RDDT Call Spread Sees 15% Gain After $1.7M Bet—What Do Technicals and Market Signals Suggest?
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A high-volume Reddit (RDDT) options call spread trade locked in a quick 15% gain after the stock leapt 6.16 points. Let’s break down the trade, examine why traders may have targeted this spread, and explore how RDDT’s technical and option market indicators are lining up.
Trade Structure and Performance: Call Spread Posts Quick 15% Return
On August 1, 2025, a notable call spread on Reddit was executed at a volume-weighted average price (VWAP) of $12.42. As of 11:35 AM, the spread's price had climbed to $14.28, netting buyers an average gain of $1.86 per contract—equal to a 15.0% return in just over an hour. The profit followed a $6.16 surge in the underlying stock, which moved from $188.37 to $194.53 during this window.
| Trade Date | Expiration | Strike Range | Contracts | VWAP Trade Price | Stock Price (Trade Time) |
|---|---|---|---|---|---|
| Aug 01, 2025 | 01-Aug-25 | 172.5/187.5 | 2,798 | $12.42 | $188.37 |
The buyer committed over $1.7 million to this call spread, with a maximum potential gain of roughly $361,000—assuming RDDT closes above $187.50 at expiration. This payoff profile means the buyer needs RDDT to remain at or above that strike level for the trade to achieve its full upside.
For more granular data or to analyze other multi-leg options trades like this, you can visit the RDDT multi-leg trade analyzer. To screen for similar call spreads and complex trades, check out the Market Chameleon Multi-Leg Option Trades Screener.
Technicals Are Strongly Bullish: RDDT Far Outperforms SPY Across All Timeframes
RDDT’s price action shows clear technical strength and sustained momentum. The stock finished at $194.53—up 21.13% on the day and an astonishing 296% above its 52-week low. Even more impressive, it is up 31.5% above its 20-day moving average and 46.1% above the 50-day average. The current uptrend is confirmed by all major moving averages.
| Duration | RDDT Return | SPY Return | RDDT Low | RDDT High |
|---|---|---|---|---|
| Today | +21.6% | -1.5% | 177.77 | 196.68 |
| 2 Weeks | +37.0% | -0.9% | 138.11 | 196.68 |
| 1 Month | +29.7% | +0.7% | 138.11 | 196.68 |
| 3 Months | +67.5% | +12.5% | 94.89 | 196.68 |
| 6 Months | -2.2% | +4.0% | 79.75 | 230.41 |
| 1 Year | +220.8% | +14.3% | 49.13 | 230.41 |
| YTD | +19.4% | +6.8% | 79.75 | 230.41 |
The stock is also outpacing the SPY ETF over every meaningful period—most notably, RDDT is up 220.8% over the past year compared to SPY’s 14.3%. This level of relative outperformance supports a bullish technical thesis and highlights why options traders might look to capture continued momentum.
Option Skew Indicator Flashes Bullish Sentiment
Options market signals are in agreement with technicals. The Market Chameleon proprietary skew indicator—analyzing 30-day implied volatility skew—registers a 77% rank, putting sentiment in the top quartile of bullish postures for the past year. This skew rank means option traders are assigning higher premiums to upside calls relative to puts, anticipating further gains or heightened demand for upside exposure.
Legal Headlines Are in the Mix, but Stock Stays Strong
One note for the risk radar: RDDT has made headlines for investor lawsuits related to claims of securities fraud tied to the impact of Google’s AI search on Reddit’s traffic and user growth. These legal and fundamental headlines, while causing volatility and dips in the past, haven’t disrupted the recent bullish run.
If you want more detail about the ongoing case, information is available at this law firm resource.
Takeaway: Is RDDT Setting Up for More Gains?
When large trades like this call spread appear alongside strong technicals and a bullish option skew, it’s a signal worth monitoring. The bet by this trader—risking $1.7 million for a $361,000 potential payout—suggests confidence that RDDT can remain above $187.50 into expiration.
While legal and headline risks remain, technical momentum and forward-looking market indicators still favor the bulls. If you want to find similar trades or do your own screening, explore the Multi-Leg Option Trades Screener to look for more setups like this in RDDT or other names.
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NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
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