Options Bulls Target Former Meme Stock

GME is surging off its recent lows

Deputy Editor
Nov 28, 2023 at 3:17 PM
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Former meme stock GameStop Corp (NYSE:GME) is seeing heavy call volume today. Up 8.5% at $12.92 at last glance, and without a clear catalyst, the stock's surge is likely the result of short selling, as short interest represents a hefty 22.5% of the stock's available float. 

So far today, 112,000 calls have crossed the tape -- five times the amount typically seen at this point -- in comparison to 22,000 puts. The weekly 12/8 20-strike call is the most popular, where new positions are being opened. 

The $12 region, home to GME's recent Nov. 13, two-year low of $11.82 has provided a floor on the charts for the past couple of days. The stock's 40-day moving average lingers above as pressure, however. On track for its fifth-straight monthly loss, GameStop stock is down 29.8% since the start of the year, and call traders appear to be taking advantage of the extended pullback. 

A broader look at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows GME's 10-day call/put volume ratio of 4.11 ranks higher than 90% of readings from the past year. This points to plenty of optimism in the options pits over the past two weeks as well. 

GME Nov28

 

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