Real estate tech firm Opendoor Technologies (OPEN) has surged back into the market spotlight with shares soaring roughly 560% over the past three months. The meteoric rally has invited comparisons to meme stocks, fueled in part by elevated short interest that underscores ongoing market skepticism.
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Behind the bullish thesis, Wall Street hedge fund managers are now actively promoting Opendoor, motivating retail investors to fuel the rally. Still, the surge isn’t entirely baseless—Opendoor shows solid fundamentals that could support further upside, particularly if upcoming rate cuts benefit the real estate sector, which has faced macroeconomic challenges in recent years.
Given the hype and momentum surrounding the stock, it should be treated as tradable material in the short term. There appears to be room for the rally to continue, especially with two key catalysts on the horizon. For now, a Buy rating seems appropriate, particularly if paired with a defensive strategy to capture potential gains while managing downside risk.
Opendoor’s Rally Driven by Momentum, Not a Short Squeeze
From a trading perspective, Opendoor shares have exploded in recent weeks, sparking speculation that it’s the next meme stock driving short squeeze-style moves like GameStop (GME) and AMC Entertainment (AMC) a few years ago. But for those new to the story, it doesn’t seem like cornering short sellers has been the main driver of OPEN’s recent performance.
Even though Opendoor has a high short interest, its recent surge isn’t necessarily a short squeeze. Data published on July 31st showed that 23.6% of the company’s float was sold short—about 150 million shares. However, by looking at the Days to Cover metric (how long it would take all shorts to close their positions based on average daily volume), it’s only one day. That means all short sellers could theoretically cover in a single day under normal conditions.
In other words, the short positions are relatively easy to close, so the risk of a proper short squeeze is low—assuming volume stays normal. Volume and price action also suggest that the recent rise isn’t just shorts closing sporadically—buyers are consistently stepping in.
OPEN’s volume oscillator confirms this, showing that short-term volume (12 days) is exceeding long-term volume (26 days). Price-wise, all moving averages, from short-term to long-term, signal Buy, confirming that the upward trend is steady and genuine.
This indicates that the stock’s price is being driven by new buyers entering the market, not by shorts being squeezed. It also shows that OPEN isn’t experiencing a small-scale “pump” where a few traders artificially inflate the price—the volume consistently supports the trend, proving that the move is real and broad-based.
Measuring the Heat on OPEN’s Rally
Evidently, after a nearly 70% jump driven by Fed statements recently, suggesting a likely rate cut, OPEN’s technical indicators have reached extreme levels, signaling caution.
Even though the growing volume in Opendoor shares shows that buying pressure remains strong, the technicals already point to overbought conditions. The Relative Strength Index (RSI), which measures the speed and intensity of price changes, is currently at 76. Readings above 70 indicate the price has risen too quickly and may be at risk of a correction, meaning buyers could start taking profits.
It’s important to note, however, that overbought doesn’t mean the price will drop immediately—it just increases the probability of a pullback. This is especially true considering Opendoor’s rapid adoption as a “cult stock” (not a meme stock), as defined by EMJ Capital founder Eric Jackson, who currently has an $80 price target on OPEN.
Upcoming Catalysts for OPEN Stock
Although a short-term correction seems likely, I believe there are still catalysts ahead—both company-specific and broader market factors—that could trigger new upward cycles.
The first, and perhaps most important, is the upcoming Federal Reserve rate decision. Market confidence in a 25-basis-point cut has jumped from just over 60% at the beginning of the month (after the Fed’s late July statement) to about 85% following Jerome Powell’s Jackson Hole speech, where he opened the door—no pun intended—to a potential cut at the September 16–17 meeting.
The second catalyst is the appointment of a new CEO, following former CEO Carrie Wheeler’s resignation on August 15, which came amid investor pressure. EMJ Capital’s Eric Jackson noted that he and the company’s co-founders are actively involved in the selection process. Once the right candidate—someone aligned with Jackson’s vision—is announced, it’s likely to energize OPEN’s cult following and be warmly received by the market.
Given the high volatility of Opendoor stock, looking at option chains shows an expected price movement of roughly 78% by the November 6 expiration (around its next earnings). In this context, a protective put strategy makes sense, as it can limit downside risk if the stock falls before or after the Fed meeting, which is in about 3 weeks.
Safeguarding Gains with a Protective Put
Here’s a potential trade opportunity for investors to consider. Ideally, OPEN stock is already owned or purchased now. Then, a slightly out-of-the-money put at a $4 strike (currently ~$0.73) can be bought, expiring shortly after the Fed meeting on September 19th. This creates a protective floor. If OPEN corrects—say, to around $3.80—the put offsets most of the loss, leaving the combined position worth about $4.00. Since the initial outlay is $5.26 ($4.54 for the stock + $0.73 for the put), the maximum downside is capped at roughly $1.27 per share, no matter how far OPEN falls below $4.
If the Fed cuts rates or the newly appointed CEO is positively received by the market and OPEN rallies, the $4 put expires worthless. The premium ($0.73) is lost, but the long stock participates fully in the upside.
Is Opendoor Technologies a Buy, Hold, or Sell?
On Wall Street, the consensus on Opendoor stock is currently quite bearish. Among nine analysts covering the stock over the past three months, only one is bullish, three are neutral, and the remaining five are bearish. OPEN’s average stock price target is currently $1.44 per share, implying a potential downside of more than 70% from the current share price.
Opendoor’s Momentum Could Last, But Protection Is Prudent
The Opendoor hype is very real, but it doesn’t necessarily fit the classic “meme stock” label, since recent movements don’t clearly reflect a short squeeze—or even an immediate possibility of one. While recent catalysts have fueled strong rallies in the shares, technical indicators point to a likely correction and potential loss of momentum.
However, upcoming events—such as the Fed’s next rate decision and the appointment of a new CEO aligned with shareholder expectations—could sustain momentum for a while longer. For these reasons, a Buy rating seems justified, ideally paired with an options protection strategy to manage downside risk from a trading perspective.