GameStop's Latest Options Trade Yields $550K Windfall

A Surprising Profit from GameStop Options Trading

Recently, a trader capitalized on a shrewd GameStop (NYSE: GME) options trade that netted a remarkable profit of $550,000. This impressive gain came shortly after a noteworthy post from Keith Gill, popularly known as 'Roaring Kitty,' who has long been an advocate for the video game retailer.

Impact of Roaring Kitty's Post

The recent activity began when Gill shared a modified image from the classic 1999 movie 'Toy Story 2' on social media platform X. This post marked his first update in over two months, generating significant buzz among retail investors keenly following his insights.

Following Gill's post, GameStop's stock surged as much as 9% on that day, eventually stabilizing at a notable increase of 4%, reflecting the impact of his social media presence on the stock market.

Strategic Timing and Execution

Just before Gill’s tweet was published, a trader executed a substantial purchase of approximately 10,000 GameStop call options with a September 13 strike price of $22.50. This risky move involved an investment of around $1.74 million, made only 18 minutes prior to Gill's social media update.

Shortly after Gill’s tweet, this trader took advantage of the ensuing frenzy and sold two blocks of the options — each consisting of 5,000 contracts — for a total of approximately $2.29 million. Based on available data, it appears this trade significantly benefited from the heightened stock activity.

The Buzz Around Options Trading

Financial experts have shared insights about this trading behavior. Brent Kochuba, founder of SpotGamma, noted that the timing of these trades, particularly before a weekend with limited time until expiration, creates an environment demanding rapid market movement. Such strategies can raise questions and stir curiosity among market participants.

Previous Activities and Market Reactions

This isn’t the first time Gill's posts have stirred market movements. Earlier in the year, a seemingly innocuous post featuring a puppy led to speculation around Chewy (NYSE: CHWY), resulting in the stock hitting new highs. His actions often correlate directly with significant stock fluctuations, reinforcing his influence on retail trading behaviors.

Moreover, GameStop's saga is not without controversy. In a previous turn of events, investors complained against Gill regarding allegations of a 'pump-and-dump' scheme, a claim that was later withdrawn. Despite such complications, Gill remains a pivotal figure in the unfolding narrative of GameStop as a meme stock.

The Market's Response to Gill's Influence

On the day following Gill's latest post, shares of Chewy also experienced a rise of 1.5%, further reflecting the interconnected nature of these trades and social media provocations. Many investors continue to keep a close watch on Gill's posts, understanding the potential they hold for influencing stock performance.

Frequently Asked Questions

What was the profit made from the GameStop options trade?

The trader made a profit of approximately $550,000 from the GameStop options trade.

Who is Roaring Kitty?

Roaring Kitty, whose real name is Keith Gill, is a stock influencer known for promoting GameStop and has a significant following among retail traders.

How did Gill's post impact GameStop's stock?

Following Gill's post, GameStop's stock price increased as much as 9% during that trading day, illustrating his influence on the market.

What type of options did the trader buy?

The trader purchased about 10,000 GameStop call options with a strike price of $22.50.

Why is there speculation around Gill's posts?

Gill's posts have historically led to market movements, making investors curious about his influence on stock prices, further sensationalized by his previous actions linked to meme stock trends.

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