A large trader is looking for GameStop to make a sharp move higher or lower.
optionMONSTER's Depth Charge system detected the sale of 10,000 July 35 puts for the ask price of $2.45 yesterday. Open interest in the strike was just 347 contracts before the trade appeared, showing that it is clearly a new position.
Two minutes later, the day's largest block of GME stock traded as 330,000 shares were bought for $38.67. That exactly offsets the delta of the put position, creating an overall market-neutral play that is long-volatility play .
This means that the trader is looking for a big move up or down and/or for the stock's volatility to be greater than that implied by the premium in the puts. (See our Education section)
GME slipped 0.15 percent to $38.69 yesterday. The game retailer's shares gapped down from above $45 in mid-January and have resistance at $40.
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