When it goes back down I'm going to make a nice profit out of this craziness.
Or you know, lose a lot if it somehow stays insane for an entire year.
I know what my money's on.
Like you?
I already liquidated 30% of my position and got my initial investment back. Now I'm playing with house money. I gotta say, it's a lot more fun being on this side (with the memes and the fun mottos), than being on the side you're on!
In other words, best case scenario is GME drops from 300 dollars to 10 bucks and then you make 100% on your money. That's not really a nice profit for the risk you're taking.
At any rate, my point isn't you can't make money off this, it's that there's no easy arbitrage opportunity happening on GME. It's basically trading like a volatile stock would trade, and it's being priced as such. Whatever free or easy money you think there is to be made on GME is likely just a coin toss.
I worry that I can lose money even if my bet is correct, if the volatility goes down and thus the premiums also go down.
Case in point: had friends who bought GME puts 2 days ago. GME stock went significantly up in price since then, and so did my friends' puts.
Why did their puts go up in price if the stock price went up? Because IV increased, which pumped the price of options across the board, both puts and calls. When IV crush occurs, the exact opposite happens.
Note also that option buying is negative expectation on average due to the premium demanded by sellers.