Here's Why Jon Najarian Is Holding GameStop Call Options Through Earnings

Market Rebellion co-founder Jon Najarian is holding call options on GameStop Corp GME through the company's earnings report, he said Wednesday on CNBC's "Fast Money Halftime Report."

Najarian's Thesis: There isn't a lot of volume on the stock ahead of its earnings report, but the options activity shows traders are expecting about a 13% move, Najarian said.

The implied volatility of the options contracts is about 30% lower than it was the last time GameStop reported quarterly earnings, he said.

Related Link: GameStop Forms Bullish Pattern Heading Into Earnings: Will This Time Be Different?

The setup is similar to the one that Najarian saw ahead of Walt Disney Co's DIS earnings. When Disney reported its financial results on Aug. 12, the stock popped on the company's top and bottom-line beat.

"Have [traders] not put enough into the possibility of a bigger move? We'll see tonight. That's why I'm willing to hold these calls," Najarian said.

GameStop is set to announce its second-quarter financial results after the market closes today.

GME Price Action: GameStop has traded as high as $483 and as low as $5.87 over a 52-week period.

The stock was down 1.31% at $196.40 at the time of publication.

Photo: StockSnap from Pixabay.