GME has seen a surge in options volume during the past two weeks
The shares of GameStop Corp. (NYSE:GME) were last seen up 3.8% to trade at $32.10, and set to snap their longest losing streak since January. In its last eight losing sessions, GME shed more than 30%, with losses accelerating after the equity fell below the 260-day moving average on Aug. 19. Year-over-year, GameStop stock is down 37.5%, and on track for its worth month since April.
The recent downward movement from GME has stirred up quite the frenzy in the options pits. The equity landed at the number one spot 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, 2,480,255 calls and 1,197,431 puts were exchanged. The most popular during this time period was the August 45 call, followed by the 50 call in the same series.
More broadly, the penchant for bullish bets is nothing new. This is per GME's 50-day call/put volume ratio of 2.40 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands in the slightly elevated 79th percentile of its annual range, implying a preference for calls in the last 10 weeks.
For those wanting to join these options traders, now could be the ideal time. GameStop's Schaeffer's Volatility Index (SVI) of 100% sits in the 28th percentile of its annual range, meaning options traders are pricing in low volatility expectations for the time being. What's more, GameStop stock's Schaeffer's Volatility Scorecard (SVS) reading of 88 out of 100 means the equity tends to outperform said volatility expectations.
Short sellers remain firmly in control, with short interest up 12.6% in the last two reporting periods. The 59.91 million shares sold short make up 23.3% of the stock's available float, or over four days' worth of pent-up buying power.