Riot Blockchain, Inc (NASDAQ:RIOT) gapped up over 7% and ran another 5.61% intraday on Wednesday when Bitcoin (CRYPTO: BTC) jumped up above the $30,000 mark.
Since then, the stock has traded down in consolidation and formed a bull flag pattern, with the pole created on Tuesday and Wednesday and the flag on Thursday and Friday.
When the markets opened Friday morning, a number of option traders began to purchase bullish call contracts of Riot, and at 10:15 a.m., big bullish volume entered and the stock shot up over 3% on a single 15-minute candle.
Riot then rejected a resistance level near the $28 mark and big bearish volume came in and erased the stock’s gain.
When Riot was unable to get continuation on the bull flag break options traders began to hammer bearish put contracts beginning at 10:36 a.m. Together the options traders bet over $1.14 million Riot’s stock is headed lower over the next week. One trader purchased $216,062 worth of put contracts with a strike of $28 and a July 30 expiry.
These traders could be betting Riot’s bull flag pattern won’t be recognized and the stock will trade lower — or they could see Bitcoin taking a nose-dive over the weekend and Riot following suit.
See Also: Want to Buy Riot Blockchain Inc (NASDAQ: RIOT) Stock? See This First.
Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.
These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.
The RIOT Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:
- At 10:36 a.m., a trader executed a call sweep at the ask of 596 Riot Blockchain options with a strike price of $29.50 expiring on July 23. The trade represented a $59,600 bullish bet for which the trader paid $1 per option contract.
- At 10:45 a.m., a trader executed a call sweep near the ask of 1,403 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $216,062 bullish bet for which the trader paid $1.54 per option contract.
- At 10:45 a.m., a trader executed a call sweep near the ask of 935 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $150,535 bullish bet for which the trader paid $1.61 per option contract.
- At 10:45 a.m., a trader executed a call sweep near the ask of 356 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $58,740 bullish bet for which the trader paid $1.65 per option contract.
- At 10:45 a.m., a trader executed a call sweep near the ask of 425 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $72,250 bullish bet for which the trader paid $1.70 per option contract.
- At 10:45 a.m., a trader executed a call sweep above ask of 306 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $53,244 bullish bet for which the trader paid $1.74 per option contract.
- At 10:45 a.m., a trader executed a call sweep near the ask of 234 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $41,625 bullish bet for which the trader paid $1.78 per option contract.
- At 10:45 a.m., a trader executed a call sweep near the ask of 265 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $52,735 bullish bet for which the trader paid $1.99 per option contract.
- At 10:45 a.m., a trader executed a call sweep near the ask of 739 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $150,756 bullish bet for which the trader paid $2.04 per option contract.
- At 10:45 a.m., a trader executed a call sweep near the ask of 416 Riot Blockchain options with a strike price of $28 expiring on July 23. The trade represented a $26,624 bullish bet for which the trader paid 64 cents per option contract.
- At 12:27 p.m., a trader executed a call sweep near the ask of 1,284 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $213,144 bullish bet for which the trader paid $1.66 per option contract.
- At 12:45 p.m., a trader executed a call sweep near the ask of 300 Riot Blockchain options with a strike price of $28 expiring on July 30. The trade represented a $52,500 bullish bet for which the trader paid $1.75 per option contract.
RIOT Price Action: Riot was trading down 2.84% at $28.05 at last check Friday.
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