At Extreme Investor Network, we are dedicated to providing you with the most up-to-date and valuable information on finance and investing. Today, we want to discuss the recent sell-off in GameStop shares and its impact on call options held by the infamous Reddit user, “Roaring Kitty,” also known as Keith Gill.
As GameStop shares experienced a sharp decline in afternoon trading, there was a noticeable increase in trading volume for the call options owned by Roaring Kitty. These call options have a strike price of $20 and an expiration date of June 21. Interestingly, the trading volume for GameStop calls with the exact same strike price and expiration date surged to 93,266 contracts, significantly higher than its 30-day average volume of 10,233 contracts. The price of these contracts plummeted over 40% as the stock tumbled 16.5%.
While it is uncertain if Roaring Kitty was directly involved in this surge of trading volume, options traders believe that he may be behind it given his significant holdings of these contracts. Speculation arises on whether Gill will have to sell his calls before expiration or roll the position into another call option to avoid the need for a large amount of cash to exercise them on June 21.
For Gill to exercise these calls, he would require $240 million to acquire the stock at $20 per share, a sum larger than what is publicly revealed in his E-Trade account. With all eyes on Wall Street watching for any signs of him unloading his position, the potential impact on the stock price remains a point of interest for investors.
Stay tuned for more updates on this evolving situation and join us at Extreme Investor Network to stay informed on all things finance and investing. Remember, knowledge is power when it comes to navigating the world of finance.