GameStop options bet that the stock will reach US$800 on Friday

GameStop options bet that the stock will reach US$800 on Friday
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(Feb 26): Shares of GameStop Corp. doubled yesterday and jumped another 19% today. Options traders think the stock can do much better than that.

The most-active option traded on the stock Thursday was a contract betting that GameStop shares would spike to US$800 on Friday. Some 52,000 contracts changed hands during the session betting on this one-day gain of 636%

For other options traders, it was a question of when GameStop would hit the $800 mark, not if. The seventh and eighth most-active contracts were call options wagering that the stock would reach US$800 by next Friday or in three weeks. It’s hard to say whether the contracts were mainly bought or sold, two traders said.

“It’s speculation gone wild, pure and simple,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. “It is Exhibit A in the nuttiness that is associated with GameStop.”

GameStop’s Reddit-driven roller-coaster ride that roiled markets last month is continuing this week, with shares more than doubling in the final 90 minutes of trading on Wednesday and rising as much as 101% on an intraday level on Tuesday. The rally came as popular tech names from Tesla Inc. to Zoom Video Communications Inc. were battered after U.S. 10-year Treasury yields spiked to 1.6%.