There’s a surge in demand for GameStop call options that need a Roaring Kitty Redux
A 300%+ rally in a month?!?
GameStop 3.0 in the works? Well, there’s some options-market activity hinting at that possibility.
Most notably, near the close on Monday, we saw a massive flurry of trades in GameStop calls with a strike price of $125 (that is, about 315% above its current price) that expire on January 17. These all appear to be new positions (based on the corresponding increase in open interest) and most took place on the ask, suggesting the buyer was the more motivated party than the seller in these transactions.
Thirty-one days to expiry for a rally in excess of 300%? That’s something that’s only happened to GameStop during two periods: the first half of 2021 — the initial meme-stock mania and its echo booms — and the sequel that took place in the second quarter of this year.
Of course, you don’t need options to be in the money to profit from an options position; there are many scenarios where these calls could potentially be flipped for a tidy profit in the near-term even with the stock still well shy of even the $100 mark.
But it’s certainly noteworthy that there’s clear interest in exposure to another GameStop mania in the near term. That particular strike has more open interest than any other GameStop option for that expiry. And this kind of buying activity to set the table, so to speak, is what we saw from Keith Gill, aka Roaring Kitty, in late April before the Q2 spike in the stock kicked into high gear.
