So how did it all happen? While Reddit traders have often been described as unsophisticated and inexperienced young people trading on stimulus checks out of their parents' basement, the strategy they employed — a short squeeze that eventually turned into a Gamma squeeze — is actually quite intricate.
Once that happens, these investors will hope to buy the shares back at a lower price than what they have paid to borrow the shares in order to pocket the difference when they return the shares to their broker. This is a classic"sell high buy low" short-selling strategy. That's exactly what happened, except the losses were so enormous that Citron Research, for example, had to cover the majority of its GameStop short positions atThe short squeeze on GameStop turned into a gamma squeeze when Reddit traders started to useTo understand what gamma is, investors need to look at delta, which measures how much you can expect the option to move for a given move in the underlying stock.
As the value of the underlying stock gets closer and closer to the call option's strike price, dealers will have to buy more and more stock to hedge, pushing up the stock price even more. That's known as a gamma squeeze, and that's what retail traders exploited to their advantage. "If a strategy works, people tend to keep using it until it stops working," Sosnick said."This has been one that's worked out spectacularly well, so in the short term, markets adjust."
Yawn ........... this article
Intricate? It's a prank 🙈
Why would $gme not issue more share to raise capital? They need it right? Shorts would be happy to buy. $amc is. $tsla is several times a year.
Remember when BillAckman shorted the US economy in March and pocketed $2B? What a patriot! 🇺🇸
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Full court press against the people as usual by the media.
So let's not be critical of the hedge funds who shorted 140% of stocks to cause this🤮
Can’t be more intricate than clickbait + paywall.
$TOP THE REAL $TEAL on WALL $T.
More good news please(((