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Memestock Pop-Off. GameStop Corporation (GME) shares soared as much as 126% off their Friday close, the stock’s largest single-day spike since the height of the memestock frenzy in January 2021! Why has GME surged in such dramatic fashion, and could this development be a harbinger of good tidings for your crypto bags?
While wild swings in GME triggered circuit breakers to halt trading numerous times this morning, highlighting the immense amount of realized volatility from this move, GME had been displaying unexpectedly high volatility throughout May after a short squeeze at the start of this month already sent the stock rallying by 40%.
Monthly options on US-listed stocks are set to expire this Friday and market participants were heavily long in-the-money GME call positions for this expiration, forcing the dealers who sold these calls to repurchase stock as the price rose to hedge their exposure, a textbook example of a short squeeze.
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