Webtoon Plunges 9%—Is This the Start of a Major Correction?

Summary
• Webtoon (WBTN) tumbles 9.8% intraday, breaking below $15 after a 73.6% rally in 2025
• Disney partnership and Q2 profit beat fueled a 80.6% surge two days prior
• 52-week high at $18.45 remains distant as RSI hits 78.31, signaling overbought conditions

Webtoon’s sharp selloff reflects a technical correction following a euphoric rally. The stock, which surged on a landmark Disney deal and better-than-expected earnings, now faces a critical juncture. With intraday volatility widening and options chains showing heightened bearish positioning, the question looms: Is this a buying opportunity or a warning sign of deeper turbulence?
Technical Overbought Conditions Trigger Sharp Correction
Webtoon’s 9.8% intraday drop stems from a classic overbought correction. The stock’s 80.6% surge two days prior—driven by a multi-year Disney partnership and a surprise Q2 profit—pushed RSI to 78.31, a level often preceding reversals. Analysts at Evercore ISI and Goldman Sachs had raised price targets, but the rapid ascent left the stock vulnerable to profit-taking. The pullback aligns with historical patterns: WBTN has experienced 38 moves of over 5% in the past year, underscoring its volatility. Today’s decline reflects market skepticism about sustaining momentum post-announcement, not a fundamental shift in the company’s prospects.

Interactive Media Sector Mixed as Webtoon Diverges
While Webtoon’s sector leader, Netflix (NFLX), edged up 0.43% intraday, the broader Interactive Media and Services sector showed no clear directional bias. The divergence highlights WBTN’s unique exposure to speculative momentum rather than sector-wide trends. With NFLX’s stable growth contrasting WBTN’s volatility, investors should focus on Webtoon’s technical setup rather than sector dynamics.

Bearish Options and ETFs Highlight Volatility Playbook
• 200-day average: $10.35 (well below current price)
• RSI: 78.31 (overbought)
• MACD: 0.98 (bullish divergence but weakening)
• Bollinger Bands: Price at $14.98, near upper band of $14.81

Webtoon’s technicals suggest a short-term bearish bias, with key support at $14.60 (intraday low) and resistance at $15.86 (intraday high). A 5% downside scenario to $14.23 could trigger further selling. For options traders, two contracts stand out:

• WBTN20250919P15 (Put):
- Strike: $15, Expiry: 2025-09-19
- IV: 86.91% (high volatility)
- Delta: -0.44 (moderate sensitivity)
- Theta: -0.0126 (moderate time decay)
- Gamma: 0.0965 (strong price sensitivity)
- Turnover: $26,139 (liquid)
- Leverage: 9.37%
- Payoff at 5% down: $0.77 per share. This put offers a balance of leverage and liquidity, ideal for a near-term bearish bet.

• WBTN20251219P17.5 (Put):
- Strike: $17.5, Expiry: 2025-12-19
- IV: 89.58% (elevated)
- Delta: -0.50 (strong sensitivity)
- Theta: -0.0083 (lower time decay)
- Gamma: 0.0504 (moderate sensitivity)
- Turnover: $3,120 (adequate)
- Leverage: 3.26%
- Payoff at 5% down: $2.57 per share. This deeper-out-of-the-money put offers higher reward potential if the selloff accelerates.

Action: Aggressive bears may consider WBTN20250919P15 for a near-term play, while WBTN20251219P17.5 suits those expecting a prolonged correction.

Backtest Webtoon Stock Performance
The backtest of WBTN's performance after a -9% intraday plunge reveals a mixed outlook for the ETF. While the 3-day win rate is relatively high at 53.91%, the 10-day and 30-day win rates are lower at 47.66% and 49.22%, respectively. This suggests that while the ETF may bounce back in the short term, longer-term returns could be more volatile. The maximum return during the backtest period was only 0.24%, indicating that even in the aftermath of a significant intraday plunge, WBTN did not generate substantial returns in the following days.

Webtoon’s Volatility Intensifies—Act Now or Miss the Rebound?
Webtoon’s 9% drop signals a pivotal moment for investors. While the stock remains 12% below its 52-week high, the technical overbought correction suggests a potential rebound if support at $14.60 holds. However, the options market’s bearish positioning and elevated IV indicate lingering risk. For context, sector leader Netflix (NFLX) rose 0.43% today, underscoring the divergence in momentum. Act now: Monitor the $14.60 level for a potential bounce or breakdown. If the selloff persists, WBTN20250919P15 offers a high-liquidity bearish play.