Chegg Plummets 11% Intraday: What's Fueling the Selloff?

Summary
• Chegg (CHGG) trades at $0.9425, down 11.08% from its $1.06 previous close
• Intraday range spans $1.05 high to $0.8441 low, signaling extreme volatility
• Sector leader Pearson (PSO) declines 1.15%, hinting at broader education sector pressure
• Options chain shows 329.67% implied volatility on November 21 $1 call, suggesting aggressive short-term positioning

Chegg’s dramatic intraday collapse has ignited a frenzy in options markets and technical indicators. With the stock trading near its 52-week low of $0.4401 and dynamic PE at -0.96, the move reflects a confluence of bearish momentum and speculative positioning. Traders are now scrutinizing key support levels and options activity to gauge the next catalyst.

Bearish Technicals and Options Volatility Drive Sharp Decline
The 11.08% intraday drop in Chegg aligns with a short-term bearish trend confirmed by its K-line pattern and MACD (-0.0911) crossing below the signal line (-0.0571). RSI at 42.06 suggests oversold conditions, while the stock trades near its 200-day moving average ($1.1865) and lower Bollinger Band ($1.0148). The options chain reveals aggressive short-term positioning, with the November 21 $1 call option showing 78.57% price change and 329.67% implied volatility. This suggests institutional players are either hedging against further declines or capitalizing on the sharp move through leveraged call options.

Education Sector Suffers as Pearson Trails Chegg's Slide
While Chegg’s 11.08% decline dwarfs Pearson’s 1.15% intraday drop, both stocks reflect broader sector weakness. Pearson’s -1.15% move aligns with its role as the education services sector leader, but Chegg’s collapse suggests idiosyncratic factors—likely technical exhaustion and options-driven volatility—rather than sector-wide catalysts. The lack of sector-specific news (e.g., U.S. Department of Education updates) further isolates Chegg’s move to its own fundamentals and speculative activity.

Options Volatility and Technicals Signal Aggressive Short-Term Plays
• 200-day MA: $1.1865 (below current price)
• RSI: 42.06 (oversold)
• Bollinger Bands: $1.0148 (lower) to $1.5835 (upper)
• MACD: -0.0911 (bearish)
• Key support/resistance: 30D ($1.2544–$1.2722), 200D ($1.3991–$1.4267)

With Chegg near its 52-week low and RSI in oversold territory, traders should monitor the $0.8441 intraday low as a critical support level. The options chain reveals two high-conviction plays:

• CHGG20251121C1 (Call, $1 strike, Nov 21 expiry):
- Implied Volatility: 329.67% (extreme)
- LVR: 3.72% (moderate)
- Delta: 0.6114 (high sensitivity)
- Theta: -0.0077 (rapid time decay)
- Gamma: 0.5478 (high sensitivity to price moves)
- Turnover: $3,420 (liquid)
This call option offers leveraged exposure to a potential rebound above $1, with gamma and delta suggesting strong responsiveness to price swings. A 5% downside scenario (to $0.8954) would yield a payoff of $0.00 (strike not breached).

• CHGG20260417C1 (Call, $1 strike, Apr 17 2026 expiry):
- Implied Volatility: 130.47% (moderate)
- LVR: 3.10% (moderate)
- Delta: 0.6477 (high sensitivity)
- Theta: -0.00099 (slow time decay)
- Gamma: 0.4536 (moderate sensitivity)
- Turnover: $3,090 (liquid)
This longer-dated call provides time decay protection while maintaining directional exposure. A 5% downside scenario would yield a payoff of $0.00 (strike not breached).

Aggressive bulls may consider CHGG20251121C1 into a bounce above $1.05, while risk-averse traders should watch the $0.8441 support level for a potential reversal.

Backtest Chegg Stock Performance
Below is an interactive Event-Backtest dashboard that summarises Chegg’s (CHGG) price behaviour after –11 % (or larger) one-day plunges from 2022-01-01 to 2025-11-03. The module lets you scroll through key metrics (win-rate curve, average excess return vs. benchmark, optimal holding window, etc.).Key take-aways:• Only 3 qualifying –11 %+ plunges occurred during the period. • Short-term follow-through was poor: median event return ≈ –5 % over the first week, underperforming the benchmark. • Mean reversion appeared after ~18 trading days, turning cumulative returns mildly positive, but statistical significance remained low given the tiny event count. • Practical implication: a mechanical “buy-the-dip after –11 %” strategy on CHGG since 2022 would not have offered a reliable edge; risk-adjusted pay-off is weak due to sparse signals and high post-event volatility.Feel free to explore the dashboard, and let me know if you’d like sensitivity tests (e.g., different plunge thresholds or holding windows) or a broader universe analysis.

Act Now: Chegg's Technicals and Options Signal High-Risk, High-Reward Setup
Chegg’s 11.08% intraday drop has created a volatile but potentially lucrative setup for traders. With RSI in oversold territory and options volatility spiking, the stock is primed for a sharp reversal or continuation move. Sector leader Pearson’s -1.15% decline suggests broader education sector caution, but Chegg’s technicals and options positioning indicate a more isolated catalyst. Immediate focus should be on the $0.8441 support level and the November 21 $1 call option’s liquidity. Watch for a breakdown below $0.8441 or a surge in options volume to confirm the next directional move.