The price of GameStop Corp (NYSE:GME) stock soared on Monday and continues to trade higher Tuesday thanks to several tweets from Keith Gill, aka Roaring Kitty, a central figure in the previous rise of GameStop's share price in 2021.
Options traders were looking at GameStop before Roaring Kitty's X account became active again.
What Happened: On Monday, the X account of Roaring Kitty shared 11 video clips from famous movies and hyped up investors with movie quotes showing wars, not leaving, something not being over and other items that could suggest a battle for GameStop investors is coming again.
Coincidentally, the X account of Roaring Kitty liked a post on the platform on Fri. May 10, suggesting his potential return to social media.
Options activity in GameStop began picking up in late April according to Unusual Whales, a well-known financial account on X.
"We've provided $GME, GameStop updates since April 24th, when unusual options flow started hitting. We will continue highlighting $GME's options. Right now $GME's $40 overnight price means its ENTIRE options chain is once again ITM. Last time that happened, $GME sky-rocketed," Unusual Whales tweeted on Monday.
Unusual Whales also highlighted a large trade made in GameStop options that may have turned into a multi-million dollar trade.
"Holy, this trader turned thousands into millions with GameStop, $GME. This $GME trader got $25 call contracts expiring 05/17/2024 at an average of $0.21, for $27K. They peaked at $13.63. Assuming he stayed in, this is a 6,400% return, turning $27k into over $2 million."
The $25 call options expiring 05/17 trade at $28.20 at the time of writing Tuesday adding more to the potential gains this trader would have if they were still holding.
Why It's Important: Unusual options activity can be a key indicator for investors ahead of a stock moving higher.
GameStop call option volume was around 300,000 on Friday, May 10, according to Bloomberg. This made that day the second most active day in 2024 for GameStop options, trailing only May 3.
GameStop has been trending on WallStreetBets on Reddit and StockTwits in recent weeks as volume in the options and shares has risen, according to the report.
Trading volume of GameStop stock last week hit levels last seen in April 2022 when meme stocks had a short revival and GameStop drew attention with an announced stock split.
"I find it quite interesting that the volume and open interest in upside calls expiring May 17th steadily rose during the week," Interactive Brokers Chief Strategist Steve Sosnick told Bloomberg. "It all seems a bit convenient."
GME Price Action: GameStop shares are up 55.41% to $47.40 on Tuesday. Shares hit new 52-week trading highs of $64.83 on Tuesday and traded around the $80 level in pre-market trading Tuesday morning.