The $2 million purchase of call options is seen as a bullish bet on dogecoin.
The contract will expire in 16 days, in which time DOGE has to rise by 31% to avoid expiring worthless.
Dogecoin last touched $0.22 in March, but hasn't surpassed that level since November 2021.
A trader bought $2 million worth of dogecoin {{DOGE}} call options at a strike price of $0.22 on Wednesday, according to Bernd Sischka, chief commercial officer at derivatives exchange PowerTrade.
DOGE is currently trading $0.166 and the call options purchased expire on June 14, which means that the popular meme coin will have to rise by more than 31% for the trade to be profitable.
Options are a derivative contracts that give buyer the right to either buy or sell an asset at a predetermined price before the contract expires. If the underlying asset doesn't reach the strike price, that contract will expire worthless.
The trade comes off the back of a bullish day across the meme coin sector following a sudden rise in the share price of Gamestop (GME), a meme stock that often moves in tandem with meme coins.
Dogecoin hit a local high of $0.22 in March, but hasn't surpassed that level since November 2021.
"I think altcoins have been lagging the recent run-up in ethereum and for most traders look at what ETH is doing and imply potential moves for altcoins," Sischka said. "The ETF apporval drove the ETH rally but I think with doge the wild card is that Elon Musk adds it to Twitter as some sort of payment currency."
After touching a low of $0.056 in October 2023, dogecoin has rallied by more than 195% as the crypto industry entered a bull market spurred by spot BTC ETF approvals in the U.S.
