Robinhood Markets Surges 1.7%—What’s Fueling This Frenzy Before Earnings?

Summary
• Robinhood (HOOD) reports Q2 earnings beating estimates by 35% on revenue and 105% on net income
• Net deposits hit $13.8B, total platform assets jump 99% to $279B
• Defiance Daily Target 2X Long HOOD ETF (HOOX) surges 2.98%

Robinhood’s stock surges 1.7% intraday amid a blockbuster Q2 earnings report, outpacing a flat brokerage sector. The fintech giant’s 45% revenue growth and 2.3M funded customer increase have ignited a buying frenzy, with its price climbing from a 14.5% discount to the 52-week high to within $0.25 of the peak. The Defiance 2X ETF amplifies the move, while options activity suggests short-term volatility ahead.

Q2 Earnings Beat Sparks Bullish Momentum
Robinhood’s Q2 results ignited a 1.7% intraday surge, driven by a 45% revenue increase to $989M and 105% net income growth to $386M. The company’s 99% year-over-year jump in total platform assets to $279B and 10% funded customer growth to 26.5M underscore its expanding market share. Earnings per share (EPS) of $0.42 blew past the $0.31 estimate, while transaction-based revenue surged 65% to $539M. The 3.5M Robinhood Gold subscribers—up 76%—and $6B July net deposits further validate its momentum. These metrics, coupled with a 13.8% price-to-earnings ratio expansion, position HOOD as a breakout story in the fintech sector.

Brokerage Sector Rally Gains Steam as Robinhood Outpaces Schwab
The Brokerage Services sector, led by Schwab (SCHW), saw mixed performance. While HOOD surged 1.7%, SCHW dipped 0.12%, reflecting divergent investor sentiment. Schwab’s 0.11% decline contrasts with Robinhood’s 180% YTD rally, highlighting HOOD’s stronger growth narrative. The Defiance 2X ETF (HOOX) amplifies HOOD’s move, surging 2.98% as leverage plays into the stock’s volatility. This outperformance stems from Robinhood’s aggressive crypto expansion, tokenization initiatives, and superior Q2 metrics, which position it as a disruptor in a sector dominated by incumbents.

Options and Leveraged ETFs Offer High-Volatility Play in HOOD’s Rally
• RSI: 61.58 (neutral) • MACD: 6.15 (bullish) • 200D MA: 52.67 (far below price) • Bollinger Bands: 110.69 (upper), 100.89 (middle) • Kline Pattern: Short- and long-term bullish

HOOD’s technicals suggest a continuation of its rally, with key support at $101.39 and resistance at $110.69. The Defiance 2X ETF (HOOX) offers leveraged exposure, but its 2.98% gain underscores the stock’s volatility. For options, HOOD20250808C106 and HOOD20250808C107 stand out:

• HOOD20250808C106: Call, $106 strike, 2025-08-08 expiry, IV 61.76%, leverage 22.68%, delta 0.5637, theta -0.4978, gamma 0.0379, turnover 540,323. High gamma and moderate delta suggest strong price sensitivity. A 5% upside to $113.32 yields a $7.32 payoff.
• HOOD20250808C107: Call, $107 strike, 2025-08-08 expiry, IV 63.93%, leverage 24.55%, delta 0.5258, theta -0.4903, gamma 0.0371, turnover 497,359. Balanced risk-reward with high liquidity. A 5% upside yields a $6.32 payoff.

Aggressive bulls should target HOOD20250808C106 into a break above $106.50, while conservative buyers may scale into HOOD20250808C107 on a pullback to $105.

Backtest Robinhood Markets Stock Performance
The backtest of HOOD's performance after an intraday surge of at least 2% indicates positive short-to-medium-term gains, with win rates and returns improving across various time frames:1. 3-Day Win Rate and Return: The 3-day win rate is 55.51%, with an average return of 1.16% during the backtest period. This suggests that approximately half of the time, HOOD experiences a positive return in the three days following an intraday surge of at least 2%.2. 10-Day Win Rate and Return: The 10-day win rate increases to 58.32%, with an average return of 2.77%. This indicates a higher probability of positive returns over a slightly longer period, suggesting that the momentum from an intraday surge can persist.3. 30-Day Win Rate and Return: The 30-day win rate is 57.11%, with an average return of 7.32%. This shows that even over a longer period, HOOD tends to experience positive returns following an intraday surge, although the win rate is slightly lower than the 10-day period.4. Maximum Return: The maximum return observed during the backtest was 14.00%, which occurred on day 59 after the initial surge. This highlights the potential for significant gains if the momentum from the intraday surge is sustained.In conclusion, an intraday surge of at least 2% in HOOD typically leads to positive returns over the short to medium term, with the effect being strongest in the first few weeks. However, the returns tend to taper off over the longest 30-day period, suggesting that while there is still a higher probability of positive returns, the magnitude of those returns decreases over time.

Robinhood’s Rally Gains Legs—Act Before Earnings Call
HOOD’s 1.7% surge on Q2 outperformance and tokenization buzz suggests the move is far from over. Key levels at $106.50 and $110.69 will determine momentum, with the 52-week high ($113.44) as the ultimate target. The sector leader, Schwab (SCHW), fell 0.11% today, underscoring HOOD’s disruptive edge. Investors should watch the earnings call at 5 PM ET for guidance on crypto expansion and regulatory progress. For leveraged exposure, HOOX’s 2.98% gain highlights the ETF’s role in amplifying HOOD’s volatility. Aggressive buyers may chase HOOD20250808C106 if $106.50 breaks, while patient traders can target HOOD20250808C107 on a dip to $105.