Trading volume in Rocket (NYSE:RKT) stock has been shooting sky-high this morning after the company announced… nothing at all. Despite nothing newsworthy being reported by the mortgage company, the stock saw as much as a 10% boost today. What’s happening behind the scenes might have some big implications for further gains.
The last few days have brought some huge news, with bank stocks free-falling. The losses are triggered as investment firm Archegos Capital Management defaulted on margin calls late last week.
A handful of banks have exited positions in the aftermath. After an off-loading of $20 billion worth of positions, banks like Credit Suisse (NYSE:CS) are expecting brutal hits on their first-quarter reports.
How does this influence RKT stock? Naturally, some r/WallStreetBets sleuthing has found a potential connection causing the upswing in value.
Redditors Speculating Archegos’ Effect on RKT Stock
Earlier this morning, a Redditor posted some speculation regarding RKT stock. In sum, they theorized that Archegos, which we now know held some pretty sizable positions, has been shorting RKT. Now that Wall Street is processing the fallout and the block sales, r/WallStreetBets bulls are hoping to see shorts cover their positions.
The claim is evidenced by movement in both RKT and the SPDR S&P 500 Trust (NYSEARCA:SPY), which the Redditor also believes Archegos was short-selling. Because RKT stock moved in tandem with the SPY ETF, some on r/WallStreetBets are buying into the argument. Other social media users are sharing similar theories, including reports that Morgan Stanley (NYSE:MS) was involved in block sales of RKT.
RKT stock saw a 10% boost earlier, surpassing the $26 mark. It is now settling back down to just over 1% gains in intraday trading. However, trading volume is still very high at 40 million, far above the average trade volume of 13 million.
To be clear, this speculation stems from a single Redditors’ post, and while it has some compelling information, it should be taken with a grain of salt.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.