Vinco Ventures Inc (BBIG) Stock News and Forecast: Are call options the main driver here?

Vinco Ventures keeps venturing higher as the new retail favourite closed another 6% up on Thursday. The stock has been taking over social media this week, and the performance has matched with BBIG pushing up from $8 to above $12 this week. A 50% gain is not too shabby even for a meme stock and for now this one is doing exactly as many retail traders had hoped for. We should add a note of caution here before going any further. This is a highly speculative type of trading and is not for everyone. This is not traditional buy-and-hold investing or fundamental type investing akin to Warren Buffet. This is speculation, so it is of paramount importance to know your risk and use appropriate risk management. We always like to advocate for the use of stops at FXStreet, but options are also a good way to manage risk, assuming you are buying them. The premium is then your only risk. 

Speaking of options, BBIG was among the list of most active stocks across the entire US equity universe on Thursday in terms of options volume. According to Barchart.com, Vinco Ventures (BBIG) options were the fourth most traded on Thursday with over half a million options contracts changing hands. Only AAPL, AMC and TSLA traded more options on Thursday. Also good to note that 87% of the options traded were calls with just 13% puts. Highly likely that those calls were being bought by retail traders keen to get in on the move. This could lead to another gamma squeeze, which has become a more familiar term in the meme stock world. The higher the price of BBIG shares goes the more options market makers have to buy stock to hedge their short call positions. Just be careful. Eventually, a gamma squeeze leads to an inflection point, and the exact opposite happens. BBIG option volume and option open interest is running at more than double their 30-day average. 

Social media mentions of BBIG have also gotten more positive on Thursday if the latest Refinitiv social media data is to be examined. While examing this sort of data is extremely volatile with a huge and varied data source, it is nonetheless interesting. Social media mentions of BBIG peaked on Wednesday but were still high on Thursday and remain higher than last week's levels. There is a correlation, but it is more for information purposes only as tracking social media mentions and sentiment is extremely difficult. Just use it for information, not for any trading strategy. 

BBIG stock forecast

Again we want to emphasis how volatile this one is and to trade carefully and use stops or risk maangement. Technical analysis on something so volatilie is difficult with levels blasted though on regular occassions. Looking at the 15-minute chart since the price breakout last week shows $8 is the point of control, which is the price with the highest amount of volume. A small trend line has formed from the low on August 31 across to the low on September 3. The Volume Weighted Average Price (VWAP) for the week is at $10.40. Tuesday's move higher from $8 up to $11 has seen a period of consolidation since with the range tightening between $10 to $11.