Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by rednerrus on Monday January 11, 2021 @05:17PM
(#25738239)
It's what's driving TSLA's wild growth.
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Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by moltenguardian on Monday January 11, 2021 @11:32PM
(#25742312)
Unlikely, for the gamma squeeze to work on TSLA, the Market Makers need to hold the shares after the options expire. Otherwise when the options close, they wouldn't need to maintain their exposure. For reasons we don't know, the shares remain high even after the expiration.
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by edoceo on Monday January 11, 2021 @06:58PM
(#25740113)
I don't get it, how?
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by kinghajj on Monday January 11, 2021 @07:38PM
(#25740611)
1. Retail investors buy TSLA calls.
2. Market makers sell these calls, and so buy TSLA shares to cover their position.
3. Due to #2, TSLA shares appreciate, as well as the calls from #1.
4. Retail investors see all the money being made, and FOMO in to buy more calls; go back to #1, repeat.
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by beezle on Monday January 11, 2021 @08:15PM
(#25740973)
TSLA has a pretty small float which is a large part of that.
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by im3w1l on Monday January 11, 2021 @08:11PM
(#25740930)
Would this really happen be a relevant dynamic over long time periods? I would assume that at some point the market makers get nervous and stop selling calls?
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by dilyevsky on Monday January 11, 2021 @08:29PM
(#25741094)
Why? they have cover and already pocketed fees
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by objektif on Monday January 11, 2021 @09:04PM
(#25741337)
It does not have to be long time its up more than 5 folds in the last few months.
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by im3w1l on Monday January 11, 2021 @09:41PM
(#25741567)
By long time periods I meant > 1 day. Maybe for a few hours some algorithm can do it's thing mindlessly, but then some real person will look at holdings with human judgement and start worrying. But I guess it depends who you think will be doing the marketmaking, and how stupid you think they are.
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by colinmhayes on Monday January 11, 2021 @10:01PM
(#25741719)
tsla is up 22x in the past year and a half
Re:What Is a Gamma Squeeze in the Context of Stock Trading?
by edoceo on Monday January 11, 2021 @08:27PM
(#25741082)
Ok, I see so around #3 sell to close? Or do you take the underlying?