thinking:
🚀 Bull Case (25% chance)
Target: $400+ by Jan 2027
- AI data licensing becomes 20% of revenue
- International users double to 200M+ (currently 110.4M DAU with 32% international growth)
- Successfully monetizes at Twitter-level ARPU
- P/E compresses from 213x to "reasonable" 100x on growth
😐 Base Case (50% chance)
Target: $200-300 range
- Steady growth continues but slows from 78% to 30-40%
- Valuation gradually normalizes
- Competition from TikTok/X limits upside
- Stock chops sideways digesting gains
😰 Bear Case (25% chance)
Target: Sub-$100
- Google algorithm changes crush traffic as Wells Fargo warned
- AI companies stop paying for data
- Growth disappointment triggers multiple compression
- Redburn's $75 price target proves right
💡 Trading Ideas
Here's how different traders might play this setup:
🛡️ Conservative: "The Chicken Dinner"
Buy RDDT shares + Sell $300 Jan 2026 calls
- Cost basis: ~$246 per share
- Collect ~$15 premium on covered calls
- Effective purchase price: $231
- Max gain: 23% if called away at $300
- Why this works: You're betting on continued strength but capping upside for income
⚖️ Balanced: "Poor Man's Whale"
Jan 2026 $250/$350 Call Spread
- Cost: ~$25 per spread
- Max gain: $75 (3x return)
- Breakeven: $275
- Why this works: Similar thesis to the whale but 1/1000th the capital requirement
🚀 Aggressive: "YOLO with Training Wheels"
Weekly $260 calls (rolling)
- Cost: ~$3-5 per contract
- Target: 50-100% gains on any spike
- Stop loss: 50% of premium
- Why this works: If this whale knows something, the move could happen fast
⚠️ Risk Factors
Let's keep it 100 - here's what could absolutely wreck this trade:
- Insane Valuation: Trading at 213x P/E ratio - any disappointment = instant death
- Google Dependency: One algorithm change could nuke 40% of traffic overnight (Wells Fargo and Baird concerns)
- Securities Litigation: Class action lawsuit brewing over misleading AI impact statements
- TikTok Competition: Short-form video eating Reddit's lunch with younger users
- Options Liquidity: These deep ITM LEAPs might be hard to exit quickly
🎯 The Bottom Line
Real talk: When someone drops $70 MILLION on a single options trade that's 17,581x larger than average, you better believe they know something or they're the world's biggest degenerate gambler!
This unprecedented strangle position (unusual score 9.5/10 - literally never seen before!) is betting on Reddit either becoming the next $100B tech giant or imploding spectacularly. With 78% revenue growth and AI companies paying millions for data, the bull case has legs. But that 213x P/E ratio? That's playing with fire! 🔥
If you own RDDT: Consider taking some profits or hedging - this whale clearly expects fireworks
If you're watching: Mark your calendar for Q3 earnings in October - that's likely ground zero
If you're bearish: That short $115 put suggests limited downside below $100
Remember: Options trading is risky AF and this whale might just be hedging a massive equity position. But when the biggest RDDT options trade in history hits the tape, it's time to pay attention! 👀
Disclaimer: This analysis is for educational purposes only. Options trading involves substantial risk of loss. The unusual score of 9.5/10 indicates this trade is 17,581x larger than typical RDDT options activity. Always do your own research and consider your risk tolerance before trading.