2 ms·
Matt Levine had a very good explanation of this in his newsletter today: https://www.bloomberg.com/opinion/articles/2021-01-25/the-game-never-stops https://www.
by retzkek 6y ago
Matt Levine had a very good explanation of this in his newsletter today: https://www.bloomberg.com/opinion/articles/2021-01-25/the-game-never-stops https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga...
The TL;DR is that r/WSB et al primarily trade in options, which provide significant leverage and force market makers to take increasingly large positions in the underlying to hedge.
- tamiral 6y agor/WSB has held mostly shares of the company and a survey on the subreddit found that users own 8% of GME shares, that's if everyone was truthful, so no 8% isnt enough to move the market when everyone is buying shares and not options. The fact is GME pumped above all time highs due to retail investor hype and from click bait articles on all the financial news sites + specific scenarios of a gamma squeeze mentioned here....