Photo by Oren Elbaz on Unsplash
GameStop and AMC Stocks Surge, Signaling a Market Recovery
November 29, 2023
In an unexpected rally this Wednesday, GameStop, a favorite pick of retail traders, saw an almost 20% leap in its trading volume. This surge is a continuation of the previous session’s recovery, paralleling a wider revival in the markets that has reignited the flames for speculative trading.
“Speculation is back … and GameStop is ground zero for speculation.”
Steve Sosnick, chief strategist at Interactive Brokers, via Reuters
With the last standing price at $15.31, the video game retail giant is “up nearly 36% over the last two sessions.” It is a two-month high in regular trading for GameStop, “extending a rally ahead of the company’s quarterly results next week and underscoring a return in appetite for risk.”
In a similar vein, AMC Entertainment, another favorite for retail traders, experienced a near 3.5% rise to reach $6.95. The online buzz about GameStop and AMC was palpable as traders intensely discussed both stocks on the social media platform, stocktiwts.com, setting the stage for Wednesday’s trading activities.
This rebound in meme stocks such as GameStop and AMC aligns with the S&P 500 drawing closer to its highest 2023 level so far. This surge is fuelled by the hopeful speculation that U.S. interest rates have peaked, injecting new vitality into speculative trading that experienced a slump earlier this year.
However, it’s worth noting that the year hasn’t been all roses for these stocks — GameStop shares have seen a 27% drop up until Tuesday’s close in 2023, while AMC suffered a much steeper 80% loss in value during the same period.
The options side provides interesting insights as well. The open interest put-to-call ratio in GameStop was at 0.45 early Wednesday morning, signaling a bullish stance among traders. The rekindled enthusiasm amongst retail traders and the market’s broader recovery hint at exciting times ahead in the trading world.
GameStop is expected to post its Q3 results on Dec. 6, “with analysts expecting its net loss to narrow to $25.6 million from $93.4 million a year earlier.”
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