Love them or hate them, meme stocks are back

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Meme stocks are soaring again, delighting fans, frustrating detractors and showing Wall Street that the social media force behind the wild GameStop rally in 2021 is still going strong.

Item 1 of 2 Traders work under signage for GameStop Corp. on the trading floor at the New York Stock Exchange in Manhattan, New York City, U.S., August 8, 2022. REUTERS/Andrew Kelly/File PhotoTraders work under signage for GameStop Corp. on the trading floor at the New York Stock Exchange in Manhattan, New York City, U.S., August 8, 2022.

"It's hard not to use words like 'insane' when you look at this as a trader," said Jay Woods, chief global strategist at Freedom Capital Markets. "The first time this happened, it was more of a movement, but right now this looks like a craze where people are saying, 'Here's an opportunity' and 'Let's see if we can make a quick buck off of it.

That is well below the peak level of short interest in October 2020 when about 107% of the free share float for GameStop was sold short, exchange data shows.The rallies have dealt short investors a heavy blow. In GameStop alone, year-to-date paper losses totaled $1.28 billion, estimates from ORTEX showed.

On Tuesday, GameStop options volume hit 818,843 contracts, the highest since March 2021. For AMC, 1.9 million contracts changed hands, the most in about nine months, according to Trade Alert data.

 

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