Skip to main content
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week for 24 weeks
Access every election story that matters
Enjoy unlimited digital access
$1.99
per week
for 24 weeks
// //

Options traders are expecting comparatively subdued moves in GameStop Inc shares around its earnings report, as the company that helped spark the so-called meme stock phenomenon prepares to report quarterly results on Wednesday.

Traders are pricing a 14% swing for GameStop’s shares by Friday, according to pricing in options expiring at the end of the week. By comparison, the video game retailer’s shares have moved about 30% on the day after each of its last two earnings reports.

The expectations for smaller stock swings comes as the daily moves in GameStop’s shares have also grown tighter. The company’s shares have logged average daily moves of around 3.6% in either direction over the last month, compared with average daily moves of 12% for the first half of the year.

Story continues below advertisement

One reason for the toned-down moves may be that the company’s shares - which stand at around $200 compared with around $16 in early January - may be growing less attractive to investors looking to get in on cheaper stocks in the hopes of catching a big rally, said Henry Schwartz, head of product intelligence at Cboe.

A recent batch of meme stocks that rallied last month included names like Support.com, which went from trading at around $8 in mid-August to as high as $59.69 in late August, and Vinco Ventures, which went from around $2.50 in late August to as high as $7.89 earlier this month.

“GameStop has been eclipsed by a lot of other names,” Schwartz said.

GameStop is up about 950% for the year and down 8% so far this quarter. The stock’s 1-month average daily options trading volume is at about 111,000 contracts, down from about 820,000 contracts in early February, according to Trade Alert data. Similarly, the stock’s 1-month average daily volume is at 3.3 million shares, down from about 77 million shares in early February.

The Grapevine, Texas-based company is expected to post a rise in second-quarter revenue on Wednesday as its brick-and mortar business is slowly recovering.

With the company pushing for e-commerce growth, investors will also look for comments regarding its future plans. Hardcore proponents of the stock on forums such as Reddit’s WallStreetBets have famously pledged to hold its shares until they go “to the moon.”

Indeed, a look at implied volatility - an options-based measure of how much traders expect a stock to move - suggests that some are betting on the shares to snap a four-quarter streak of post-earnings declines.

Story continues below advertisement

Implied volatility on Friday-expiration calls that would come into play if the stock rises 15% stood at 230% on Tuesday afternoon, compared with 210% for puts that come into play if the stock falls 15%, according to Refinitiv data.

Calls convey the right to buy shares at a fixed price in the future and are typically bought by bullish investors, while puts provide the right to sell shares at a set price in the future.

“The marketplace is willing to pay up for the calls in the near-term cycle,” said Brian Overby, senior options analyst at Ally Invest.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies