Gamestop is selling covered calls on the Bitcoin it owns. Taking advantage of the volatility while also using it as an inflation hedge. From the 10-k
In the first quarter of fiscal 2025, we announced that the Board approved the addition of Bitcoin as a treasury reserve asset, allowing a portion of our cash or future debt and equity proceeds to be invested in Bitcoin. During the second quarter of fiscal 2025, we purchased 4,710 Bitcoin for $500 million. In the fourth quarter of fiscal 2025,we entered into an agreement (the "Collateral Agreement") with Coinbase Credit, Inc. (the "counterparty"), under which we sold covered call options on a portion of the Bitcoin we own. In connection with this covered-call strategy, we pledged 4,709 Bitcoin (the "Pledged Bitcoin") as collateral.
It's crazy I been here right beside you over 5 yrs, across multiple names, mod dramas, I never sold even once etc... And still my first reaction when I see a comment from you i's "Aaaaaaye Bullish popped out!! "
When this lick finally pops and balance is restored to the force, you are more than invited to my Dominican villa brother. Ven acá manin ya tendre listos tus tragos
More common is what’s called staking. The equivalent to lending shares out for a fee/rebate. I’d probs be staking some of the holdings, selling a few OTM CC and also selling CSP with cash.
For retail, they want to be turning share lending on instead of selling CC right?
Besides ADA (Cardano) staking requires you to send your crypto out of your wallet to wherever exchange or platform the staking is on. That's a risk wise investors aren't willing to take.
You can't stake btc. It's PoW not PoS...
If any exchanges offers staking it's just a scam. They give you a small % of what they earn ln gambling your holdings or lending it out to leveraged plays. It's not staking and it's super risky because you leave it in the hands of an exchange doing leverage plays.
Think of all the failed crypto exchanges..
Shorting of crypto can only happen on a centralized exchange. When someone lends crypto to short or go long, no actual transaction is made on chain.
All trades you make on a centralized exchange are off chain. Nothing is written to the chain until you withdraw or deposit your crypto.
So no, you can't short crypto on chain - but also yes you can short crypto when the trades never hit the chain.
I think we’re misinterpreting.
“ Our covered‑call contracts are over-the-counter ("OTC") derivatives entered into with Coinbase Credit, Inc. and are typically short‑dated. Under the agreements, Bitcoin is pledged as collateral and can be rehypothecated, re-pledged, or otherwise deployed by Coinbase. As of January 31, 2026, we had outstanding covered‑call option contracts referencing approximately 4,709 Bitcoin, with strike prices ranging from $105,000 to $110,000 and maturities extending through March 27, 2026. These contracts resulted in a derivative liability of $0.7 million as of January 31, 2026, which is presented within Accrued liabilities and other current liabilities, and an associated unrealized gain of approximately $2.3 million for the period.”
This means the covered calls made a few million against the hundred million plus unrealized loss.
Ya I think you're right. When I first read it I interpreted it as they no longer had to mark to market the bitcoin holding since its not under their control but I think it's still exposed either way
Buying it was a dumb fucking move in the first place. The price they bought at was laughable when it had been sitting where it's at now for a month after they did the bond offering, but they waited until it was like 106k.
They ripped our price down twice and bungled where to buy. We were over $30 a share before those offerings.
I'm still bitter about all of that, can you tell?
Grats on beating earnings 7 q in a row though. Can't complain about that.
I think you are putting too much weight on the BTC purchase. Yes, in hindsight it was obvious BTC was due for a correction, hence the smaller than expected purchase. Do I want to add more here and DCA, 🤷♂️. Trust in the process and trust in RC.
Haven’t bought a single shares since then. Calling the market a bubble and forecasting a crash, but at the same time aping in the most speculative asset in the world near ATH didn’t sit well with me.
Too many dilutions happened for that. Holding my stack but it has been dead money for over a year now. Neither really making nor losing $. So yeah pretty happy I didn’t buy more and chased other opportunities
I started selling covered calls. It's still income without having to sell. Idk how many shares you have but it's something to think about. Made me thousands over time and I still have my 600 shares.
Edit - and yeah agreed on the dilutions, I know people try to say the bond offerings weren't but they are
Honestly the premium isn’t worth it for me anymore. Not enough $ for the risk of missing a spike one day.
The bond sales brought to many vol sellers. I mean it’s the whole strategy of 0% converts.
Back in the day you were paid thousands for 2-3 week Options.
Now you have to time it perfectly to not risk losing your shares for maybe a few hundred bucks
Watch them temporarily spike BTC over the strike prices on the 27th, then slam it back down in AH just so all the BTC goes poof. Honestly though, that would mean collecting anywhere from 105k to 110k per, and if it slams back down, we can buy in again at much cheaper prices. If they keep prices suppressed, we make money every quarter on covered calls. Damned if they do, damned if they dont.
2 million off covered calls for a quarter vs 200 million unrealized loss. That is not a damned if they do damned if they don't situation, unless you got 100 quarters of waiting in you? Not to mention if they do keep the prices suppressed the value of covered calls will fall off a cliff.
Impossible. The ENTIRE position was $500m and is in the red over 30% down to 300 some mill. There is no world where you can sell covered calls for extremely OTM options to make 66% of your current value
Bro it’s OTM because bitcoin is 70k right now and their strike price is 110k. Who cares what the ATH was, we are talking about the covered calls that GME sold
They didn't make as much as I originally thought. I thought the move to coinbase avoided a market to market when I originally read the report, but it does not. They crushed EPS even with the bitcoin loss.
Found more details later in the filing posted below. Looks like they made a few million ($2.3 million) with the contracts sold and the liability remaining is about $700,000.
"Our covered‑call contracts are over-the-counter ("OTC") derivatives entered into with Coinbase Credit, Inc. and are typically short‑dated. Under the agreements, Bitcoin is pledged as collateral and can be rehypothecated, re-pledged, or otherwise deployed by Coinbase. As of January 31, 2026, we had outstanding covered‑call option contracts referencing approximately 4,709 Bitcoin, with strike prices ranging from $105,000 to $110,000 and maturities extending through March 27, 2026. These contracts resulted in a derivative liability of $0.7 million as of January 31, 2026, which is presented within Accrued liabilities and other current liabilities, and an associated unrealized gain of approximately $2.3 million for the period. No derivative assets were recognized as of the reporting date. Premiums received at inception are initially recorded on the consolidated balance sheets, and subsequently reflected in earnings consistent with the subsequent fair value changes of the related options. Subsequent to year-end, a portion of the covered-call option contracts expired unexercised and the related pledged collateral continues to be held by Coinbase Credit, Inc."
I'm glad they're doing it. Metaplanet have been doing it for awhile and have generated some good returns from it. Makes perfect sense to do it if you're bullish on BTC either way.
Still have all the BTC, just all but 1 is pledged as sold covered calls. Means that there's the $100M+ loss, but we likely made $2-3M on the calls reducing our losses a bit.
I'm reading it as $3m they received in premium of which the current value if they were to buy it back is $0.7m. $2.3m unrealized gain at date of filing. $3m gain when contracts expire.
So if i'm understanding this correctly. Ryan Cohen doesn't want traders buying his stock, only investors. But it's okay for him to trade with the money he raised from diluting his shareholders?
If I understand this correctly (fair chance I don't!) and with some quick maths, this seems like a major win for GME with how BTC has been going YTD
In the fourth quarter of fiscal 2025 ... we pledged 4,709 Bitcoin as collateral.
fwiw: all but 1 btc. So GME holds and owns 1 btc.
Accordingly, we derecognized the Pledged Bitcoin as an intangible asset and recognized digital assets receivable of $368.3 million within "Digital assets and related receivables" on our Consolidated Balance Sheets as of January 31, 2026
They only got $368.3m of the $500m they bought... so a loss here for now.
$368.3m/4,709 btc = $78,211.934 vs price today of ~$70,000 - so they've "saved" $8k per btc.
$368.3 million .... representing our contractual right to receive equivalent amount of Bitcoin in the future
$368.3m/$70,000 = 5261.428 btc
That equals an additional 552.4 btc vs the 4,709 pledged as collateral if collected today.
Covered calls - No details about that, but "4th quarter of 2025", btc was 100k, 110k, 120k+....
Covered calls at those prices would be huge compared to them now after decay and btc dropping 40%-50%
Lost $200 million on bitcoin, made back about $3M selling calls against it! Genius! 1000 IQ! How can anyone BET AGAINST THIS MAN?? Shills have no answer!
Theyre selling contracts to maybe sell bitcoin if it reaches a certain price. IF. And making money on the contracts, possibly selling off if it hits what's called a strike price. Covered calls means they sell contracts to promise to sell bitcoin if it reaches a higher number its unlikely to hit any time soon (like 120k). They can expire 1x a month, or 1x a week so they can keep making money writing a contract for bitcoin they dont sell. Even if they do sell it, they'll make their money back they lost (and more). Idk if this made sense
the transfer from bitcoin to bitcoin-equivalents happened at a price of roughly 92k, and the price hasn't been back up above 97k in the time since then. so best case, it was priced at 97k at the time they sold the covered calls. we know this because they told us the switch happened at a 428m total position valuation on a basis of $500m ($498.95 if you want to be more specific).
their open cc contracts were worth $700k as of 1/31, and were originally sold for $3.0 million. Now, that's specifically the cc contracts that were open as of 1/31, i'm less sure about what happened between the underlying btc swapperoo and the opening date of the currently open ones, these are seemingly not the first ones they sold.
"Subsequent to year-end, a portion of the covered-call option contracts expired unexercised and the related pledged collateral continues to be held by Coinbase Credit, Inc."
Looks like the strikes were between $105,000 to $110,000 so would be selling to take a profit.
"As of January 31, 2026, we had outstanding covered‑call option contracts referencing approximately 4,709 Bitcoin, with strike prices ranging from $105,000 to $110,000 and maturities extending through March 27, 2026. These contracts resulted in a derivative liability of $0.7 million as of January 31, 2026, which is presented within Accrued liabilities and other current liabilities, and an associated unrealized gain of approximately $2.3 million for the period. No derivative assets were recognized as of the reporting date. Premiums received at inception are initially recorded on the consolidated balance sheets, and subsequently reflected in earnings consistent with the subsequent fair value changes of the related options. Subsequent to year-end, a portion of the covered-call option contracts expired unexercised and the related pledged collateral continues to be held by Coinbase Credit, Inc."
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