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Updates to reflect start of regular trading
The meme trade redux is continuing Tuesday with sharp moves in the big names for the second session in a row.
GameStop (NYSE:GME) and AMC (NYSE:AMC) stocks open with big gains, with the former +98% and class A shares of the latter +121%.
Other meme names of yore are also rallying. Koss (KOSS) +58%, BlackBerry (BB) +22%, Clover Health (CLOV) +19% and Beyond Meat (BYND) +10% all higher.
GME shot up nearly 75% on Monday after being up more than 100% at one point with 175M shares changing hands. That’s more than 17x average daily volume. The stock is up 174% in May.
Keith Gill, known as Roaring Kitty, lit the fuse this week when he tweeted for the first time in nearly three years indicating he was watching recent GME action.
In the past 20 hours he has now tweeted 11 more times, all video clips almost all with a fight theme, including Peaky Blinders, Gangs of New York, Snatch, Tombstone, X-Men Origins: Wolverine, V is for Vendetta and The Good the Bad and the Ugly. (The big exception being the post-credits scene in Ferris Bueller’s Day Off, but even that morphed into Breaking Bad.)
What does it all mean? That’s for the GME fans to decide, but the message from the recent moves is that meme is back for now with traders looking for both a short squeeze and a gamma squeeze (where call options writers are forced to buy stock amid sharp upwards moves, which in turn fuels buying pressure on the underlying stock).
David Boole, who specializes in equity derivatives at Baycrest Partners, said on CNBC that the groundwork for the gains this week had already been laid with options activity well before Roaring Kitty’s return tweet.
Boole said there was “a large amount” out-of-the-money GME calls bought from April 26 into the first week of may, with the strike price centered around $30 (about 70,000 of the May 30 calls traded over the last two to three weeks).
