A savvy investor took advantage of Kohl’s (KSS) soaring meme stock price by using a gamma options trade. This strategy allowed them to profit from the stock’s rapid growth without fully committing to it.
Gamma options are sensitive to changes in volatility, making them particularly effective during times of high market uncertainty. By betting on the stock’s increased popularity and buying up the associated call options, the investor could reap significant rewards as the stock price rose.
However, this trade also carried a significant level of risk due to its reliance on the stock’s rapid growth. If the stock had experienced a sharp decline or stagnation, the investor would have faced substantial losses.
In the end, Kohl’s impressive meme stock rally proved beneficial for those who took calculated risks. The investor’s successful gamma options trade is an example of how a well-executed strategy can yield impressive profits in the volatile world of meme stocks.
Source: https://www.barrons.com/articles/gamma-squeeze-options-kohls-opendoor-ef38e074