So it looks like the wall street bet crowd over on Reddit is doing it. They are going for a gamma squeeze on Game Stop (GME).
If you are newer to investing or have not hear if the gamma squeeze here’s a basic definition.
A Gamma squeeze is a transient increase in the price of a stock based on an investor buying many options to drive up the prices of select stocks due to option sellers needing to hedge their trades on the underlying stocks.
How this works for GME is the stock prices rises so fast that the entire available options chain ends up in the money. This happened Friday as the 60 1/29 call was the highest strike. Over the weekend market makers added additional options up to 115.
This morning GME traded
Up to $136 and has now come back to around $95.
These kind of moves are killing the large institutional shorts and they are screaming foul. We ha e had a few more lazily written pieces by figures like Jim Cramer that feel like they are trying to help their professional buddies out.
I’m excited that the WSB crowd is making money. I have no position at the moment, but the feeling of sticking it to the man is great to watch. Market makers pull these moves all the time, but when it happens to them it’s illegal or there’s mischief a play. I would not be surprised if a movie is not made if it plays out like some have predicted on Reddit.
I do think there is a ton of risk with this trade, but it if you have money you are willing to lose it might be worth buying a few share just to be a part of this history.
I bet these institutions will pull some shady tactics to get their money out. At this point lawsuits are cheaper than just going bankrupt based on their naked calls.
