According to data from financial analysis company Ortex, in the past five trading days, investors have lost an estimated US$930 million (approximately Rs 679 billion) due to their short positions in meme stocks GameStop and AMC Entertainment.
At the core of the so-called “skunk” retail trading frenzy earlier this year, GameStop’s stock price has risen by a third in the past week, while the stock price of movie operator AMC has risen 39%.
Ortex said that the current estimate of short-term interest in AMC is 18.3% of free float, and the short-term interest rate on GME is 21.8% of free float.
Ortex data shows that only yesterday, short sellers lost more than US$200 million (approximately Rs 1,460 crore) in each of these two stocks. GameStop closed 13% higher at US$180.6 (approximately Rs 13,190), the highest level since April 30.
Earlier this month, analysis conducted by PiiQ Media, a Massachusetts-based cybersecurity company, showed that bots on major social media sites have been hyping GameStop and other “meme stocks,” although the extent of their impact on prices is unclear.
Eric Deaton, president and managing director of the Fortune Union of New York, said: “You may be able to make some quick trading money, and possibly a lot of money, but in the end, this is a bigger fool theory.” Overvalued stocks, it is expected that “bigger fools” will buy them at higher prices in the future.
Analysts mostly ruled out the possibility of a short squeeze, which drove GameStop’s gains in January, when individual investors using Robinhood and other apps punished hedge funds that bet on the stock and forced them to liquidate their positions. Short position. Many GameStop buyers took clues from online investment forums on Reddit and elsewhere.
GameStop’s options market activity has returned to the top of the list in a social media-driven retail trading frenzy, which shows that investors are betting on higher prices, higher volatility, or both.
Refinitiv’s data shows that retail investors have been buying a large number of out-of-the-money options at a much higher price than the current stock price.
Thomson Reuters 2021 ©