Is the Reddit rebellion back in full force?
After Monday’s wild move higher in Gamestop, the day-trader darling is up another 18% in Tuesday’s session, which is great news for options traders who took advantage of the stock’s massive weighting in the XRT retail ETF.
Gamestop makes up 8.85% of the XRT, which is more than the rest of the ETF’s top five holdings combined. Amid Gamestop’s 41% surge on Monday, options traders wasted no time pushing bullish bets on an ETF levered to a stock prone to such massive moves higher.
“The trade that really jumped out to me, and the most active option today, 2,000 of the XRT [March 12 weekly] 90-calls were traded for $1.25, putting your breakeven at about $91.25. That’s only about 5% higher from [Monday’s close],” XP Investments managing director of equity derivatives Bonawyn Eison said Monday on CNBC’s “Fast Money.”
The XRT was up nearly 4% in Tuesday’s session.
