GameStop Call Options Attracted in $4.6 Million Bullish Bets Before Stock Popped

Luzi Ann Santos joined discussion · May 15, 2024 00:10

Could whales have foreseen the return of meme-stock guru Keith Gill, also known as Roaring Kitty, that fueled $GameStop (GME.US)$'s meteoric rise this week, or was it just pure luck?

While many financial giants who bet against GameStop are feeling the pain of a short squeeze, a few who placed a combined $4.65 million in bullish bets last week are benefiting from the return of the meme stock frenzy.

GameStop shares climbed 64% to $50.03 at 12:06 p.m. Tuesday in New York, extending its 74% jump a day earlier, as retail investors rushed to buy the stock after Roaring Kitty's post sparked a frenzy. That prompted a flurry of posts on $Reddit (RDDT.US)$'s WallStreetBets forum, with traders sharing screenshots of their returns on the stock and its options.

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Retail investors have been piling into the stock of a company that has been losing money since 2019. For the quarter ended April 30, analysts on average, expect it to report a first quarter loss of 12 cents, according to estimates compiled by S&P Capital IQ.

The biggest of the bullish bets posted by whales last week was a block trade for call options that give the holder the right to buy 219,000 GameStop shares at $10 each by the end of this week. The price of those call contracts surge to $43.12 a share as of 11:15 a.m. in New York, from the $6.85 a share the whale paid for the trade that was posted on May 9.

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Those calls are now worth $9.4 million, delivering hefty gains for the buyer who paid a $1.5 million premium for that trade, assuming the position was closed before today's extended rally.

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EZ_money : or cheated their way?

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Jinxin Liu : How did they even know beforehand?

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White_Shadow : well when the meme frenzy is over and all those retail investors realize $GameStop (GME.US)$ is garbage that has been losing $ since 2019 with a 2% revenue decline YoY

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liquidgold : Market manipulation hmmm

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Justford : 3 year leaps

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Wealth ProgresSIR : Whoa

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Luzi Ann Santos

Moomoo Senior News and Community Manager

Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.

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