$GME call prices head higher

$GME call prices head higher

by

Bullish option traders are turning a barrel of gains in short-term positions on GameStop (GME) today.

On Apr. 25Market Rebellion’s Unusual Activity Service found that 5,600 May $11 calls were bought for $0.72 to $1.08 with shares at $10.54. Volume was well above the strike’s open interest of 4,567 contracts, indicating that this was clearly fresh buying.

Those calls have sold for as much as $44.00 today, a 3,974.07% return, while the stock rose 421.82% in the same time period, underscoring how options can far outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

GME was last up 70.34% at $51.87.

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