5 Big Investors Short Selling GameStop (GME) Stock

  • GameStop’s (GME) days-to-cover (DTC) figure is at a yearly high of 11 days.
  • Susquehanna is the largest shareholder of puts against the company.
  • GME stock is down more than 25% year-to-date (YTD).
A Gamestop (GME) video game store in the Herald Square shopping district in New York
Source: rblfmr / Shutterstock.com

GameStop (NYSE:GME) stock investors have been patiently waiting for a potential short squeeze on the same scale as the one witnessed in January 2021. Now, one indicator may suggest that another squeeze is on the way.

According to Fintel, short interest as a percentage of float has reached a high 21.25% for GME stock, equivalent to 53.88 million shares sold short. That’s more than enough to drive a significant squeeze to the upside. Meanwhile, the days-to-cover (DTC) all of the short sales sits at about 11 days, meaning shares sold short are equal to about 11 days of average daily trading volume. That’s the highest DTC figure in over a year, based on MarketBeat data. On Oct. 14, DTC was even higher, clocking in at 15.45 days.

Meanwhile, some institutional investors have upped their put option positions in recent months. Yesterday, Cutler Group reported that it now owns puts against 439,300 shares of GME stock, increasing its initial position by 199%. A week before that, XR Securities also reported increasing its put position by 78% to 23,100 shares.

5 Big Investors Short Selling GameStop (GME) Stock

That said, GameStop has remained a cult meme stock for retail investors. On top of that, InvestorPlace analyst Tom Yeung notes that GME stock’s liquidity has declined due to at least 71.3 million shares being registered to GameStop’s transfer agent. He estimates that the company’s free float is now less than 150 million shares. As a result, the average monetary value of daily shares traded has fallen to about $90 million compared to $400 million last year. With a smaller float, stocks are generally more susceptible to short squeezes.

As of the second quarter, the institutional put/call ratio sits at 1.11, up from 0.87 during Q1. That’s equivalent to 44.74 million puts and 40.15 million calls, implying a bearish options stance. With that in mind, let’s take a look at the top five investors betting against GME stock with puts:

  1. Susquehanna International owns puts against 13.84 million shares. The firm also owns call options against 11.43 million shares.
  2. Citadel Advisors owns puts against 7.4 million shares. Citadel also owns calls against 8.24 million shares, outnumbering its short position.
  3. Simplex Trading owns puts against 5.42 million shares. Simplex also owns calls against 2.45 million shares.
  4. Jane Street Group owns puts against 3.54 million shares. It owns calls against 5.77 million shares.
  5. Goldman Sachs (NYSE:GS) owns puts against 2.88 million shares and calls against 11,200 shares.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/10/5-big-investors-short-selling-gamestop-gme-stock/.

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