(Bloomberg) -- Even as GameStop Corp.'s shares cratered on Wednesday, some options traders were still betting on a massive leap this week.
Among the most-traded call options were contracts with $100 and $128 strikes — implying, respectively, a near tripling or even quadrupling in the underlying by Friday. The $128 contract had no open position prior to Wednesday, while the volume in the lower strike exceeded the number of outstanding positions.
For much of the week, options traders flocked to more sanguine contracts — seeking closer to 15% advances as opposed to 200% rallies. On Wednesday, shares slumped as much as 36% to pare back some of the gains made early in the week.
Read more: GameStop, AMC Shares Plunge as Two-Day Meme Rally Evaporates
According to Susquehanna International Group, a mix of buying and selling drove the Wednesday action in the far out of the money calls. Most traded in small lots.
“I'm sure there is a lot of smart money playing this name,” said Brent Kochuba, founder of options platform SpotGamma. “Retail can try all they want, but I think the volatility traders have come in and are in control of this thing now.”
While the options are expensive in one regard, at levels implying some 700% annualized volatility, on an outright basis they are cheap. Still, the money changing hands is not nothing — despite only a few days till expiration and the massive jump needed to end up worth anything, the 11,000 contracts of $128 calls that have traded cost buyers about $375,000 in total premium.
Read more: Bill Gross Sells GameStop, AMC Options to Cash in on Meme Mania
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