Sentiment has been improving in the video-game industry, and the
bulls are shopping at GameStop.
optionMONSTER's Heat Seeker system detected the purchase of about
12,000 March 30 calls against no previous open interest. Those
contracts lock in the price where investors can buy stock in the
video-game retailer, and they can generate some
if shares push higher.
That occurred on Friday because the initial blocks of calls priced
for $0.20 when GME stood at $25.79. The stock inched higher to
$26.22 by the last option trade, an increase of less than 2
percent, but those calls doubled to $0.40 in that same period. (See
GME is a name that the bears have loved to hate: Short interest
stands near 50 percent of the float while the stock trades for less
than 10 times earnings--with no debt and a 4 percent dividend yield
to boot. But the video-game industry is coming back to life,
judging by recent moves in Electronic Arts, Take-Two Interactive
Software, and Activision Blizzard noted on
Total option volume in GME was quadruple its daily average, with
calls outnumbering puts by 25 to 1. Shares rose 2.56 percent on
Friday to finish the session at $26.06.
(A version of this post appeared on
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