OptionsHouse

Options Trading News

February 11, 2013  Mon 5:14 AM CT

GME: SEE CHART GET CHAIN FIND STRATEGIES
Sentiment has been improving in the video-game industry, and the bulls are shopping at GameStop.

optionMONSTER's Heat Seeker system detected the purchase of about 12,000 March 30 calls against no previous open interest. Those contracts lock in the price where investors can buy stock in the video-game retailer, and they can generate some nice leverage if shares push higher.

That occurred on Friday because the initial blocks of calls priced for $0.20 when GME stood at $25.79. The stock inched higher to $26.22 by the last option trade, an increase of less than 2 percent, but those calls doubled to $0.40 in that same period. (See our Education section)

GME is a name that the bears have loved to hate: Short interest stands near 50 percent of the float while the stock trades for less than 10 times earnings--with no debt and a 4 percent dividend yield to boot. But the video-game industry is coming back to life, judging by recent moves in Electronic Arts, Take-Two Interactive Software, and Activision Blizzard noted on researchLAB.

Total option volume in GME was quadruple its daily average, with calls outnumbering puts by 25 to 1. Shares rose 2.56 percent on Friday to finish the session at $26.06.

(A version of this post appeared on InsideOptions Pro on Friday.)
Share this article with your friends


Related Stories

GME

Bearish plays targeting GameStop

May 18, 2015

The game retailer, which has been trading in an increasing tight range for the last month, is scheduled to report quarterly results on May 28.

OptionsHouse

Premium Services

Archived Webinar

Education & Strategy

Short synthetic stock

With the use of the calls and puts we can not only create Long Synthetic Stock, but Short Synthetic Stock as well...

View more education articles »