On January 23, Keith Gill, the meme stock “leader” famously known as “Roaring Kitty,” posted his second tweet of the year late Wednesday night, Eastern Time. Sharing a clip from the classic sci-fi animation Futurama featuring the iconic "Jurassic Bark" scene, his post sparked a frenzy of speculation about its potential hidden meaning.
The tweet, which garnered over 5.7 million views, immediately lit up the market.
The investor community Stocktwits quickly tweeted, "He’s back!!!" Some market participants speculated that this might signal Gill’s unwavering support for GameStop, despite the game retailer grappling with significant store closure pressures.
Following the buzz, GameStop’s stock price rose 2.5% on Thursday. However, the true intent behind Gill’s post remains shrouded in mystery.
Earlier this month, on January 2, he posted a GIF on social media featuring Dave Chappelle impersonating Rick James, which also caused a stir. Many users speculated about the deeper meaning of the post. That day, software company Unity became a standout winner as its stock surged over 9%, with some individual investors connecting the "UNITY!" reference in the GIF to the company.
Over the past few months, Keith Gill has sporadically tweeted every few days or months, often fueling investor speculation and triggering meme stock rallies. For example, in June, he tweeted about his Chewy holdings along with an image of a cartoon dog, leading to a sharp rise in the pet retailer's stock.
Three years ago, Gill's active postings on Reddit's WallStreetBets forum inspired a wave of retail investors to dive into GameStop stock, sparking the globally renowned “short squeeze against Wall Street.” This May, after a three-year hiatus, he posted an image on X (formerly Twitter) of a video gamer leaning forward, as if signaling he was taking the game seriously. That post reignited short squeezes in several U.S. meme stocks.
Now, with two appearances in the new year, the question remains: Can GameStop surge again? Let’s wait and see!
What Is a Bull Call Spread Strategy?
A Bull Call Spread strategy involves buying a call option with a lower strike price and simultaneously selling a call option with a higher strike price. Both options share the same expiration date. Compared to simply buying a call option, this strategy provides additional income from the sold call, reducing the overall cost and shifting the breakeven point lower, thereby improving the odds of success. Essentially, it is a low-cost bullish strategy.
Maximum Profit: Achieved when the underlying asset’s price reaches or exceeds the higher strike price. The maximum profit equals the difference between the strike prices minus the net cost of the options.
Maximum Loss: Equal to the net cost of the options (the cost of the purchased call minus the income from the sold call).
Risk and Return: Both risk and return are limited. Compared to directly buying a call option, the bull call spread strategy caps potential losses and gains.
This strategy is suitable when an investor anticipates a moderate rise in the asset’s price but not an overly large increase. It is often used in low-volatility markets to profit by reducing option costs.
GameStop Bull Call Spread Example
GameStop’s current price: $28.30. Suppose an investor expects it to rise to $35 within the next month.
Buy: A call option with a strike price of $29 for $290.
Sell: A call option with a strike price of $35, earning $115 in premium.
This is a bull call spread strategy, ideal when the investor expects the stock to rise within a specific range (but not significantly beyond the sold strike price). Below is the profit and loss analysis:
Strategy Overview:
Buy Call Option
Strike Price: $29
Premium Cost: $290
Sell Call Option
Strike Price: $35
Premium Income: $115
Net Initial Cost: $290 - $115 = $175
Maximum Risk: $175 (initial investment)
Maximum Profit: $425
Best Case Scenario: Stock price rises to $35 but not significantly beyond.
Advantages:
Limited risk and lower initial cost.
Captures upside potential with fixed profit above the higher strike price.
Disadvantages:
No profit from further price increases beyond $35.
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