Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

GameStop's Options Surge Signals 50% Rally Bet by Traders

Published Nov 28, 2023 15:40 Updated Nov 28, 2023 15:46
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. GameStop's Options Surge Signals 50% Rally Bet by Traders

Quiver Quantitative - In a resurgence of speculative fervor reminiscent of the 2021 meme stock rally, GameStop (NYSE:GME) is once again the focal point of traders' bets, as indicated by the surging volume of options trading. A specific call option for GameStop, set to expire on December 8th with a strike price of $20, witnessed a remarkable trading volume of 17,500 times by midday in New York. The nature of these trades, predominantly newly opened positions in small blocks, suggests that retail traders are driving this wave of optimism.

GameStop's position as a darling of the Wall Street Bets community, particularly during its staggering 2,700% surge in early 2021, is well documented. This new wave of interest, although seemingly smaller in scale, echoes the frenetic trading of that period. However, Daniel Kirsch, the head of options at Piper Sandler & Co., views the likelihood of a repeat performance skeptically. Despite the affordability of the Dec. 8 call options, priced between 6 to 21 cents each, Kirsch doubts a surge akin to the pandemic-driven boom.

The timing of these option trades is notable, as they precede GameStop's earnings report slated for December 6. The options market currently anticipates a 12% movement in GameStop's shares, a prediction that falls significantly short of the leap required for the Dec. 8 call options to be profitable. This gap between market expectations and the traders' bets on a 50% rally in GameStop's stock adds an element of high risk to these speculative positions.

The flurry of activity around GameStop's options trading highlights the ongoing allure of meme stocks among retail traders, even as market experts remain cautious about replicating past success. This episode serves as a reminder of the volatile nature of such investments and the unpredictable dynamics that can emerge in the trading of high-profile stocks like GameStop.

This article was originally published on Quiver Quantitative

GameStop's Options Surge Signals 50% Rally Bet by Traders
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email