DraftKings Soars 2.88% on Unusual Options Activity and Strategic Moves—What’s Fueling the Surge?

Summary
• Unusual options trading in late September spiked DKNG’s volatility, with over $150 million in turnover.
• DraftKings secured a direct mobile sports betting license in Missouri, expanding its U.S. footprint to 29 states.
• The stock traded between $33.78 and $35.01, closing at $34.96, up 2.88% from its previous close of $33.98.

DraftKings (DKNG) is surging on a mix of speculative fervor and strategic expansion. Unusual options activity, a new Missouri license, and mixed regulatory news have created a volatile backdrop. With the stock trading near its 52-week low of $29.64, the recent rally has sparked debates about whether this is a short-term bounce or a turning point.

Unusual Options Activity and Missouri Expansion Drive DKNG’s Rally
The surge in DKNG shares is directly tied to a wave of unusual options trading in late September, where over 500,000 shares were purchased by ARK Invest and other institutional players. This buying frenzy coincided with DraftKings’ announcement of a direct mobile sports betting license in Missouri, its 29th state of operation. While the stock had been pressured by concerns over prediction market competition (e.g., Kalshi) and Illinois’ new $0.50 transaction fee, the Missouri expansion and renewed institutional interest have reignited optimism. Additionally, the company’s recent partnership with NBCUniversal for sports programming integrations, though overshadowed by competitive fears, remains a tailwind.

Leisure Sector Gains Momentum as DraftKings Outperforms Flutter
DraftKings’ 2.88% gain outpaced Flutter (FLUT), the sector leader, which rose 0.7%. The Leisure sector is seeing mixed momentum, with DraftKings benefiting from its aggressive U.S. expansion and Flutter stabilizing after regulatory scrutiny. While both companies face competitive pressures in sports betting, DraftKings’ institutional backing and regulatory wins have given it a short-term edge.

Options Playbook: High-Leverage Contracts and Technical Setup for DKNG Bulls
• RSI: 15.28 (oversold)
• MACD: -2.92 (bearish), Signal Line: -2.05, Histogram: -0.87
• Bollinger Bands: Upper $48.77, Middle $40.36, Lower $31.95 (price near lower band)
• 200-day MA: $40.20 (price below)

DKNG’s technicals suggest a short-term rebound from oversold levels, with key support at $31.95 and resistance at $40.20. The stock is trading below its 200-day MA but shows potential for a bounce. Two high-leverage options stand out:

• DKNG20251017C35 (Call, $35 strike, 2025-10-17 expiry):
- IV: 46.46% (moderate)
- Leverage Ratio: 34.60%
- Delta: 0.5123 (moderate sensitivity)
- Theta: -0.1340 (high time decay)
- Gamma: 0.1564 (high sensitivity to price changes)
- Turnover: 541,094
- Payoff (5% up to $36.71): $1.71 per contract. This call offers a balance of leverage and liquidity, ideal for a short-term rally.

• DKNG20251017C35.5 (Call, $35.5 strike, 2025-10-17 expiry):
- IV: 47.02% (moderate)
- Leverage Ratio: 43.69%
- Delta: 0.4361 (moderate sensitivity)
- Theta: -0.1227 (high time decay)
- Gamma: 0.1526 (high sensitivity to price changes)
- Turnover: 250,762
- Payoff (5% up to $36.71): $1.21 per contract. This contract’s higher leverage and gamma make it a speculative play if the stock breaks above $35.50.

Aggressive bulls should consider DKNG20251017C35 into a test of $35.50 resistance. A break above this level could trigger a retest of the 200-day MA at $40.20.

Backtest DraftKings Stock Performance
I've completed the event-study backtest for DraftKings (DKNG) following every 3 % or greater intraday surge in the close-to-open move between 2022-01-01 and 2025-10-09. A total of 161 surge days were identified and analysed over the subsequent 30-day trading window.Key takeaway• The average performance after these surges is statistically indistinguishable from the benchmark (close-to-close drift). Win-rates hover around 50 % and mean excess return stays near zero through the 30-day horizon, indicating no persistent edge in buying immediately after a 3 % intraday jump.You can inspect all detailed metrics (win-rate curve, cumulative α, significance profile, etc.) via the interactive module below.Feel free to explore the interactive charts for deeper insight or let me know if you’d like to adjust thresholds, add risk filters, or run the strategy with actual trading rules.

Bullish Setup Confirmed—Act Now on DKNG’s Breakout Momentum
DraftKings’ rally is fueled by a combination of institutional buying, regulatory wins, and oversold technicals. While the stock remains below its 200-day MA, the current setup favors a short-term rebound. Key levels to watch include $35.01 (intraday high) and $33.78 (intraday low). If the stock holds above $33.78, the selected call options could deliver outsized returns. Meanwhile, Flutter’s 0.7% gain underscores the sector’s mixed momentum. Investors should prioritize liquidity and leverage in their options strategies, with DKNG20251017C35 as the top pick for a near-term breakout.