Game Stopped

• Posted by Adam Warner
• on September 15th, 2009

Some action in Gamestop (GME) yesterday other than me begging them to take take back our Wii Fit (it thinks I’m old and overweight, lol). This, from Schaeffer’s.

Shares of GameStop Corp. (GME: sentiment, chart, options) have rallied more than 3% so far today, with practically no news crossing the wires to drive the activity. Undeterred, options traders appear to be chasing the rally, sending more than 14,000 call contracts across the tape. Compared to GME’s daily average call volume of 2,169 contracts, these bullishly oriented bets are more than six times as popular.

The September 25, 26, and 27 strikes have garnered the most attention, with the 25 and 27 calls seeing volume exceed 5,000 contracts, while the 26 strike has attracted volume of roughly 3,000 contracts. Among front-month options, the September 25 strike is home to peak call open interest, totaling 7,061 contracts. Meanwhile, the September 25 strike sports open interest of 5,012 contracts, and the September 27 call has a mere 1,298 contracts open.

This continues a trend of increasing interest in calls, as per Schaeffer’s.

It’s clearly a bit of bottom fishing in the volatility here as GME options sit at 52 week lows.

But like so much else we look at these days, even those 52 week lows overprice actual stock volatility. By a considerable margin here i

Taking in the bigger picture, I’d guess it’s just a real cheap way to take an upside shot here, as opposed to say, someone’s bunny having a good nose. But worth keeping an eye on.

….And total aside here, but now that they stopped openiing up Staples and Office Depot’s every half mile, I’d vote GME as the largest overcapacity in North NJ. A local mall actually has 2 Gamestops, not to mention another one in a strip mall about a mile down the road. I asked the manager why there’s 2, and he says that the older one has another year on the lease and there’s no one out there dying to use the space and GME loses less just keeping it open.

That’s my commercial real estate anecdote for the day.

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