Videogame Retailer Sees Upside Options Activity
GameStop is attracting upside option activity following some notable endorsements in recent days.
Traders were focused on the May 27 strike, where 6,110 calls changed hands early Friday in a strong buying pattern for an average of $0.71, according to OptionMonster's real-time systems. Previous open interest was only 252 contracts at the strike, which has seen an average call volume of just 12 a day for the last month.
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The videogame retailer closed Friday at $24.81, up 1.6 percent on the session. Shares have been off to the races since rebounding in March as videogame sales grew 6 percent across the industry, reversing back-to-back months of double-digit losses.
BB&T Capital Markets, which had initiated coverage of GameStop only last month with a "hold" rating, bumped it to a "buy" with a price target of $32 on Friday. In addition, Forbes identified it as a company with strong potential earlier this month.
For the calls purchased Friday to turn a profit, the stock needs to gain roughly 12 percent by expiration in May. Overall calls in the name outpaced puts by more than 3 to 1 in the session.
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