Robinhood Markets Plummets 3.4% Amid Volatile Intraday Move: What's Driving the Selloff?

Summary
• HOOD trades at $99.50, down 3.44% from $103.05 close
• Intraday range: $93.36 low to $100.18 high
• Turnover surges to 31.68M shares (4.28% turnover rate)

Robinhood Markets (NASDAQ: HOOD) is under pressure in post-market trading, with a sharp intraday decline capturing attention as the stock trades below its 52-week high of $113.44. The stock's 61.2x P/E ratio and recent technical divergence suggest a mix of long-term optimism and short-term caution as traders parse mixed signals from the options market and sector dynamics.

Options Volatility and Technical Divergence Fuel Selloff
The 3.44% intraday decline in HOOD reflects a combination of technical divergence and elevated options market activity. While the stock remains in a long-term bullish trend above its 200-day moving average of $53.06, short-term bearish momentum is evident through the MACD crossover below the signal line (-0.96 histogram) and RSI at 56.8, indicating potential overbought conditions. The options market reinforces this bearish bias, with 10 of 20 August 8th expiration contracts showing price change ratios exceeding 50%, suggesting aggressive shorting or hedging activity.

Options Playbook: Capitalizing on Volatility with Strategic Positioning
• Technical Indicators:
- 30D MA: $95.75 (above current price)
- 200D MA: $53.06 (far below)
- RSI: 56.8 (modest overbought)
- MACD: 5.71 (bearish crossover)
- Bollinger Bands: $91.40 (lower bound) vs $110.89 (upper bound)

Trading Setup: HOOD is testing key support levels with a bearish bias. The 200-day MA at $53.06 remains a critical long-term floor, while the 30-day MA at $95.75 offers near-term resistance. With the T-Rex 2X Long HOOD ETF (ROBN) down 7.01% and Defiance Daily Target ETF (HOOX) down 6.11%, leveraged players should monitor these instruments for directional bias.

Top Options Plays:
1. HOOD20250808C100
- Call Option
- Strike: $100
- Expiration: 2025-08-08
- IV: 62.28% (elevated volatility)
- LVR: 28.75% (moderate leverage)
- Delta: 0.5002 (at-the-money sensitivity)
- Theta: -0.4816 (accelerating time decay)
- Gamma: 0.0435 (high sensitivity to price moves)
- Turnover: 3.21M (liquid)
- Payoff Analysis: 5% downside to $94.53 would result in $0 intrinsic value. However, the high gamma and moderate delta position this option to respond sharply to price swings near the $100 strike.

2. HOOD20250808P95
- Put Option
- Strike: $95
- Expiration: 2025-08-08
- IV: 63.43% (high volatility)
- LVR: 55.27% (strong leverage)
- Delta: -0.2917 (moderate bearish bias)
- Theta: -0.0321 (moderate time decay)
- Gamma: 0.0367 (good responsiveness)
- Turnover: 1.35M (liquid)
- Payoff Analysis: A 5% drop to $94.53 would yield $0.47 intrinsic value. The combination of high leverage ratio and reasonable delta makes this put option a compelling bearish play with defined risk.

Trading Outlook: Aggressive bulls may consider the HOOD20250808C100 call into a bounce above $100.50, while bears should target the HOOD20250808P95 put on a breakdown below $95. The options market's elevated volatility and the stock's technical divergence create a high-probability setup for directional trades with defined risk parameters.

Backtest Robinhood Markets Stock Performance
The backtest of HOOD's performance after an intraday plunge of at least -3% shows favorable short-to-medium-term gains. The 3-Day win rate is 50.51%, the 10-Day win rate is 51.74%, and the 30-Day win rate is 51.94%, indicating a higher probability of positive returns in the immediate aftermath of such events. The maximum return during the backtest period was 9.01%, which occurred on day 59, suggesting that while there is some volatility, HOOD can exhibit strong recovery rallies following significant dips.

Critical Juncture for HOOD: What to Watch in the Next 48 Hours
The immediate outlook for HOOD hinges on its ability to retest the $95.75 30-day moving average as a near-term support level. With the sector leader Charles Schwab (SCHW) down 2.3% and the broader market digesting Trump's tariff announcements, investors should monitor volume patterns and the options market's implied volatility response. The top options plays highlighted offer clear risk-reward profiles, but traders must remain vigilant for potential catalysts like earnings updates or regulatory news. Action Alert: Watch for a breakdown below $95 to confirm the bearish bias, with the Defiance ETF (HOOX) serving as a directional barometer for leveraged positions.