Options Bears Pile on Remarkable GameStop Stock

The equity is already up over 515% in 2021

Deputy Editor
Jan 25, 2021 at 10:42 AM
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If you had "GME meteoric rise" on your bingo card for January 2021, take a bow. The shares of GameStop Corp. (NYSE:GME) are soaring this morning, building off of their recent explosion higher on the charts as GME traders and short sellers continue their epic battle. At last check, GME was up 87.6% today to trade at $121.94, and earlier traded at a new record high of $123.95.

To put this remarkable run in context, just two weeks ago GME was trading around $20. The shares boast a massive 515% lead on the new year, with a 2,160% bump over the last six months to boot. With a whopping 69% of GME's total available float sold short, its possible this torrid run is the result of shorts being squeezed out.

Meanwhile, the options pits have been bearish. This is per GME's 10-day put/call volume ratio of 1.02 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 92% of readings in its annual range, showing a strong penchant for puts relative to the last year. 

Today's options pits are seeing also leaning heavily bearish. Already, 218,000 puts have exchanged hands -- five times the intraday average with overall volume pacing for the 99the percentile of its annual range -- versus 145,000 calls. Most popular is the weekly 1/29 115-strike call, but the February 20 put is also in the running.

Lastly, it's also worth nothing that the stock's 14-day Relative Strength Index (RSI) stands at an absurdly high 88. This means that the equity is firmly in "overbought" territory, indicating that a short-term breather may be imminent.

 

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