Boston, MA – Market experts speculate that Keith Gill, also known as Roaring Kitty, may have sold off his GameStop options amid a surge in trading activities. Gill, who recently made a comeback to social media after years of absence, disclosed a substantial GameStop stock and options position on Reddit on June 2. This revelation included holding 120,000 GameStop June 21 call options at a strike price of $20, purchased at $5.6754 per contract, totaling $68.1 million.
The disclosed screen shot also revealed that Gill owned 5 million GameStop shares worth $115.7 million on June 2. On Wednesday, about 93,000 of the June call options were traded, some in significant quantities of 5,000 contracts or more. Analyzing the trading volume on Wednesday, the contracts changed hands at an average price of $7.65, indicating potential efforts to offload contracts by a seller.
Chris Murphy, co-head of derivatives strategy at Susquehanna International Group, suggested that Gill might be closing his position, speculating that he may have sufficient cash to exercise the remaining options. However, it remains unclear if Gill was involved in the massive sell-off. Market analysts have been closely monitoring the situation since Gill’s disclosures.
GameStop options volume surged to 1.2 million contracts on Wednesday, significantly higher than the stock’s average daily volume over the past month. Gill’s options position has experienced significant fluctuations, with the value reaching as high as $341 million before briefly turning negative. Despite the volatility, the value of Gill’s contracts ended the session up $8.7 million from the initial purchase.
GameStop shares ended the session down 16.5% at $25.46, with a 45% increase for the year. As of Thursday morning, shares were trading at $25.46 apiece, indicating that Gill’s options could be “in the money” upon expiration. However, Gill may lack the necessary capital to exercise the options, potentially leading to brokerage intervention.
If Gill fails to secure the funds to exercise his call options, E-Trade may intervene and liquidate the options before expiration. This situation poses a challenging choice for Gill, as brokerage actions may be required if the options remain profitable and unexercised. With the potential consequences of not closing the options looming, Gill faces tough decisions ahead regarding his GameStop holdings.