Where did the money for the $180M GameStop position come from?
Doing the math to see if Keith Gill might have made $200 million in May. It doesn’t quite add up.
Last we knew, Keith Gill aka TheRoaringKitty aka DeepFuckingValue (DFV) had about $35 million to his name, as of April 2021.
How did that turn into more than $200 million in stock, options, and cash, per the update posted Sunday evening on Reddit?
Well, it’s impossible to know for sure. But doing some quick math shows how difficult it is to ascribe of all of those would-be gains to last month’s frenzy in shares of GameStop, the gaming and collectibles retailer, and in particular from prescient option positions that expired on May 17.
Let’s assume that:
On a per-strike basis, DFV’s positions were equal to the lesser of:
Roughly 80% of the increase in open interest across the 12, 15, 20, 25, and 30-strikes from April 22 through May 10, or
Cumulative volume in each strike from the time open interest peaked through May 16.
The volume-weighted average price (VWAP) from April 22 through May 10 is a proxy for the cost of each position, while the WVAP during certain periods in the week ending May 17 is used to determine the selling price.
No options were held to expiry and exercised.
All activity is on-exchange.
Only trades that are at least 100 lots in size matter for this analysis.
That leaves us with a net profit of $126.5 million. Huge, to be sure. But still well shy of the $180 million in GME stock and call options in Sunday’s update from DFV.
Of course, a ton of different things could account for this discrepancy. DFV could have been a bigger buyer of options than is estimated, diversified in different strikes, and had a lower buying price than the average participant and a much higher selling price.
Or simply, not all of the account’s position can be attributed to bullish bets made on GameStop in the past month.
