Opendoor Shares Soar in Latest Meme Stock Rally: Why Investors are Buzzing Again!

Opendoor Technologies has recently caught the attention of retail traders, particularly those on Reddit. Last week, its stock price skyrocketed, tripling in just a few days. Many traders chasing meme stocks fueled this sudden surge.

On Tuesday, Opendoor shares rose over 14%, following a remarkable jump of more than 42% on Monday. Trading was so volatile that the stock faced multiple halts. This surge is notable, especially since Opendoor typically traded below $1 earlier this year. The stock peaked at $4.97 on Monday before closing the day at $3.21. Remarkably, it shot up by 590% just in July.

Kohl’s also drew interest, with its shares climbing over 28% on the same day. About half of Kohl’s available shares are sold short, adding to the excitement among traders.

A major factor behind this frenzy is the meme stock movement. The subreddit WallStreetBets, famous for its role in the GameStop rally, has made Opendoor one of its latest darlings. Hedge fund manager Eric Jackson, who invested in Opendoor, suggested that the stock could reach $82, which only boosted interest further.

Trade volumes for Opendoor exploded, with 1.9 billion shares exchanged on Monday—an increase of over 1,700% compared to the average. This surge was partly driven by short sellers, who often buy back shares to limit their losses when a stock price unexpectedly rises.

Experts at Bespoke Investment Group labeled Opendoor a “poster-child” for the recent boom in the options market. They noted that as the stock skyrocketed, total call open interest tripled. This surge in options trading can help drive prices even higher, creating a feedback loop of rising interest.

When Opendoor went public in 2020, it was riding the wave of a special purpose acquisition company (SPAC) trend coupled with the optimism surrounding low interest rates and the COVID-19 pandemic. The company uses technology to simplify real estate transactions, capitalizing on market dynamics.

Understanding this trend is vital, especially with one in four Americans investing in stocks at some point, according to a recent report by Gallup. The movement towards meme stocks indicates a shift in how retail traders engage with the market, often driven by social media sentiment rather than traditional financial metrics.

For those interested in more insights on market trends and stock movements, you can explore additional perspectives on CNBC.



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