Opendoor Soars Over 121% Intraday, Emerges as the Latest Meme Stock, Trading Volume Surpasses Meta

TradingKey - On Monday, July 21st, shares of real estate tech company Opendoor skyrocketed as much as 121% intraday, before closing up 42%. Trading was halted at one point due to extreme volatility. This marks the sixth consecutive day of gains for Opendoor, with a cumulative increase of 312% over this period and a staggering rise of 502% for the month.

Opendoor has become the newest "meme stock" in the U.S. market, drawing fervent attention from retail investors and reigniting the battle between individual traders and Wall Street. 

Data reveals that Opendoor's trading volume on Monday reached 1.9 billion shares, nearly 10% of the entire day's trading volume in the U.S. stock market. Its trading value even surpassed that of Meta, whose market capitalization is nearly 1,000 times larger.

Even more dramatic than the stock itself was its performance in the options market. Opendoor's call option volume exceeded 2 million contracts on Monday, marking the third-highest single-day call option volume for an individual U.S. stock this year. As call options were heavily purchased, market makers bought the underlying stock—Opendoor shares—to hedge their risks, pushing the stock price higher rapidly.

The latest surge was fueled by Eric Jackson, founder of Toronto-based hedge fund EMJ Capital, who endorsed the stock on social media platform X, predicting its price could exceed $80 in one to two years.

Between last Monday and Tuesday, page views related to Opendoor on Stocktwits, a U.S. investor social platform, surged by 400%. On Monday, Opendoor was ranked as the most actively traded stock on the platform.

Analysts are comparing the current retail investor frenzy to the internet bubble of 1999. Matt Maley, Chief Strategist at Miller Tabak + Co, noted the similarities in the movements of new meme stocks to those during that era, with Opendoor's rise being particularly notable.

This phenomenon is reminiscent of the "retail vs. Wall Street" battle four years ago, when U.S. retail investors fervently chased meme stocks, leading to dramatic spikes in speculative stocks like GameStop and AMC.

Industry experts caution that the wild behavior of Opendoor and other meme stocks in the stock and options markets often disconnects from the companies' fundamentals. According to FactSet data, since its IPO in December 2020, Opendoor has not reported a profitable fiscal year. Before the latest surge, the stock had already fallen 51% year-to-date.