Key Points:
Despite a significant drop in GameStop Corp.’s shares on Wednesday, some options traders were still targeting a substantial rise this week.
Among the most popular call options were contracts with $100 and $128 strikes. These contracts suggested a potential near tripling or even quadrupling of the underlying stock by Friday.
Previously, the $128 contract had no open position, and the volume of the lower strike surpassed the number of existing positions.
Throughout the week, traders leaned towards more moderate contracts, aiming for around 15% increases rather than 200% rallies. However, Wednesday saw shares slump by as much as 35%, trimming some of the week’s early gains.
The Wednesday activity in far out-of-the-money calls was driven by a combination of buying and selling, according to Susquehanna International Group. These trades were mostly in small lots.
Readmore: Crypto Market Sees V-shaped Reversal: Perfect Time For Buyers?
The traded 11,000 contracts of $128 calls cost buyers about $375,000 in total premium, even with only a few days until expiration and a large jump needed to make them worthwhile.
According to Lookonchain, not all investors profited from GameStop’s volatile circumstances. Some individuals lost tens of thousands of dollars due to buying GameStop shares when prices were surging and panic selling after the price dropped.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
Crypto investors should get their hands on these promising tokens in the coming week
Discover the 50% bonus on BlockDAG coins celebrating their testnet launch success, alongside updates on…
The ETH price continues to suffer downward pressure due to the outflows from the Spot…
BlackRock’s iShares Ethereum ETF (ETHA) has exceeded $1 billion in assets, making it one of…
Canada extends crypto compliance deadline to the end of 2024, giving exchanges more time to…
This article will explore which cryptos are considered securities, and how you can navigate the…
This website uses cookies.