1. Profitable Trade Following Roaring Kitty’s Social Media Post
On Friday, a savvy options trade in GameStop (GME.N) resulted in a substantial profit of $550,000, thanks to a well-timed social media post by Keith Gill, widely known as “Roaring Kitty.” Gill’s influence in the stock market is well-documented, and his recent post on the social media platform X led to a notable reaction in GameStop’s stock performance.
2. Roaring Kitty’s Cryptic Post Sparks Market Movement
Gill’s social media post featured an altered image from the 1999 film “Toy Story 2,” with a dog’s face superimposed on one of the characters. This update was Gill’s first in over two months, and his posts have historically led to significant market activity. Following the post, GameStop shares saw a dramatic increase, rising as much as 9% on the day. Although the gains were later reduced, the stock still ended the day with a 4% increase at $23.39, demonstrating the immediate impact of Gill’s social media presence on stock prices.
3. Details of the Profitable Trade
The options trade that capitalized on this market movement involved a strategic purchase and subsequent sale of GameStop call options. Approximately 18 minutes before Gill’s post went live at noon, a trader acquired about 10,000 GameStop September 13 call options with a strike price of $22.5, spending roughly $1.74 million. About 20 minutes after Gill’s post, these options were sold in two blocks—5,000 contracts each—for a total of approximately $2.29 million. This transaction resulted in a net profit of around $550,000, reflecting a return of about 30% on the initial investment.
4. Market Reaction and Expert Commentary
Brent Kochuba, founder of financial insights company SpotGamma, commented on the unusual timing of the options trade. Kochuba noted that the purchase of short-dated options just before a weekend, where there is limited time until expiration, presents inherent risks and requires a swift market move. He described the situation as “a little more egregious” due to the compressed timeframe for profit realization. Kochuba’s observations underscore the high stakes and potential for volatility associated with such trades.
5. Previous Incidents and Impact on Investor Sentiment
Gill’s social media influence has been significant in the past, as demonstrated by his previous posts. In June, Gill shared a picture of a puppy on X, which was speculated to reference Chewy (CHWY.N). This post caused Chewy’s stock to rise to a near one-year high. A subsequent regulatory filing revealed that Gill had purchased a 6.6% stake in Chewy shortly before his post. In July, a lawsuit accusing Gill of a “pump-and-dump” scheme with GameStop was withdrawn, highlighting his continued impact on market dynamics.
6. Chewy Stock Update Following Gill’s Post
Following Gill’s latest post, Chewy shares initially fell nearly 4% but later rebounded to rise 1.5% to $26.54 by the end of the trading day. This fluctuation illustrates the ongoing influence of Gill’s social media updates on stock prices and investor sentiment, reflecting the broader impact of such posts on market behavior.
Overall, the recent GameStop options trade highlights the significant role individual influencers like Gill can play in shaping market movements, underscoring the volatility and rapid changes that can occur in response to social media activity.
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