Why GameStop Stock Options Popped Recently

Options traders bombarded GameStop stock after its pullback from annual highs

Deputy Editor
May 2, 2022 at 12:49 PM
facebook X logo linkedin


A mid-March earnings report saw meme stock GameStop Corp. (NYSE:GME) fly up the charts, with the stock nabbing an annual high of $199.41 by March 29. In the subsequent month, GME has managed to cool off to around 20% below it's year-to-date breakeven level. Last seen down 5.3% to trade at $118.30, the equity is on track to log its fifth-straight close below its 50-day moving average.   

GME Chart May 2

The recent downward movement from GME has stirred up quite the frenzy in the options pits. The equity landed on Schaeffer's Senior Quantitative Analyst Rocky White's list of S&P 400 (SP400) stocks that have attracted the highest weekly options volume within the past two weeks. In the past 10 days, 363,727 calls and 228,018 puts were exchanged, putting GME second on White's list. The most popular during this time period was the weekly 4/29 2,500-strike put, followed by the 2,400-strike put in the same series. 

MAO Chart May 5

While calls outpaced puts on an absolute basis in the last two weeks, there's a clear put-biased amongst short-term options traders. This is per GME's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that stands in the slightly elevated 71st percentile of its annual range, implying a preference for puts recently.

For those wanting to join these options traders, now could be the ideal time. GameStop's Schaeffer's Volatility Index (SVI) of 97% sits in the 18th percentile of its annual range, meaning options traders are pricing in extremely low volatility expectations for the time being.

As is the case with most meme stocks, short sellers remain firmly in control. Short interest increased 15.3% in the last reporting period, and the 14.13 million shares sold short make up 22% of the stock's available float, or over three day's worth of pent-up buying power. 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI