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They were mostly closed prior to the huge price spike, the spike was caused by retail buying, probably thinking they were causing a squeeze. You can read the de
by gregoryjjb 5y ago
They were mostly closed prior to the huge price spike, the spike was caused by retail buying, probably thinking they were causing a squeeze. You can read the details in the SEC report on the topic (note the massive drop in short interest in Figure 5).
https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf https://www.sec.gov/files/staff-report-equity-options-market...
- tartoran 5y agoDoesn’t closing positions cause a price spike in the first place? It seems to me that they kicked the can down the road waiting for a better opportunity to do so.
- gregoryjjb 5y agoIt did cause some price spiking, but the FOMO caused a much bigger spike and eclipsed the effects of the squeeze. Why do you think they "kicked the can down the road"? Short interest is still around 1%, down from over 100% in January. The hedge funds in question realized huge losses in Q1.