Thanks! The short squeeze should end when the short interest gets down into the low double digits. The gamma squeeze is constant variable factor caused by call option buyers. It depends on the number of options contracts (open interest), if options are expiring soon, and how many of the options are in the money. Generally the greater these are, the more gamma squeeze there will be.
@@THEDEAN911 everything sounds so complicated. But correct me if i'm wrong. During trading hours stock dips now and then, this is due to some retail invrstor running away and selling their shares and also because hedge are closing their positions? And the reason for retail inverstor to keep buying the dip is the keep available shares away from the hedge, so when contracts expire there will be even less shares available to cover thus creating the gamma squeeze ? Could you explained in this case what happens if the contract expires OTM vs ITM ?
During market hours price changes based on buyers and sellers. Keep in mind that the hedge funds are short therefore they must buy shares to close their position causing the price to increase. The funds/institutions have also been bidding the stock back and forth in “ladder attacks” to lower the price while most were restricted from trading (could only sell). The gamma squeeze is always a factor when people are buying calls, the more calls in the money the greater the squeeze and yes having fewer shares available will amplify it. Maybe I’ll make a follow up video if it helps.
That was the idea in buying the dips (less shares for hedge funds), but I think they were able to get out of their positions while the retail market was manipulated (locked out). Short interest is only ~60% now. Still high but I wouldn’t expect a huge squeeze unless call buyers (gamma squeeze) or big share buyers drive the price up. It’s possible we’ll see another run up, (not as big) but I feel like overall being shut out for the past week ended this. It’s really just a snowball effect and a question of whether it gets going fast enough.
Lastly a lot of hedge funds / institutions were on the same side as WSB and actually controlled far more of the shares. Once people like micheal blurry got out, it became much more difficult to “hold the line”.
Great explanation, how do you know when the squeeze ends ?
Thanks! The short squeeze should end when the short interest gets down into the low double digits. The gamma squeeze is constant variable factor caused by call option buyers. It depends on the number of options contracts (open interest), if options are expiring soon, and how many of the options are in the money. Generally the greater these are, the more gamma squeeze there will be.
@@THEDEAN911 everything sounds so complicated. But correct me if i'm wrong. During trading hours stock dips now and then, this is due to some retail invrstor running away and selling their shares and also because hedge are closing their positions? And the reason for retail inverstor to keep buying the dip is the keep available shares away from the hedge, so when contracts expire there will be even less shares available to cover thus creating the gamma squeeze ? Could you explained in this case what happens if the contract expires OTM vs ITM ?
During market hours price changes based on buyers and sellers. Keep in mind that the hedge funds are short therefore they must buy shares to close their position causing the price to increase. The funds/institutions have also been bidding the stock back and forth in “ladder attacks” to lower the price while most were restricted from trading (could only sell). The gamma squeeze is always a factor when people are buying calls, the more calls in the money the greater the squeeze and yes having fewer shares available will amplify it. Maybe I’ll make a follow up video if it helps.
That was the idea in buying the dips (less shares for hedge funds), but I think they were able to get out of their positions while the retail market was manipulated (locked out). Short interest is only ~60% now. Still high but I wouldn’t expect a huge squeeze unless call buyers (gamma squeeze) or big share buyers drive the price up. It’s possible we’ll see another run up, (not as big) but I feel like overall being shut out for the past week ended this. It’s really just a snowball effect and a question of whether it gets going fast enough.
Lastly a lot of hedge funds / institutions were on the same side as WSB and actually controlled far more of the shares. Once people like micheal blurry got out, it became much more difficult to “hold the line”.