GameStop stock has struggled after earnings in the past
GameStop Corp. (NYSE:GME) is preparing for the release of its second-quarter earnings, due out after the market closes tomorrow, Sept. 8. Below we will take a look at how the video game retailer has fared on the charts, and dive into what the options market is pricing in for the stock's post-earnings move.
GameStop stock is down 1.4% at $199.70, and testing support at the 80-day moving average, which put pressure on the shares in July and August. Still, thanks to this year's meme stock craze, GME has flourished, adding 957.5% year-to-date. Longer term, the security boasts an incredible 2,508.4% year-over-year lead.
Moving onto GME's earnings history, the specialty retailer has closed lower the day after reporting in all of the past eight quarters, save one, in which it staged a meager 2.2% rise in June 2020. Over the past two years, the shares have swung an average of 15.9% the day after earnings, regardless of direction. This time around, the options market is pricing in a much larger 20.3% swing for Thursday's trading.
Digging into options, data at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows GME with a 10-day call/put volume ratio of 3.08, ranking in the 80th percentile of its annual range. In other terms, calls have been bought over puts at a faster-than-usual pace during the past two weeks.
GameStop stock premiums can be had for a bargain at the moment. This is per the security's Schaeffer's Volatility Index (SVI) of 117%, which sits higher than just 8% of readings from the past 12 months. What's more, its Schaeffer's Volatility Scorecard (SVS) stands at a relatively high 82 out of 100, indicating the equity has exceeded options traders' volatility expectations of the past year -- a boon for buyers.