Why is GameStop (GME) Down 7.11% Today

GameStop (GME) stock price has maintained its selloff over the past 5 days. The shares have nosedived by 7.11% to $23.97 as of the time of this writing. On Friday, the GME dropped by 3% just around the time when certain unusual options activity were discovered. This price movement underscores an ongoing volatility sentiment around the meme stock. Popular stock market data resource Unusual Whales highlighted the volatile state of the video game retailer’s options market.The $125 calls expiring Friday experienced a significant surge in Implied Volatility (IV). It moved from 650% on Wednesday to 1,127% the following day. This spike in IV suggests significant uncertainty and speculation about the stock’s near-term movements. To a large extent, traders may expect a sizable fluctuation in price as a result of the high IV in GameStop’s options.This outlook can further directly impact on the stock price by creating additional volatility as these positions are bought and sold. For context, options trading offers investors an avenue to speculate on the future price of a stock to the point that they can place bets on its movements.

Meanwhile, the return of GME trader and influencer Roaring Kitty, aka Keith Gill, is a major trend fueling the recent volatility. Gill’s bullish posts on X and livestreams contributed significantly to driving the 2021 meme stock surge. He has been away for up to three years but suddenly showed up in May during which the price of the stock saw a surge.

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