Traders who were fortunate enough to buy early in the latest meme stock frenzy are realizing huge profits.
Unusual Whales, which tracks trading data, tweeted about the activity of one trader who invested $27,000 in call option contracts on April 24, when their price was $0.21 each.
The contracts then peaked at $13.63, meaning that the investment would have yielded a profit of 6,400%, turning $27,000 into $2 million.
In another post, the data platform showed the trading activity of someone who exited a position after gains of 4,000% after purchasing AMC stock options for $32,000 nine days before the Twitter account Roaring Kitty was revived on Sunday.
Call contracts give buyers the right to purchase shares at a specified price and date, but not the obligation.
The meme stock mania returned to the markets on Monday after the internet figure who inspired the rise of GameStop in 2021 returned to Twitter for the first time in several years. Over the past five days, GME shares have now risen by more than 200%.
Roaring Kitty (whose real name is Keith Gill) fueled the rise in 2021 through posts on Reddit and live streams. On Sunday night, his first tweet in nearly three years inspired traders to buy meme stocks and meme cryptocurrencies.
Back in 2021, stocks like GameStop became popular on online forums after amateur traders began to ‘pump’ them. This led to chaos on Wall Street and government intervention after hedge funds that shorted the stocks lost billions of dollars when their value suddenly surged.
Cryptocurrencies also experienced a boom at that time, particularly the values of meme tokens. Since then, they have seen a resurgence, and some are now among the largest cryptocurrencies by market capitalization.
