© Reuters. FILE PHOTO: People enter a GameStop store during “Black Friday” sales in Carle Place, New York

(Reuters) – Shares of GameStop Corp (NYSE:) rose 11% in early deals on Friday, as retail investors pushed up the stock in a renewed rally that could see it clock its second best week.

Options market activity in the stock, which has returned to the top of the list in a social media-driven retail trading frenzy, suggested investors were betting on higher prices or higher volatility, or both.

GameStop shares touched $120.60 and were on track to nearly triple this week in an equity market where falling bond prices have weakened general investor sentiment towards U.S. stocks.

Further support could come from holders of call options on the stock, as a big batch of those weekly contracts mature on Friday.

The stock is still some distance away from the $483 mark it hit in January, when individual investors using Robinhood and other trading apps drove a rally in its price, forcing many hedge funds that had bet against the video game retailer to cover short positions.

Refinitiv data on options showed retail investors have been buying deep out-of-the-money call options, which are options with contract prices to buy far higher than the current stock price.

Many of those option contracts are set to expire on Feb. 26, and would mean handsome gains for those betting on a further rise in GameStop’s stock price.

Call options which would be profitable for holders if GameStop shares reach $200 and $800 this week have been particularly heavily traded, the data showed.

Meanwhile, GameStop’s Frankfurt listing shed 21.3% to trade at 98.19 euros, in a move that almost entirely saw its value converge with that of the U.S.-listed stock, which added nearly a fifth in value on Thursday.

Other Reddit favorites such as cinema operator AMC Entertainment (NYSE:), headphone maker Koss and marijuana company Sundial Growers (NASDAQ:) slid between 4.4% and 13.6% in trading before the bell.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *