GameStop and AMC Unusual Option Trading Before Rise
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Hey all,
This is the Unusual Whales Team, and today we have a special newsletter for you. We are going to walk you through the unusual trading activity that occurred in GameStop and AMC beforehand.
In today’s issue, we’re going to cover some unusual options activity that occurred in April 2024 through early May 2024, preceding the Gamestop, $GME, and $AMC rallies. There are numerous contracts that saw substantial volume as the stock prices rose, but we’re going to cover those that hit the tape well before the rally began.
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Traders Make Millions on options during the $AMC and $GME Rally
We all remember the 2020-2021 Gamestop $GME squeeze, when funds lost billions of dollars, apes made millions, and retail traders came together to push for market fairness. Since then, the communities had quieted down a bit. Until now, that is.
We first noted unusual options activity in Gamestop $GME on April 25, 2024 when nearly 3,000 contracts of the $25 call option expiring on May 17, 2024.
This marked the beginning of the action for this contract. Of the 2,915 contracts that transacted, 2,374 carried over into open interest the following day, confirming new positioning. On 4/25, the average fill price for the contract was $0.12 per contract while $GME transacted at $10.98 per share.
By the next trading day on April 26th, this trader was already looking at some solid profit. From their entry of $0.12, the contract transacted as high as $0.31 on 4/29; a 158% gain in just one trading day. However, we didn’t note any evidence of the trader exiting their position. On the contrary, someone bought more. A lot more.
On Friday, April 26th, 11,903 more contracts transacted; 94% of which did so at the ask price for an average fill of $0.28. The following trading day, we noted that 10,128 of those contracts carried over, once again confirming to us that new positions opened and stayed open. Over the next few weeks, the $GME rally commenced. Things really reached a head on May 13th, 2024.
Roaring Kitty, famous for his analysis and presence before and during the 2020-2021 $GME squeeze, had been gone for three years following the event. On 5/12, he tweeted for the first time in years. This caused the $GME stock price to go absolutely bonkers.
In the trading day following Roaring Kitty’s first public “appearance” in years, $GME rallied even further, from roughly $25 per share to a high of $38.28 the following trading day. Roaring Kitty continued to tweet periodically over the next day, and the response in $GME was clear:
By May 14th, $GME traded as high as $80 per share in pre-market trading. The original position we noted on the $25C 5/17/2024 seemed to have taken profit on May 13th, selling their position within a range of $7.42 and $13.00 per contract. Being conservative, they exited for at least a 6,000% gain (noted by the drop in Open interest on 5/14). This trader turned roughly $27k into over $2 million in just 3 weeks. The contract didn’t stop there, however, and reached a new high of $36.42 per contract; a 30,250% rise from the initial orders we noted at $0.12 back in April. Had this trader held, they’d have made over $10,000,000.
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Now, let’s take a look at the unusual activity on $AMC, notably the $5 call contract also expiring on May 17th, 2024. While the contract already had over 7,000 open interest, we noted small positions start building again on May 3rd. Things really took off on May 13th, however, when $AMC began rising from a price of $3.31 per share.
The initial, smaller positions that began on 5/3 filled at prices ranging from $0.05 per contract to $0.12 per contract. However, the brunt of positioning occurred on 5/13/2024 as $GME began its rally. Not to be shown up, on 5/13 $AMC jumped from a low of $3.15 per share to a high of $5.88 per share. Over 129,000 contracts transacted on the $5C that day, and of them, 19,193 contracts carried over into open interest, with fills ranging from $0.22 to $1.50; the average fill was $0.65.
During pre-market trading on 5/14, $AMC traded as high as $13.30 per share before falling back to open regular trading hours at $11.85. Come market open, the $5C 5/17/2024 traded as high as $6.55 per contract; a 5,441% gain from the May 3rd fills, and a 923% gain from the average fill price of contracts just the day prior.
Had the trader held, they’d have profited 25,000% on their trade, turning roughly $32,000 into $10,000,000. There was evidence, however, of a potential exit on 5/13 for a roughly 4,000% gain.
We’ll be on the lookout for any further developments in the $GME and $AMC meme rally!
Thank you as always for reading! I hope this article helps you understand how to speculate on options flow that suggests an intraday trade! Be on the lookout for more guides, walkthroughs, and Education on the Unusual Whales YouTube channel!
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NOTE: This post is not financial advice. The stock market is risky, and any trade or investment is expected to have some, or total, loss. Please do research before any trade. Do not use this information for investment decisions. Check terms on site for full terms. Agree to terms before considering this information.