Roaring Kitty's GameStop call options experience a significant decline in volume
In afternoon trading on Wednesday, the sell-off of shares in Roaring Kitty intensified, coinciding with a spike in trading volume in the call options for the meme stock leader.
On Monday night, Keith Gill, also known as Roaring Kitty, revealed his portfolio still contained 120,000 call options contracts with a strike price of $20 and an expiration date of June 21.
On Wednesday, GameStop traded 93,266 contracts at the exact strike price and expiration, which is more than nine times its 30-day average volume of 10,233 contracts. The price of these contracts dropped more than 40% during the session, while the stock plummeted 16.5%.
Options traders speculated that Roaring Kitty may have been behind the large volume of trades, given his significant holdings of those contracts.
It is speculated that traders believe Gill will sell his calls or roll the position into another call option to prevent having to raise a significant amount of cash to exercise them on the 21st.
The stock's price could be affected if Wall Street detects any signs that he is selling his position.
To exercise the calls, Gill would need to have $240 million, which is more than what he has publicly shown in his E-Trade account.
At 5 p.m. ET, CNBC's "Fast Money" will be discussing the GameStop move.
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