Account Info
Log Out
English
Back
Log in to access Online Inquiry
Back to the Top
Beginner's Guide: Learning about 0DTE Options
Views 94K Contents 43

GameStop $21 Call 0DTE Holders Get Crushed; Tesla, AMC Call Options Slump

avatar
Luzi Ann Santos joined discussion · May 17 14:11
(Here's an update to the options I wrote about earlier this week for readers who are curious whether those positions paid off.)
$GameStop(GME.US)$ call option holders got crushed as zero-days-to-expiration (0DTE) contracts quickly lose their value amid an extended stock sell-off that sent the share price back to its level before meme-stock guru Roaring Kitty returned to social media X and sparked a frenzy.
GameStop shares extended their slump to $22.10 from this week's peak of $64.83 after the video game retailer released preliminary fiscal first quarter results that showed net sales will drop to a range of 872 million to 892 million, from $1.237 billion a year earlier. The company also told the Securities and Exchange Commission that it may sell as much as 45 million shares, diluting the stake of existing shareholders.
GameStop $21 Call 0DTE Holders Get Crushed; Tesla, AMC Call Options Slump
Call options that give the holders the right to buy GameStop shares for $22 each lost 95% of their value as the stock closed just 21 cents above that level, after slumping 20% on Friday. Not everyone is hurting though.
On Thursday, I wrote about whales who sold a combined 9,000 contracts giving the holders the right to buy GameStop shares at $20 by the time the market closed today. Buyers of those options paid a premium of at least $12.35 per share or a total of $11.7 million for those block trades. The contract's price sank 71% to $2.28 a share Friday, leaving the sellers millions of dollars in windfall, if they opted to buy back the call options before the market closed.  
AMC $4 Options Sink
The $AMC Entertainment(AMC.US)$ call options we featured on Monday held up better, but not that much. Contracts that give the holder the right to sell AMC shares at $4 each by close of today were one of the most-active options tied to the stock that day.
While those calls closed 41% lower at 42 cents Friday in New York, those who bought them at $1.21 at the start of the week and held on to them until now, are likely under the water.  The $4 calls peaked at $7.50 on Tuesday, before sinking.
GameStop $21 Call 0DTE Holders Get Crushed; Tesla, AMC Call Options Slump
Tesla's Options Exodus
In the case of the $Tesla(TSLA.US)$ call options that we wrote about last Wednesday, those who joined the exodus earlier this week saved themselves from the excruciating pain of watching the value of those contracts dwindle 96% on the day of expiration. Volume on call options that give the holder the right to buy Tesla shares at $180 each jumped to 224,410, almost four times the open interest as the stock closed at $177.46, more than $2 below that strike price.
source: moomoo desktop app
source: moomoo desktop app


Disclaimer: Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
1
27
1
1
1
+0
18
Translate
Report
234K Views
Comment
Sign in to post a comment

View more comments...