On Wednesday, the trading volume of some short-term options contracts surged. Some market participants believed that Keith Gill, known as Roaring Kitty, the leading retail investor, may have sold some of the company's recently disclosed options positions.$GameStop (GME.US)$Gamestop's stock price fell 16.5% at the close of trading on Wednesday. As of press time, it has risen 2.95% before the market opens. The stock has risen about 45% this year.
Gill helped fuel the "Meme stock" phenomenon in 2021. As shown in a screenshot he recently posted on Reddit on June 2nd, he held a large number of GameStop stocks and options positions. The screenshot shows that he held 120,000 GameStop call options with a strike price of $20 on June 21st, with a contract purchase price of $5.68, totaling $68.1 million. The screenshot also shows that he held 5 million GameStop shares on June 2nd, worth $115.7 million.
About 93,000 GameStop call options for June changed hands on Wednesday, with some being blocks of 5,000 contracts or more. Reuters cannot independently confirm whether these contracts have been sold or whether Gill is trading behind the scenes.
According to trade alert data, considering Wednesday's trading volume, the average fill price of these contracts is $7.65. In addition, several trades were settled at prices below the purchase price, indicating that the seller may be trying to sell these contracts.
Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, commented: "(It looks like) he's unwinding." "Although he hasn't finished unwinding, if he wants to, he probably has enough cash now to exercise the remaining contracts."
According to trade alert data, the volume of GameStop options traded on Wednesday surged to 1.2 million contracts, 66% higher than the daily average volume of the past month.
Gill's options positions have fluctuated significantly in the last few trading days, with the value of his options positions soaring to as high as $341 million and a brief loss of $7.5 million on Tuesday.
Since Gill disclosed his options positions, options market participants have been closely monitoring them. Steve Sosnick, chief strategist at Interactive Brokers, said, "We need to wait until tomorrow morning to see the data on open interest, but I cannot imagine anyone liquidating so heavily at such a discount."
According to calculations by Reuters, based on the closing price of $6.40 per contract, Gill's 120,000 contracts were worth $76.8 million at the closing price, an increase of approximately $8.7 million from the purchase price.
Gamestop's stock price fell 16.5% at the close of Wednesday, and as of this writing, rose 2.95% pre-market. The stock has risen about 45% this year.
Edited by Jeffrey