GameStop Faces Big Money With Short Calls That Could Gain From Share Slump
Whales sold a combined $11.7 million in short positions on $GameStop (GME.US)$ that could benefit if the shares slump below $20 before the contracts turn into so-called zero-day-to-expiration (0DTE) options.
As of 10:42 a.m. Thursday, nine block trades were posted, each carrying a premium of more than $1.2 million. The sellers sold a combined 9,000 contracts that give the holders the right to sell a total of 900,000 shares of GameStop at $20 each by the time the market closed tomorrow.
Big money is shorting the stock amid its meteoric rise in the first two days of the week that sent GameStop soaring almost three-fold. That party was fueled by the return of meme stock guru Keith Gill, known as "Roaring Kitty," to social platform X for the first time in three years.
Over the weekend, "Roaring Kitty" posted an image of a man leaning forward in his chair, a meme popular among gamers that signals things are starting to get serious, according to Reuters. That ignited retail investor interest, sparking the meteoric rise of GameStop shares that have been languishing below $20 after sinking from a high of more than $103 reached in early 2021.On Tuesday,
Last Tuesday, GameStop shares soared to $64.83, the highest intraday level since November 2021, before retreating. By 1:03 p.m. in New York on Thursday, shares retreated to $29.94 $down by more than half from this week's peak.
Another four block trades, with a combined premium of $4.56 million was posted on short bets that the stock could fall below $25 by tomorrow. The short calls cover 700,000 shares.
Despite the 23% share price slump today, seven of the 15 technical indicators tracked by moomoo are still showing that GameStop is oversold, and the trend remains bearish. Only one is leaning bullish and the rest are neutral.
About 11.9 million GameStop shares were sold short on Wednesday, down from 26.8 million on Tuesday, when the price peaked.
Leave us your comments below on why you're bullish or bearish.
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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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104698683 : never
White_Shadow : $GameStop (GME.US)$ is garbage, this is simply meme shenanigans. had rearing kitty not pumped it it wouldn't have done anything much, business wise $GameStop (GME.US)$ is lightweight garbage. hasn't made a profit since 2019, revenue decrease of 2% yoy
Lavelle Smith : understand completely
Jamesjinlin : Everyone knows it's hype; the question is whether retail investors still have the same confidence this time around. Moreover, the agency's bears won't be as unprepared as the last time. The previous two days of boosting were also empty stories. Cut lots of chives. So let's not hope this time is the same as last time.
Stock Perault : Still searching for popular key influencers posting sites.
Dramericanjesus : fucking looooooool! There is no reality where this hits 400 a share again. The liquidity is no where near what it was in 2021.
Ali Farahbakhsh White_Shadow : That is true but it’s sure nice to make money off of it!
Parkway_Drive21 White_Shadow : Roaring Kitty had nothing to do with the price movement. This was entirely due to institutions. They simply pinned the blame on him and you believed it. I have a bridge to sell you.
White_Shadow Parkway_Drive21 : rt, you got it all figured out. because that's what reddit(another meme that has never made a profit)told you
Essam : In Hebrew
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