GameStop, the beloved stock of retail traders, saw a 12.5% surge in premarket trading on Wednesday, following a strong rally in the previous session. The increase in trading volume is attributed to a broader market recovery, which has piqued interest in speculative investments.
Currently, GameStop shares are trading at $15.12, making it the third most actively traded stock on the New York Stock Exchange as of 5:50 a.m. ET.
On Tuesday, GameStop experienced its largest one-day percentage gain in eight months, despite no clear news catalyst.
Meanwhile, AMC Entertainment, another popular stock among retail traders, rose nearly 4% to $6.95.
Both GameStop and AMC were hot topics among traders on the social media site stocktwits.com on Wednesday.
The resurgence of meme stocks coincides with the S&P 500 approaching its highest level of 2023, fueled by optimism around U.S. interest rates. This has injected some vitality into speculative trading, which has faced challenges this year.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, noted, “The market optimism is now luring in retail traders – a clear signal that the market rally is overstretched.”
While GameStop shares have dipped 27% in 2023 up to Tuesday’s close, AMC had seen an 80% decline in its value.
Regarding options trading, the open interest put-to-call ratio in GameStop stands at 0.45, indicating a bullish positioning among traders.
Moreover, the videogame retailer is set to reveal its third-quarter results next week on Dec. 6.
(Reporting by Medha Singh in Bengaluru; Editing by Krishna Chandra Eluri)
