Opendoor has surged over 500% this month amid meme-stock frenzy and extreme volatility. With implied volatility at record highs and options volume soaring, traders may consider straddle strategies to profit from wild price swings regardless of direction.

Traders Flock to the Newest Meme Stock

Opendoor Technologies has gone from a struggling former pandemic-era darling to the talk of the U.S. equity market. Shares jumped as much as 42.7% to $3.21 on Monday, extending its gravity-defying rally to more than 500% this month!

The surge came after a bullish X post on July 14 by Eric Jackson, the head of EMJ Capital and an early Carvana bull, who shared a turnaround thesis for the struggling company and placed a long-term price target of $82 per share.

The swings were reminiscent of the GameStop era in 2021, when retail traders rallied on platforms like Reddit to buy small, volatile names.

Opendoor has many similarities to the GME surge five years ago. It has high short interest, a plunging stock price over the past few years, huge speculation on WSB Reddit. These exact components were in place 5 years ago for GME.

This enthusiasm led to a surge in trading volume and a classic "short squeeze," where investors betting against the stock are forced to buy shares to cover their positions, further driving up the price.

Options for Opendoor

Options volume for Opendoor shares more than tripled from the previous record Friday to exceed 3.4 million contracts. About half of the volume was in options expiring this Friday.

The implied volatility (IV) of Opendoor options currently stands at 325.89%, indicating an extremely elevated level of expected price movement. The IV percentile is at 100%, meaning this is the highest level of implied volatility the stock has seen in the past year. The IV/HV ratio is 1.74, showing that implied volatility significantly exceeds historical volatility.

Source: Tiger Trade App

Additionally, the call-to-put ratio is 1.97, suggesting a bullish bias among options traders.

Source: Tiger Trade App

Option Strategy: Straddle

Opendoor’s options activity reflects extreme speculation detached from fundamentals, driven by retail traders targeting high short interest. While the Call/Put ratio and bulk orders signal bullish intent, the 325% IV creates asymmetric risk for option buyers. Investors should monitor short-interest updates and social sentiment closely. So it's reasonable to use straddle strategy to ride the wave.

Example : Aug 8 $3.50 Straddle

Buy 1 Aug 8 $3.50 straddle @ $2.19. Take profit if stock breaches $5.68 or $1.32 pre-earnings.

$OPEN Straddle 250808 3.5C/3.5P$

• Total Cost: $2.19 per straddle ($219 per contract).

Source: Tiger Trade App