Why Options Bulls Are Targeting SoFi Technologies Stock

The stock is trending on stocktwits.com after a $180 million unregistered block sale

SoFi Technologies Inc (NASDAQ:SOFI) is up 9.2% to trade at $6.74 at last check, amid reports that U.S. President Joe Biden could today announce a decision to forgive some student loan debt. The online bank, which finances student loans, is also trending on stocktwits.com following news that J.P. Morgan and Goldman Sachs facilitated the roughly $180 million unregistered block sale of SOFI, offering 29.95 million shares at about $6 each.

Options bulls are blasting the security today, So far, 90,000 calls have crossed the tape, which is triple the intraday average, as opposed to 19,000 puts. Most popular is the 8/26 7-strike call, where new positions are now being opened, followed by the 6.50-strike call in the same weekly series.

This penchant for bullish bets has been the norm lately, according to SOFI’s 10-day call/put volume ratio of 5.66 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 86% of readings from the past 12 months. This means calls have been picked up at a much quicker-than-usual pace.

Now sure seems like the perfect opportunity to bet on the equity’s next moves with options. This is per SOFI’s Schaeffer’s Volatility Scorecard (SVS) of 77 out of 100, which suggests the security has usually outperformed these volatility expectations.

Short sellers have already started to hit the exits, but with plenty of pessimism left to unwind, shares could surge even higher. The 130.43 million shares sold short account for 18.8% of SoFi Technologies stock’s available float, or more than three days’ worth of pent-up buying power.

On the charts, the equity is today bouncing off a familiar floor at the $6 level, after the $8.50 region turned down a rally earlier this month. Despite being up 24.4% quarter-to-date, SOFI still carries a 58.3% deficit for 2022.