3 ms·
I think this 20%+ stock move is mostly a combination of: 1) Heavy short option interest going into earnings 2) A large beat announced in after hours Major ma
by rybosworld 3y ago
I think this 20%+ stock move is mostly a combination of:
1) Heavy short option interest going into earnings
2) A large beat announced in after hours
Major market players can take advantage of large earnings surprises by manipulating a stock in after hours. It is possible to trigger very large movements with very little volume because most participants don't have access to after hours trading.
When the market opens the next day the "false" gains should typically be wiped out unless the move is large enough to force the closing of certain positions. In this case, it looks like there was a clamor to escape long puts and short calls.
- dpflan 3y agoYes, the affect of short positions during price jumps is not always discussed / hidden variable.
- cma 3y agoProbably more from 50% growth guidance they gave for next quarter and how much that beat expectations.
- bagacrap 3y agoSkepticism is why momentum works in stocks. People tend to be afraid to buy, or even want to short, stocks that have just risen a lot. That's why it may take a while for a stock to rise to its true price after new information comes out. The momentum behind NVDA as well as some other tech stocks right now (SMCI, META, NFLX) is frankly stunning. Nary a dip for 6 months. There is so much FOMO in the AI trade that I don't think it crashes back down to earth very soon. Still I'm way too scared to try to get in late. And in this case the F in FOMO is real. Not just a feeling of missing out, but fear that all your other investments are going to zero as AI replaces entire industries, for example.