Lucky GameStop, AMC Traders ‘Turned Thousands into Millions’ - Decrypt
05/14/2024 22:11
The sudden resurgence of meme stocks this week have made a small fortune for traders that may have never given up on the 2021 craze.
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Go to Alpha ReportsTraders who were fortunate enough to have bought in early on the latest meme stock craze are making away with huge gains.
Unusual Whales, which tracks trading data, posted on Twitter the activity of one trader who invested $27,000 in call contracts on April 24 when they were priced at $0.21 a pop.
The contracts then peaked at $13.63, meaning the investment would have reaped gains of 6,400%—turning $27,000 into $2 million, according to the firm.
Holy, this trader turned thousands into millions with GameStop, $GME.
This $GME trader got $25 call contracts expiring 05/17/2024 at an average of $0.21, for 27k.
They peaked at $13.63.
Assuming he stayed in, this is a 6,400% return, turning 27k into over $2 million pic.twitter.com/Ogi1CX4Tks
— unusual_whales (@unusual_whales) May 13, 2024
In another post, the data platform showed the trading movements of someone who exited after gains of 4,000% gains following a $32,000 buy-in of AMC Entertainment (AMC) stock options nine days before Roaring Kitty’s Twitter account sprang back to life on Sunday.
Call contracts give buyers the right to buy a stock at a specified price and date—but not the obligation.
It’s unclear how investors who held onto GME through the 2021 boom and bust have fared versus newcomers in the latest hype cycle. Unusual Whales did not immediately respond to a request for comment from Decrypt.
Meme stock mania returned to markets Monday after an internet figure who inspired the 2021 GameStop rally posted online for the first time in years. Over the past five days, GME stock is now up over 200%.
Roaring Kitty (whose real name is Keith Gill) helped fuel the 2021 rally via Reddit posts and livestreams. On Sunday night, his first tweet in nearly three years inspired traders to snap up meme stocks and meme digital coins and tokens.
Back in 2021, shares in dying companies like GameStop became popular on internet forums after amateur traders started pumping them. This led to chaos on Wall Street—and government intervention—after hedge funds that had shorted the stocks lost out after they suddenly went up in value.
Cryptocurrencies experienced a boom at the time too, with meme coins and tokens in particular going up in value. They have since experienced a resurgence and some now make up the top digital assets by market cap.
The virtual assets—which are based on Internet jokes and are usually extremely volatile—have this week shot up in value along with traditional stocks.
Edited by Ryan Ozawa.