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GameStop Options Activity Prior to Roaring Kitty Reemergence | S&P 500 Makes New High | 90% of the Time No Recession or Stagflation | When Covered Calls Get Called Away Early

By Derek Moore

Show Summary:

Derek Moore and Jay Pestrichelli, CEO of ZEGA Financial start by looking at GameStop’s (GME) call option open interest and activity in the days prior to Roaring Kitty tweeting . They notice the increase in options activity ahead of the surge in the stock’s price and volume spike and whether the options market led the stock market on GME. Then they comment on another new all-time high by the S&P 500 Index and how according to a BofA chart 90% of the time markets are not in a recession or in stagflation since 1948. Later Derek and Jay bring up the CPI Supercore trending higher while car insurance rates are soaring. What does this mean for the Fed and rates? Finally, explanation of when covered calls get called away early.

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Topics Include:

  • Growth Roaring Kitty comes out of hibernation to tweet.
  • Looking at GameStop options activity prior to Roaring Kitty’s tweet
  • Did the options activity prior to the stock activity mean people knew the tweet was coming?
  • Are we in for a GameStop meme stock part 2?
  • Why retail investors should use caution in trading GameStop.
  • Looking at the implied volatility on GameStop options to understand expected volatility.
  • CPI Supercore continues to rise YoY and what that means for interest rates and the Fed
  • Car insurance rates are surging 20%+ and rising
  • How long it takes the S&P 500 to go up each 100 point increment
  • According to a Bank of America graph 90% of the time since 1948 no recessions or stagflation
  • Enough about the Fed and rates?
  • When do covered calls get called away early and assigned?
  • Understanding dividends vs time value in deciding when covered calls get assigned
  • Early assignment for options
  • What implied volatility says about what the options market expects a stock to move
  • GameStop 300% implied volatility is massive and how expensive the ATM straddle is

Mentioned in this Episode

PPI comes in hotter than expected click below to read the PPI report release

Previous Week’s Podcast:

Goldilocks Stock Market and What Could Derail It? | Interest Rates Aren’t Historically High | Cheap to Hedge the Downside Now with Options

Jay Pestrichelli’s book Buy and Hedge 

Derek’s new book on public speaking Effortless Public Speaking 

Derek Moore’s book Broken Pie Chart 

Contact Derek derek.moore@zegafinancial.com