2 Stocks Making Major Moves After Robinhood Restrictions

Both stocks have seen meteoric rises to begin 2021

Deputy Editor
Feb 1, 2021 at 10:34 AM
facebook twitter linkedin

GameStop Corp. (NYSE:GME) and AMC Entertainment Holdings Inc (NYSE:AMC) are arguably the two most prominent names on the list of eight stocks facing restrictions on the Robinhood trading platform, following an epic battle between retail investors and short sellers. The stocks have experienced absurd rallies, paired with unprecedented volatility, to kick off the new year, but both are reacting quite differently in response to trading limitations this morning. 

GME is down 26.3% to trade at $213 at last check, but still boasts an incredible year-over-year rise of 6,957%. The equity is recently removed from a Jan. 28 all-time high of $483, and it's hard to say what move GameStop stock will take next. Meanwhile, short interest is down 13.2% in the most recent reporting period, though the 61.78 million shares sold short represent 60.4% of the stock's available float, or nearly three days' worth of pent-up buying power. 

GameStop puts are extremely popular today. In the first hour of trading, over 79,000 puts have exchanged hands -- double the intraday average -- versus 19,000 calls. Most popular by far is the January 2022 0.50-strike put, followed by the April 0.50-strike put.

AMC, meanwhile, was last seen up 25.5% to trade at $16.69, and has managed a 663.2% rise already in 2021. The security is fighting back toward nearly three-year highs of $20.36, but short interest is still building, up 17.3% over the last two reporting periods. The 44.67 million shares sold short still make up an incredible 85.8% the stock's available float.

AMC stock's options pits are seeing a flurry of activity from both sides of the fence. So far, 92,000 calls and 47,000 puts have crossed the tape, which is double the average intraday average. The weekly 2/5 40-strike call is by far the most popular, followed by the 20-strike call from the same series.




These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!


Common mistakes options traders make


Special Offers from Schaeffer's Trading Partners