Options traders are placing bullish bets on Digital World Acquisition Corp. (DWAC) following its dramatic surge, speculating that the shares may double within a matter of days. The stock has experienced a significant increase in options volume over the past two sessions, with a record number of contracts changing hands this week. The blank-check company, which aims to take Donald Trump’s social media venture public, has seen its shares spike by up to 100% since Monday morning.
Tags: Options Trading, Digital World Acquisition Corp., DWAC, Blank-Check Company, Donald Trump, Social Media, Stock Surge, Market Speculation, Trading Frenzy, Options Volume, WallStreetBets, StockTwits, Market Buzz, Call Options, Short-Term Trading, Market Speculation.
In the midst of this trading frenzy, a $100 call option expiring on Friday attracted considerable attention, trading 13,200 times by 2:43 p.m. in New York. This option emerged as the most popular contract of the session, with the stock needing to rally approximately 92% by the end of the week for the option to be profitable.
The $100 call option saw transactions in various increments, ranging from as little as 42 cents to as much as $3.03 each. Online discussions among retail traders on platforms like WallStreetBets and StockTwits focused heavily on Digital World Acquisition, solidifying its position among the most-discussed stocks.
According to Danny Kirsch, head of options at Piper Sandler & Co., the surge in market activity appears driven by traders actively bidding for options, potentially positioning themselves for an extended rally. Kirsch noted the unusual nature of buying calls that expire in just three days and are 100% out of the money. He suggested that this speculative buying could be a play for a further squeeze, possibly influenced by expectations of a strong performance by Trump in New Hampshire.
As the trading session progressed, the price of the $100 call option experienced a dip, indicating that some traders may have started to sell the long-shot option.
