GameStop’s stock surged on Monday because people think Keith Gill, the man who sparked the big stock frenzy in 2021, might have bought a lot of shares. The stock price went up by about 30%, reaching around $30.26, and trading was paused briefly due to the high activity. At the opening, the stock had jumped over 70%.

Gill, known as DeepF——Value on Reddit and Roaring Kitty on YouTube and X, posted a screenshot on Sunday night showing a large holding of GameStop shares and call options in his portfolio. This was shared on Reddit’s r/SuperStonk forum.

According to the post, he owns 5 million GameStop shares worth $115.7 million as of Friday’s closing price, plus 120,000 call options with a $20 strike price, which expire on June 21. Each option was bought for about $5.68. GameStop shares closed at $23.14 on Friday.

Possible outcomes for Roaring Kitty and GameStock

If GameStop’s price goes up, Roaring Kitty (Keith Gill) could see a substantial profit, significantly increasing the value of his 5 million shares and 120,000 call options, potentially attracting more retail investors and fueling further price increases. Conversely, if the price drops, he could face significant losses, especially with the call options expiring on June 21. This might lead to a sell-off among other investors influenced by his moves, causing further declines in the stock price. His influence and past success might mitigate panic, but the volatility could still be high.

Possible Scenarios for Retail Traders

Retail investors should approach this situation with caution and a well-thought-out strategy:

  1. Research and Stay Informed: Keep up with the latest news about GameStop and Keith Gill’s positions. Understanding the factors driving the stock’s movement can help make informed decisions.
  2. Set Clear Goals: Decide on investment goals and risk tolerance. Determine whether the aim is short-term gains from volatility or long-term holding based on the company’s potential.
  3. Diversify: Avoid putting all funds into a single stock like GameStop. Diversification can help manage risk and protect against significant losses.
  4. Use Limit Orders: When buying or selling shares, use limit orders to control the price at which transactions occur, helping to avoid unexpected price swings.
  5. Monitor the Market Closely: Given the high volatility, regularly check stock performance and market conditions to make timely decisions.
  6. Have an Exit Strategy: Plan when to sell, whether based on achieving a specific price target or limiting losses. Stick to this plan to avoid emotional decision-making.
  7. Be Cautious with Options: If considering options trading, understand the risks involved, especially with call options, which can lead to significant losses if the stock doesn’t move as expected.
  8. Consult Financial Advisors: For personalized advice and strategies, consulting with a financial advisor can provide guidance tailored to individual financial situations and goals.