The stock has seen a surge in options volume during the past two weeks
Since the retailer's earnings miss several weeks back, the shares of GameStop Corp. (NYSE:GME) have been middling on the charts. The stock has found some support at the 60-day moving average, though today's negative price action -- GME is down 5.8% at $193.05 at last check -- has the equity breaching the formerly supportive 20-day moving average for the first time since late-August.
Meanwhile, GameStop's early September earnings report has stirred up quite the frenzy in the options pits. The equity landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the past two weeks, with new names added to the list highlighted in yellow. In the past 10 days, 243,120 calls and 136,066 puts were exchanged. The most popular during this time period was the September 210 call, followed by the 220 call in the same monthly series.
This bullish sentiment among options traders has been par for the course. Looking a bit further out, in the past 10 weeks, 2.11 calls were picked up for every put at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This reading stands in the slightly elevated 67th percentile of its annual range, implying calls are being picked up at a quicker-than-usual clip.
For those wanting to join these options traders, now could be the ideal time. GameStop's Schaeffer's Volatility Index (SVI) of 87% sits in the 2nd percentile of its annual range, meaning options traders are pricing in extremely low volatility expectations for the time being. What's more, GME has tended to outperform these expectations, per its Schaeffer's Volatility Scorecard (SVS) of 97 out of a possible 100. Historically, this has been a good thing for buyers.