GameStop Corp’s (NYSE:GME) stock proved Tuesday that the rocket ship it has been riding is not quite out of fuel. The stock soared, trading up more than 30% at one point in the afternoon.
GameStop wasn’t the only return high flyer, as AMC Entertainment (NYSE:AMC) also saw a nearly 30% gain. Traders with a heavy risk appetite scurried to buy call options in GameStop, betting that the stock would continue to reach new highs.
See Also: Learn and Trade Options Like a Pro
What To Know: Call options allow traders to purchase 100 shares of a stock at the predetermined “strike price.” Many traders prefer to trade options because the contracts are more volatile than common stock shares, allowing the traders to make more money in a short period of time.
Brad Weber, CEO of Trading Grounds, pointed out via Twitter that the $330 strike calls that expire this Friday (Aug. 27), are up to $9.35 a contract from $0.15 this morning. Quick math shows us that this contract was up more than 6,000% today!
According to Robinhood, the same contracts are currently up nearly 4,000% on the day after GameStop started to pare some gains. The broker shows the lows of the contract at $0.09, with a high of $9.86. This means that if you bought the contracts at their lowest price, and some of them at their highest, you’d be looking at a return of 10,855.6%!
Photo: BentleyMall on Wikipedia.
