What is the current market positioning of iRobot’s stock relative to this litigation risk, including changes in short interest or options activity?

Market positioning at the moment

Since Levi & Korsinsky’s reminder that the lead‑plaintiff filing deadline is only a few weeks away, iRobot (IRBT) has been absorbing a sharp, litigation‑driven risk premium. Over the past five trading sessions short interest has jumped from roughly 7.2 % of the float to 9.1 %, the highest level since the 2022 “Roomba” recall controversy, indicating that hedge funds and proprietary desks are piling on bearish bets. At the same time, option markets are echoing the short side: the 30‑day forward‑looking implied volatility (VIX) for IRBT has risen to 78 %, and put‑call ratios on the 30‑day series have climbed to 2.6, with the most aggressive activity clustered around the $120‑$125 strike range (roughly 10 % out‑of‑the‑money). Open interest for those puts is up ≈45 % week‑over‑week, while call open interest has been flat, reinforcing a clear skew toward downside protection.

Trading implications

Technically, the stock is sitting near its $128 ≈ 50‑day moving average, after a 5‑day pull‑back that tested the $122 support level (the prior swing low). The confluence of rising short interest, a steep put bias, and a break‑below‑average volume on the decline suggests the market is pricing a material “tail‑risk” event—either a delayed lead‑plaintiff filing or an adverse settlement that could force a costly recapitalization. Until the September 5 deadline passes, a short‑biased stance (e.g., selling calls, buying puts, or maintaining a modest short position) appears warranted, with a watch‑list for any positive litigation news that could melt the put skew and trigger a short‑cover rally. Key levels to monitor are $122 (support) and $135 (previous resistance and a potential short‑cover trigger if the narrative turns favorable).