Is there really a short squeeze for GME?
Curious to get people's opinions here, because I think WSB is more or less a groupthink orgy. They seem to think a short squeeze is yet to happen, but:
- They cite S3 Partners and Ortex data as metrics for SI, but these tend to differ dramatically. As of Thursday, Ortex reported 39M short interest - way lower than what S3 reported - and a huge drop from the day before. Even comparing S3 reported SI on January 15 to the actual NYSE reported SI shows that S3 was off by over 10M. But I don't see this being talked about anywhere on WSB
- I don't think a lot of people there realize that traders delta hedge continuously to cover ITM calls. The majority of the posts on WSB expected a windfall yesterday and the price to spike because every call was ITM, but that didn't happen.
- There needs to be a trigger to catalyze the short squeeze. The gamma squeeze could have been that, but wasn't due to trading limitations. There aren't many more opportunities for gamma squeezes because the potential ITM call volumes expiring next Friday and the following are way lower than what they were yesterday. Sure, maybe people restricted from RH who move to other brokerages could increase demand, but I doubt that will be enough.
What do you guys think?
I think you're underestimating how impactful the RH shutdown was. I'm willing to bet over half of WSB users were on Robinhood, and if each of them was even planning on buying 2-3 shares that is a fuck ton of volume. If you look at the volume charts it is painfully obvious that there is a huge dip that coincides with the restriction. Also, the major catalyst is that it is a mathematical certainty that shorts have to cover. There is no way around it. Shorts cannot hold indefinitely; they are paying out the ass in borrowing interest (especially Melvin, who is obviously still in their position despite their repeated attempts to come on CNBC and state otherwise), so as soon as one is forced to cover it will set the chain reaction that is the MOASS. I agree that we likely will not a see a gamma squeeze because that usually happens when no one is expecting it, but like I said before, the shorts MUST eventually cover. Unless they can drive the price down to the point where they don't lose everything (which would have to be 30-40 per share), they will eventually have to cover.
The old shorts definitely covered, just looking at the short interest estimates. Even so, while the shorts have to cover, I would argue that there is significantly less than there was before that the squeeze might not happen.The old shorts definitely covered, just looking at the short interest estimates. Even so, while the shorts have to cover, I would argue that there is significantly less than there was before that the squeeze might not happen.
They most certainly have not. You’re talking about tens of millions of shares. Volume is way too low. Which estimate are you looking at for SI?
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