Oil Meme Stock Draws Trading Frenzy in Out-of-the-Money Options
(Bloomberg) -- A Texas oil company that’s been the subject of social media speculation in recent weeks is seeing an explosion in trading of out-of-the-money call options, indicating retail traders are betting on another big jump in the shares.
Ring Energy Inc. is an industry minnow, selling an average of almost 9,500 barrels of oil in the third quarter. It shares have doubled in less than two weeks.
While the stock closed 7% lower Tuesday at $2.14 in New York, September $5 call options traded hands 82,540 times, an increase of more than 31,000% in volume from Monday. It was the eighth-most traded equity option of the day, according to data compiled by Bloomberg.
The frenzy is latest example of “meme” stocks attracting the interest of retail traders. The company has featured recently in numerous discussion threads on Reddit. Ring is also under pressure from its largest shareholder, energy investor Simon Kukes, to make changes. Ring didn’t immediately respond to a request for comment.
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