Mike Khouw Sees Unusual Options Activity In GameStop

On CNBC's "Options Action," Mike Khouw said that less than 2% of the non-penny stocks of the Russell 2000 have implied volatilities of over 100% and GameStop Corp. GME is one of them, with forward 30-day volatility of 170%. The options market is implying a move of 11.50% in either direction by Friday.

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The options volume on Wednesday was 2.7 times the average daily options volume as around 350,000 contracts were traded. The most active options were the May $250 calls. They were trading for around $14 and buyers of those were betting that the stock can finish the week above $264 or around 9% above the closing price on Friday.