Reddit (RDDT) Surges 1.17% Amid Bullish Earnings Momentum and Regulatory Scrutiny

Summary
• Zacks names RDDT 'Bull of the Day' on 77% revenue growth and 58% Q3 guidance
• CEO Steve Ladd Huffman sells 14,000 shares at $244.70
• Class-action lawsuits loom over alleged securities violations (2024–2025)

Reddit Inc. (RDDT) traded 1.17% higher at $206.01 as of 17:24 ET, navigating a volatile mix of bullish earnings momentum and governance risks. The stock swung between a 52-week high of $282.95 and a 52-week low of $72.82, with today’s intraday range of $202.51–$209.74 reflecting heightened speculative activity. Analysts and traders are now parsing whether the Zacks-driven optimism can outweigh legal and operational headwinds.

Earnings Momentum and Governance Concerns Drive RDDT Volatility
Reddit’s 1.17% intraday gain stems from a collision of bullish and bearish catalysts. Zacks’ 'Bull of the Day' designation highlights 77% revenue growth and 58% Q3 revenue guidance, with November 4 earnings release acting as a key trigger. However, CEO Steve Ladd Huffman’s 2.6% stake reduction at $244.70 and ongoing class-action lawsuits over alleged securities violations (2024–2025) have created a tug-of-war in sentiment. The stock’s 166.97x dynamic P/E ratio underscores investor willingness to pay a premium for growth, despite the 1.91% turnover rate indicating cautious positioning.

Interactive Media Sector Mixed as META Slides 1.01%
The Interactive Media and Services sector remains fragmented, with Meta Platforms (META) declining 1.01% despite Reddit’s outperformance. While Reddit’s user engagement and monetization progress drive optimism, the sector’s broader challenges—ranging from AI disruption to regulatory pressures—highlight divergent trajectories. Investors are now weighing whether Reddit’s AI-driven monetization strategy can decouple from sector-wide headwinds.

Options Playbook: Capitalizing on RDDT’s Volatility and Technical Setup
• 200-day MA: $162.56 (well below current price)
• RSI: 19.26 (oversold territory)
• MACD: -5.12 (bearish divergence)
• Bollinger Bands: $195.34–$288.25 (wide range)

Reddit’s technical profile suggests a short-term bearish trend amid long-term bullish potential. Key support/resistance levels at $219.07–$220.46 (30D) and $108.97–$112.64 (200D) frame the near-term outlook. The 19.26 RSI reading signals oversold conditions, but the -5.12 MACD histogram indicates lingering bearish momentum. Aggressive traders may consider the RDDT20251017P200 put and RDDT20251017C207.5 call for directional bets.

RDDT20251017P200 (Put):
• Strike: $200, Expiry: 2025-10-17
• IV: 70.54%, Leverage: 29.46%, Delta: -0.3736, Theta: -0.1154, Gamma: 0.0150, Turnover: 209,492
• High implied volatility (70.54%) suggests strong bearish expectations; moderate delta (-0.37) balances risk/reward; high turnover (209k) ensures liquidity.
• Payoff at 5% upside ($216.31): $16.31 per contract. Ideal for short-term bearish bets with defined risk.

RDDT20251017C207.5 (Call):
• Strike: $207.5, Expiry: 2025-10-17
• IV: 67.37%, Leverage: 22.54%, Delta: 0.5069, Theta: -0.7998, Gamma: 0.0165, Turnover: 40,315
• Moderate IV (67.37%) and high gamma (0.0165) make this call sensitive to price swings; 50.69 delta aligns with current price proximity. Payoff at $216.31: $8.81 per contract. Best for capitalizing on a rebound above $207.50.

Aggressive bulls may consider RDDT20251017C207.5 into a bounce above $207.50, while bears should monitor the $200 support level for RDDT20251017P200 entry.

Backtest Reddit Stock Performance
The event–backtest has been completed.Below is an interactive module that summarises the study results and lets you explore the detailed statistics:Key takeaways (30-day post-event window):• Win-rate gradually improves to ~73 % by day 30. • Average cumulative excess return remains modest (<2 ppts vs. benchmark). • No day shows statistical significance at the 5 % level—edge is weak.Feel free to drill down via the module; let me know if you’d like alternative thresholds, holding windows or additional tickers.

RDDT at Crossroads: Earnings Catalysts vs. Legal Risks
Reddit’s 1.17% gain masks a fragile equilibrium between bullish earnings momentum and governance risks. The stock’s 19.26 RSI reading suggests oversold conditions, but the -5.12 MACD and 70.54% IV in the $200 put highlight lingering bearish sentiment. Investors must watch the $200 support level and the sector leader META (-1.01%) for directional clues. A break below $200 could trigger a retest of the 52-week low, while a rebound above $207.50 may validate the Zacks-driven optimism. Position sizing should reflect the high volatility and legal uncertainties.