IREN Plunges 9.9% Amid JPMorgan Downgrade and Unusual Options Activity – What’s Next?

Summary
• IREN’s stock nosedived 9.9% to $18.645, its lowest since May 2025
• JPMorgan downgraded IREN to 'Neutral' with a $16 price target
• Unusual options activity surges, with 117 contracts traded on the 17.5 put
• Intraday range of $2.295 highlights extreme volatility

IREN’s dramatic selloff has captured market attention as the stock collapses from its 52-week high of $21.54 to near $18.62. The move follows a JPMorgan downgrade and a surge in put options trading, signaling deepening bearish sentiment. With the stock now trading below its 30-day moving average of $17.58, investors are scrambling to decipher whether this is a short-term correction or a structural shift in the AI and Bitcoin miner’s trajectory.

JPMorgan Downgrade and Unusual Options Activity Trigger Sharp Selloff
IREN’s 9.9% intraday drop was catalyzed by JPMorgan’s downgrade to 'Neutral' with a $16 price target, a 20% discount to its previous close. This followed a week of mixed analyst ratings, including a 'Moderate Buy' from other firms. Simultaneously, unusual options activity spiked, with 117 contracts traded on the 17.5 put option (IREN20250829P17.5) and 142 on the 18 put (IREN20250829P18). These puts, with implied volatilities of 119% and 136%, reflect aggressive bearish positioning. The selloff also coincided with a 4.2% drop in IREN’s RSI to 80.2, indicating overbought exhaustion.

IT Services Sector Steady as IREN Falters Amid Downgrade
While IREN’s IT Services sector remains resilient, with IBM (sector leader) up 0.38%, the stock’s 9.9% drop starkly contrasts with broader sector stability. This divergence suggests the move is firm-specific rather than sector-driven. IBM’s modest gains highlight the sector’s focus on earnings momentum, whereas IREN’s struggles stem from valuation concerns and speculative options trading.

Options Playbook: High-Leverage Puts and Calls for IREN's Volatile Outlook
• RSI: 80.2 (overbought)
• MACD: 1.07 (bullish), Signal Line: 0.92
• Bollinger Bands: Lower band at $14.93 (critical support)
• 200-day MA: $10.95 (far below current price)

IREN’s technicals paint a mixed picture. While the 30-day MA at $17.58 offers near-term support, the 200-day MA at $10.95 suggests long-term bearish pressure. The stock is trading within its Bollinger Bands’ lower range, indicating oversold conditions. For options, two contracts stand out:

• IREN20250829P18 (Put): Strike $18, Expiry 8/29, IV 145.94%, Leverage 13.68%, Delta -0.363682, Theta -0.049441, Gamma 0.077926, Turnover $19,608
- High leverage and moderate delta position this put to profit from a 5% downside move (projected price $18.046). Payoff: max(0, $18.046 - $18) = $0.046 per share.
• IREN20250829P19 (Put): Strike $19, Expiry 8/29, IV 141.78%, Leverage 10.33%, Delta -0.447547, Theta -0.043300, Gamma 0.084499, Turnover $40,983
- Strong gamma and liquidity make this ideal for a sharper decline. Payoff under 5% drop: max(0, $18.046 - $19) = $0.954 per share.

Aggressive bears should prioritize the 18 put for its leverage and turnover, while the 19 put offers higher reward for a deeper breakdown. Both contracts benefit from elevated IV and gamma, amplifying sensitivity to price swings.

Backtest IREN Stock Performance
The backtest of Invesco Real Estate Income Trust (IREN) after a -8% intraday plunge shows favorable performance metrics. The 3-Day win rate is 48.63%, the 10-Day win rate is 50.32%, and the 30-Day win rate is 51.37%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest period was 18.32%, which occurred on day 59, suggesting that IREN can recover from significant intraday declines.

IREN at Crossroads: Watch $18.5 Support and Earnings Catalyst
IREN’s 9.9% drop has created a critical inflection point. The stock must hold above $18.5 to avoid testing its 200-day MA at $10.95. With the 18.5 put option (IREN20250829P18.5) showing 71.13% price change, short-term volatility remains elevated. Investors should monitor the August 28 earnings report, which could either validate the $16 price target or spark a rebound. Meanwhile, IBM’s 0.38% gain underscores the sector’s resilience, suggesting IREN’s move is idiosyncratic. Watch for a breakdown below $18.5 or a reversal above $20.90 to gauge the next phase.