Market Rebellion co-founder Jon Najarian is holding call options on GameStop Corp (NYSE:GME) through the company’s earnings report, he said Wednesday on CNBC’s “Fast Money Halftime Report.”
Najarian’s Thesis: There isn’t a lot of volume on the stock ahead of its earnings report, but the options activity shows traders are expecting about a 13% move, Najarian said.
The implied volatility of the options contracts is about 30% lower than it was the last time GameStop reported quarterly earnings, he said.
Related Link: GameStop Forms Bullish Pattern Heading Into Earnings: Will This Time Be Different?
The setup is similar to the one that Najarian saw ahead of Walt Disney Co’s (NYSE:DIS) earnings. When Disney reported its financial results on Aug. 12, the stock popped on the company’s top and bottom-line beat.
“Have [traders] not put enough into the possibility of a bigger move? We’ll see tonight. That’s why I’m willing to hold these calls,” Najarian said.
GameStop is set to announce its second-quarter financial results after the market closes today.
GME Price Action: GameStop has traded as high as $483 and as low as $5.87 over a 52-week period.
The stock was down 1.31% at $196.40 at the time of publication.
Photo: StockSnap from Pixabay.
