Trade Idea - Short Put on RDDT

Disclaimer: The trades discussed in this blog reflect the author's personal strategies and decisions. These are not financial advice and should not be considered recommendations to buy, sell, or hold any financial instruments. The author is not a licensed financial advisor. Options trading carries significant risk, and readers should perform their own research or consult a qualified financial advisor before making any investment decisions. Past performance does not guarantee future results.

I've had Reddit (RDDT) on my watchlist for a while, mostly because the volatility never seems to fully calm down. Even now, with the tape relatively orderly, IV rank is sitting north of 60%, elevated enough that the premium on the put side is paying well above what the current price action would suggest it should. On a high-beta name like this, that gap between realized movement and priced-in movement is where I want to be a seller, not a buyer.

The Trade

Here's the trade:

• Sell 1x RDDT 17 Jul 2026 $125 Put @ $1.82
• Breakeven: $123.18

For reference, here is the current price chart of RDDT:

RDDT is trading around $170 after working off the spike to roughly $280 earlier in the year. The important thing for me is that the stock is sitting comfortably above its 200-day moving average, the longer-term trend is still pointed up, and the recent pullback looks more like a reset than a breakdown. My $125 strike lands well underneath the current consolidation and below the lower Bollinger Band, with around 27% of room between spot and the line in the sand. That's a strike I'm happy to defend.

Also, I really like RDDT cycle here. The timing windows I track are lining up on the bullish side here, suggesting the next meaningful leg is more likely up than down. The momentum picture agrees with that read (MACD has curled back higher and the slow stochastic has turned up sharply), so I'm not fighting the chart to put this on. When the trend, the cycle, and momentum all point the same direction, I'd rather collect premium than wait for a "perfect" entry that usually never shows.

As always, I've logged the trade in my trade log.