GameStop Corp. (NYSE:GME) shares saw considerable volatility on Wednesday as they traded in a nearly $9 range on a day when the broader market hit a record high amid the Federal Reserve’s rate decision and a cooler-than-expected May inflation report. David Boole, equity-derivatives strategist and Managing Director at BayCrest weighed in on the options activity in GameStop.

What Happened: On Wednesday, there was a spike in trading in the call options with the same strike price and expiration date as the ones Keith Gill, aka “Roaring Kitty” disclosed in his portfolio, with 93,266 contracts exchanging hands, more than nine times its 30-day average volume of 10,233 contracts, CNBC reported. The options finished the day more than 40% lower.

Source: Yahoo Finance

Traders surmised that Gill could have been behind the spike, given he held a huge chunk of these contracts, the report said.

Offering his take, Boole said in a CNBC interview that toward the end of the day 75,000 of the calls traded in the last 45 minutes, 90,000 contracts traded roughly on the day. “That represents what could be up to 50% of Roaring Kitty’s total position if that were him unwinding,” he said.

He added that the trades appeared to be sells based on their position relative to the bid and ask, as well as the stock’s movement during trading hours.

“If the 75,000 contracts were selling potentially to close, that created roughly six and a half million shares to sell from market makers on the other side,” Boole said. He noted that typically GameStop trades about 20 million shares in the last hour of the day. The 6.5 million would impact the stock, he said.

Weighing in on the implications for Roaring Kitty’s portfolio, Boole said that if he traded the 75,000 contracts, it could have generated $52.5 million in cash. He added that by combining this with the cash position disclosed by Gill in his latest portfolio update, he would have $81 million in cash and 75,000 of the June 21 $20 call options.

“If you were to exercise those, he would need about $90 million. So we're getting pretty close to the math to the money needed to exercise those calls if this was Roaring Kitty,” the strategist said.

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Why It’s Important: GameStop’s stock has been volatile ever since Gill resurfaced on social media in mid-May after a three-year hiatus. The company has used the spike in shares to raise capital through offerings. As recently as Friday, the company filed for an open-market sale agreement with Jefferies to sell up to 75 million shares. This comes close on the heels of another multiple-instrument offering the company announced on May 17, which included 45 million common stock.

Andrew Left’s Citron Research on Wednesday said it was no longer short on GameStop, giving up a long-held stance going back to the 2021 meme frenzy. The firm clarified that the change of heart has nothing to do with the video game retailer’s fundamentals. “But with $4 billion in the bank, they have enough runway to appease their cult-like shareholders,” it said in a post on X, formerly Twitter.

The firm said it will watch from the sidelines.

GameStop is due to hold its annual shareholder meeting on Thursday. Things get more exciting as the exercise date approaches and it remains to be seen what approach Gill takes.

In premarket trading, GameStop shares climbed 3.10% to $26.25, according to Benzinga Pro data.

Read Next: ‘You Were A Billionaire:’ Did Roaring Kitty Actually Hit 10 Figures With GameStop Stock Holdings? It’s Complicated

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