Buy Call RKT

August 27, 2024
Buy the Rocket (RKT) March 20 Calls (exp. 3/21/2025) for $3.80 or less.

Having been on the sidelines with new buys for the last couple weeks as the market has fallen apart, then came roaring back, and is now chopping around, I’ve been building a watchlist of the best-looking stocks throughout this period. And on the top of that watchlist for stock strength has been Rocket (RKT) which has been steadily rising for the past several months, and is trading just short of its 52-week high today.

And while the stock strength is very impressive, what also has me intrigued is the bullish option activity, including these trades made yesterday:

Buyer of 2,700 Rocket (RKT) March 25 Calls for $2.10 – Stock at 21

Buyer of 2,700 Rocket (RKT) March 24 Calls for $2.35 – Stock at 21

And while RKT stock can be very volatile, and could be due to cool off if the interest rate story changes gears again, I really like this setup, and we are going to get involved with the stock today.

To execute this trade you need to:

Buy to Open the RKT March 20 Calls

The most you can lose on this trade is $380 per call purchased, should RKT close below 20 on March expiration.

The risks I see in this trade are largely overall market, and interest rate related.

And while there is risk in chasing RKT near 52-week highs, and this trade is going to have its ups and downs as the stock is wild, IF RKT is in the relative early innings of a stock run, to pay $3.80 for an in-the-money March call is a great risk/reward opportunity.