The renewed GameStop (NYSE: GME) mania has shown that the trading community wields a significant impact on the stock market and can make substantial movements in stock valuations, turning thousands into millions.
Exactly this happened to an anonymous trader on May 17, as his initial $27,000 investment in call options became $2 million worth of profit.
The news came as a response by Unusual Whales to a post from Robert F. Kennedy Jr. on X, in which he highlighted the need for transparency in US stock markets, more robust regulatory oversight, and stricter penalties for market manipulation and criminal behavior.
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Additionally, he decided to invest $24,000 into GME stock to fight against the institutions on Wall Street and reiterate his claim.
How did this trade unfold?
A trader made a strategic investment by purchasing $25 call options for a stock with an expiration date of May 17. Each option was bought at an average price of $0.21, and the trader spent $27,000 on these contracts.
A call option gives the holder the right, but not the obligation, to buy a stock at a specified price (in this case, $25) before the option expires. If the stock price rises above the strike price of $25, the call option increases in value.
In this instance, the trader’s investment paid off significantly. The price of each call option soared to a peak of $13.63.
Thus, the trader achieved a phenomenal 6,400% return on their investment. This means the trader’s initial $27,000 investment grew to a peak value of approximately $1,764,000, showcasing the high potential rewards of options trading when market conditions are favorable.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
