GameStop was halted twice on Monday after the market opened and has slowly trended downward since.
The stock was forced to lose its momentum despite the heavy trading volume seen early in the trading day.
GameStop’s volume surged nearly 5 times its average trading volume on Monday but was prohibited from surging.
GME Stock Halt October 31, 2022.
Retail investors are calling S3 Partner’s announcement a setup, or trap to burn shareholders.
But Wall Street can easily create a big sell order in the market despite of heavy volume from retail, the question here is why not go long with them?
Last year, GameStop and AMC shareholders were able to inflict hedge funds who were betting against the two companies with billions of dollars in losses.
Are retail and hedge funds at war with one another?
It certainly seems so.
Is a GameStop Short Squeeze Likely?
Despite the market advantages financial institutions have over retail investors, large continuous volume over a period of weeks could trigger bigger price action for GME stock.
One-day rallies of heavy buying volume isn’t enough to combat market makers.
Like last year, it’s going to take continuous buying pressure to compound the momentum that will likely result in a GME short squeeze.
So, will GameStop see a massive short squeeze again?
Here’s what we know.
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And if you’re not investing in the stock market and would like to learn how to buy GameStop stock or know where to buy GameStop stock, read my beginners guide on how to start here.
GME stock
GameStop closed at $40.53 on Wednesday, August 17th.
Trading volume is currently sitting at 9.3 million with 12.6 million now being GameStop’s average volume.
Understanding the short-seller
GameStop has taken the entire internet and finance world by a storm. What is happening nowadays.
Retail investors over at r/wallstreetbets have opened Pandora’s Box on short-sellers and hedge fund institutions.
Short-sellers are investors who short the stock.
Shorting a stock is the process by which sellers essentially bet on the stock price to drop.
They borrow stocks at a higher cost and sell the stock low, profiting the difference.
How short selling works
We’ve seen GameStop drop down and consolidate at $40 after its gamma squeeze peaked close to $500 per share back in January.
The stock has made a massive climb after some serious consolidation. It looks like GameStop is prepping itself for another gamma squeeze.
Could we finally see that GME squeeze everyone’s been waiting for?! I think its time.
See, GameStop’s short interest is still rather high and not all short sellers closed their positions back in January.
This means the stock still has loads of room to go bonkers.
What is a short-ladder attack?
A short-ladder attack is a strategy performed by short-sellers where they bid on the stock at a significantly lower sell price and purchase it from one another.
Thus, driving the share price lower.
How do you spot a short-ladder attack?
When the stock knows nothing but gains, but something keeps pushing it down until over and over again, that’s when you’ll know.
Why GameStop has potential for a second short squeeze
Short-sellers didn’t learn their lesson from the first time. GameStop stock is still being heavily shorted.
With GameStop becoming a technology company, its value has not only significantly gone up but it now has even more potential to keep driving its momentum.
Retail investors have a strong conviction towards GameStop investment. This means they’re not willing to sell the stock which in turn creates a supply and demand scenario with short-sellers who have to close their positions.
GameStop NFT Marketplace News
Short Share Availability and Short Borrow Fee Rate
You can see GameStop’s short share availability and short borrow fee rate using this link (via. Short interest data)
This number of course changes every day and can be expected to rise as hedge funds continue to short GameStop stock.
However, the short borrow fee rate isn’t a catalyst for GME to squeeze.
I’m excited for my subcommunity that holds both GME and AMC stock because both are about to skyrocket past Pluto.
GME Stock Analysis
Roensch Capital goes over the data for trending stocks.
The information is very easy to understand and gives you insight in the market from an analysts perspective.
Be sure to check out recent videos as they’re being uploaded to stay updated with any changes that occur in the market with GameStop.
Important Advisory
It is important to note that I am not a licensed financial advisor.
Like many traders and self taught investors, all speculation is based on educated estimations based on highly reliable analysis, patterns, and documented news charts.
Volume is key to a second GameStop short squeeze
Just like AMC, GameStop will need to see a continuous runup in share volume.
When retail investors continue to buy and hold GameStop stock, short-sellers shorting the stock eventually have to buy back the stock.
This demand and supply scenario results in various gamma squeezes.
The gains we’ve seen with GameStop have been a series of gamma squeezes, or incremental gains.
Usually what follows after gamma squeezes is a short squeeze if it has enough volume.
The volume of shares depends on how much retail investors are purchasing GameStop stock or selling it.
This chart is only reference and is not GameStop’s current price – GameStop Squeezable
How Soon Will A Second GameStop Short Squeeze Happen?
There is so much volatility occurring in the stock market at the moment.
Such volatility is usually a sign of an upcoming short squeeze as we saw back in January.
Not only are retail investors experiencing a lot of volatility, but GameStop stock seems to be in bullish territory which is great for volume.
FOMO (fear of missing out) continues to bring in new retail investors which is a great driving factor to the stocks volume.
GameStop announces fourth quarter earnings for 2020 (ARCHIVE)
is GameStop squeezable? – GameStop Short Squeeze
Saving GameStop
Retail investors now have the power to save any company they wish to save.
Now it’s only a matter of time for GameStop to step up and raise capital so that they can innovate and provide more value back.
GameStop is currently looking for ways to operate more efficiently.
While the Reddit community was able to keep them from going bankrupt, the company as a whole will need to continue kicking butt.
Here’s what’s been going on with GameStop recently.
Current GameStop news
is GameStop still squeezable? – GameStop Short Squeeze
GameStop introduces Matt Furlong as the new CEO of the company.
GME shares are still up nearly 1100% this year-to-date with the company’s valuation at $15 billion.
Bullish GameStop options are still currently being heavily traded
Prior to GameStop, Matt Furlong worked at Amazon in Australia overseeing the growth of operations.
He also worked in brand and marketing for Procter & Gamble years before.
The skills to grow operations and to properly brand and market will benefit GameStop immensely.
What can retail investors do to tackle shorting?
If retail investors want to counter GameStop’s stock price from plummeting, they’ll have to continue to hold and buy the stock.
This short squeeze play will require patience.
Important advisory
If you hold a position in GameStop, it’s important that you ask yourself what your reason for holding is.
Does your DD provide you with the confidence to stick to it longer if need be?
If so, stick to your convictions and trust the process.
Unfortunately, I didn’t get in on GameStop before it gamma squeezed so I took a position in AMC instead.
Taking this position has been one of the best financial decisions I’ve ever made.
I would take a position in GameStop if it was more affordable.
Regardless, I like the stock and I love the community even more.
Will GameStop finally short squeeze?
I think GameStop is preparing itself to put short sellers out of their misery.
The stock has been havoc to hedge funds and we can tell they’re giving out primarily due to this massive breakthrough we’re seeing now.
And although I personally don’t hold GME stock, I have a lot of awesome memories at GameStop which I would actually like to share with you at the end of this article.
Now let’s talk about a little justice.
A major hedge fund that was attacking GameStop has now been reported to lose a significant amount of money.
As long as the stock continues to be shorted and held, GameStop can expect a series of gamma squeezes to continue pushing the stock up.
This will inevitably lead to the ultimate short squeeze.
Fundamentals can also drive GameStop’s stock price up.
The company will have to run efficiently by being able to meet projected goals.
Although this is not a fundamental play, mainstream media still has some influence over this.
Short sellers continue to face devastating losses from shorting GameStop.
Hedge funds are about to burn their second hand after playing with fire again.
FAQs
Gamma squeeze vs Short squeeze
A gamma squeeze are momentum gains. These usually occur from call options closing in the pocket resulting in heavy buys or purchases in the market.
A short squeeze is vigorous and can spike with no warning. This is where you see 100% gains in a matter of seconds and minutes. A short squeeze can even reach 1000% and 10,000% gains.
Is AMC a good stock to buy? Is it too late to buy AMC Entertainment stock?
If you’ve been following the stock market news you’ve probably heard of all the hype surrounding AMC stock and GME (GameStop).
It wasn’t long before traders flocked over to AMC after the massive gains GameStop yielded due to the high percentage of shorting within the stocks.
Shorting a stock is the process by which sellers essentially bet on the stock price to drop.
They borrow stocks at higher cost, sell it, and buy back the stock low, profiting the difference.
Well, investors over at r/wallstreetbets found that by purchasing stocks at low price in heavy volumes it would drive a short squeeze.
A short squeeze occurs when a stock jumps sharply higher, forcing short sellers to buy higher, causing them to lose money.
Lots of it.
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Will we see a squeeze with AMC?
There are numerous news that lead traders and investors alike to predict an upcoming short squeeze like we saw with GME (Gamestop).
CEO of AMC announces AMC is no longer going bankrupt (via. Los Angeles Times)
Vanguard, Wells Fargo, BMO Harris, BlackRock, Fidelity and many more institutions are buying AMC stock while it’s low (via. CNN Business)
AMC is currently the most shorted stock (via. MarketWatch) Unfortunately MarketWatch has hidden AMC from their list. Retail investors suspect foul play.
AMC is also currently one of the most held stocks surpassing Apple (AAPL) and Tesla (TSLA) (via. Nasdaq)
More publicity and awareness has average people investing in AMC which is driving volume for a potential squeeze
We’re seeing huge institutions are investing in AMC stock while it’s affordable.
And because it’s affordable, we’re also seeing average people invest in this stock.
As long as the stock is being held, though lows and through highs, a squeeze like we saw with GME (GameStop) is certainly possible.
AMC stock closed at $14.48 on July 7th. The stock has been on discount.
However, the community sentiment remains bullish meaning retail investors keep buying and holding the stock to squeeze shorts from their positions.
Shorts continue to short ladder the stock causing the downtrend we’ve been seeing.
But AMC wants to keep climbing.
As long as AMC shareholders continue to hold and buy the dip, short investors are at a disadvantage.
Great news for AMC Entertainment (Archive Data)
Other news that can further drive the share price of AMC stock is the announcement that most AMC theaters have now begun to open up.
AMC’s short borrow fee as of 7/7 is 11.40%, via. Stonk-O-Tracker.
The fee is going up after being down for many months.
What is a short borrow fee?
The short borrow fee is the interest shorts pay for borrowing shares of AMC stock.
This means shorts are losing money every day by not closing their positions.
A surging short borrow fee rate could incentivize shorts to close their positions due to higher borrowing costs.
Why the short borrow fee rate matters
It costs shorts interest to hold while it costs the retail investor absolutely nothing to hold.
Shorts are losing money every day they hold because of this interest fee for borrowing the stock.
For some reason shorts still think AMC Entertainment can go bankrupt, although they have enough money to continue doing business.. I know, I don’t understand this either.
As hedge funds like Citadel lose money, the short borrow fee only increases those losses.
AMC’s share price might be on discount right now, but hedge funds are experiencing losses on top of losses.
They’ll eventually have to close their short positions, will you miss it?
Vanguard has proven to be useful, and it has never failed me before.
Important Advisory
It is important to note that I am not a licensed financial advisor.
Like many traders and self-taught investors, all speculation is based on educated estimations based on highly reliable analysis, patterns, and documented news charts.
On another note: It would be wise to not invest more than you can afford to lose. In other words, invest money you would be okay with losing for simpler terms.
Ignore the bogus headlines from The Motley Fool and other sources
AMC and r/wallstreetbets have been given lots of negative press from the likes of The Motley Fool and other sources; shaming the purchase of the stock.
Fortunately, we’ve been backed up by Mark Cuban, Chance the Rapper, and other big names.
Influential outlets with powerful hedge fund partners (institutions who short the stock) have been attacking traders and investors by providing false information wherever they can.
What we’re seeing right now is that the big guys are losing money due to the price of shorted stocks going up.
They will say and do whatever they can to divert the public from trading this stock.
My personal suggestion to you is to not let these sources intimidate you.
Do your research to see how the stock price has been manipulated through bogus headlines and short-ladder attacks.
GameStop Stock – Can GME hit $1000 – How high will GME go?
A while back I wrote an article debating which stock you should invest in, AMC or GME stock? The premise of that article was to identify which stock was more convenient for the new retail investor.
See, both are great momentum stocks to hodl, but GME stock is a lot more expensive for the newcomer to buy.
And although AMC has now become the more popular stock, I have a good feeling those hodling GME stock can still see massive gains.
Here’s why.
Welcome to Franknez.com – today I want to talk about GameStop stock, ticker symbol GME. Lets look at the data that states this stock is not done climbing up.
Lets get started!
If you’re like me, you probably didn’t get a chance to get in on GameStop before it began to create a ruckus in the financial world.
Or perhaps you were lucky enough to get a few shares.
I’m a strong AMC shareholder and will not buy GME stock only because I rather increase my position in AMC.
AMC’s short interest is higher, utilization is higher, and so are the shares on loan.
It’s also more affordable.
But don’t get me wrong, the reason I’m publishing this post today is because GME stock has enough data that proves it has more juice to squeeze.
So, if you’re holding GME stock, this article should help you armor up your conviction towards your stock.
GameStop Short Interest
GameStop’s short interest is still rather high. GME’s current short interest is sitting at 20.05% via. Ortex data.
Just to compare, AMC’s is at 20.59% which a short interest of 20% or higher is considered extremely high.
Short interest the number or percentage of short shares that have yet to be covered. For stocks with high short interest this means it is possible to squeeze shorts out of their positions.
GameStop stock is considered to have high short interest therefore it has slack to keep moving up. Not all shorts have covered their positions!
If you hold GameStop stock, keep holding it. The longer you hold it, the more money short sellers lose on paper. Once they can’t afford to hold GME stock they’ll be forced to cover.
Remember, it costs you nothing to hold.
GME Utilization Rate
GME stock utilization rate is currently 100%. This means the entire available shares in the market are currently being loaned to short the stock.
An institution that has not sold GameStop is Vanguard.
Vanguard is one of AMC’s biggest institutional holder who continues to buy the stock to-date.
So if there’s something GameStop shareholders can take from this is that institutions are still holding GME stock, and there are still enough short sellers to squeeze out of their positions.
How High Will GME Stock Go?
how high will gme go? Can GME hit $1000 –
So, can GME stock reach $1,000 per share. It’s certainly a possibility given that GameStop’s dark pool trading percentage is rather high, according to Stonk-O-Tracker data.
Dark pool trading in GameStop has ranged between 30%-50%. This means 30%-50% of short selling has occurred behind closed doors.
Short sellers are able to keep their short borrow fee down with this loophole as well as conjure up naked shares to swap with one another.
However, they’ll eventually have to close every synthetic share they’ve ‘borrowed’ to short the stock.
This is massive for GameStop just as it is for AMC.
Is It Too Late To Buy GME Stock?
Is it too late to buy GME stock? Can GME hit $1000
I would say that you will no longer be able to buy GME stock below 3-figures.
If this figure is too expensive for you to build your portfolio then it absolutely is too late.
However, if you’re looking to diversify your momentum stock portfolio, GME stock could be a good stock to hold.
Otherwise, you’re better off buying the heavier shorted stock that is significantly more affordable at the moment, AMC.
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Are you holding GME stock? Let me know in the comment section below how high you think the stock can go.
Are you suffering from FOMO (fear of missing out). While we’re not financial advisors, we are certainly pro opportunity. So, which meme stock should you invest in? AMC or GME? And, is it too late to invest in either of them?
Let me walk you through the facts so you can decide which is the better buy between the two.
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Before we get started it is very important to mention that both these stocks are currently very volatile.
It is suggested that all financial decision is made based upon your own due diligence. GME stock has seen incredible gains in the past two months and analysts are determined AMC is going to have a similar run, if not bigger.
AMC & GME Short Share Volume
Here are the short share volume numbers as of June 7th, 2021.
GME Short Share Volume: 350,000 shares (via. Fintel)
Now, this is only Fintel so take it with a grain of salt.
Why is this important?
The number of short shares available represents the number of shares that have yet to be covered by short-investorsor hedge funds.
Short-investors and hedge funds alike are betting on both AMC and GME to completely fail. This means they don’t believe AMC or GME (GameStop) can innovate as businesses to thrive in the marketplace.
The r/wallstreetbets community and millions of people would beg to differ. This is why AMC and GME have take the stock market by a storm.
What happens when shorts close/cover their positions?
Both AMC and GME are going up in share price. When short-sellers cover their positions at a higher share price than they borrowed the share, they lose money.
Because they bought a share at a higher price, the stock price continues to go up as long as retail investors hold their positions. This essentially creates a supply and demand scenario between short sellers and retail investors.
What happens if shorts keep holding and don’t cover their positions?
Short-sellers can only hold for so long. See, they eventually have to pay an interest on the shares they borrowed.
Here are the current short interest for both AMC and GME stock (June 3rd, 2021):
As you can see, AMC has a bigger interest rate than GME at the moment. This means short-sellers are paying a much larger fee to short AMC stock.
This borrow rate fee increases as the demand for the stock rises.
Why is this important to the retail investor?
The borrow fee interest pressures short sellers to close their positions before they pay bigger and bigger fees for borrowing AMC and GME shares.
When a short-seller closes their position higher than they borrowed the share for, they lose money. The retail investor then continues to see a rise in share price. This ladies and gentlemen is where retail investors begin to experience a series of gamma squeezes before a short squeeze.
What’s the difference between a gamma squeeze and a short squeeze?
A gamma squeeze usually occurs when retail investors bet on the price of a stock such as AMC or GME to go up. Share price will then increase due to specified call options or contracts.
A short squeeze essentially occurs when a heavily shorted stock increases in value and short-sellers must cover their positions.
AMC and GME short squeeze
AMC
AMC Short Squeeze
We saw a gamma squeeze from AMC when the stock price shot up to about $20 per share. This was mainly due to retail investors buying call options.
We have not seen a short squeeze from AMC just yet. This is why AMC stock is a very popular choice for people who missed out on GameStop the first run.
AMC’s share price is also significantly lower and more affordable to the average retail investor than that of GameStop. With more investors getting in on AMC, another gamma squeeze is on the horizon. If retail investors continue to hold their positions, a short squeeze is inevitable.
GME experienced its gamma squeeze right before we saw it short squeeze all the way up to $500. Its gamma squeeze consisted of perpetual gains beginning around the $20 mark all the way up to $100 before it squeezed and saw sharp gains.
After GME squeezed, it hovered around $40. We recently saw another GME gamma squeeze sending it back up to the $100 range.
GME’s mastermind, Keith Gill AKA Roarking Kitty (deepf******value), has also mentioned doubling down on GameStop investment. You can find sources everywhere online.
More institutions are buying and holding AMC than GME stock
We’re seeing more and more institutions such as Vanguard, BlackRock, and Charles Schwab continue to add and hold to their AMC positions (via. Nasdaq). As of May 21st, the top whales continue to add to their long positions.
AMC Institutional Buyers (as of 5/21)
GME on the other hand has seen quite some selloff from institutions. Which by the way is okay. Investors are simply closing profits with the gains they’ve seen from GME via. Nasdaq.
GME Institutional Buyers (as of 5/21)
Innovation: AMC VS GME
While it’s hard to see how GME can innovate their retail stores, AMC doesn’t seem to have that problem.
I personally believe innovation has a strong influence in the decision-making process when investing in either AMC or GME.
GameStop can continue to sell to gamers online. We won’t see much change to their retail stores. AMC on the other hand can innovate with virtual reality but ultimately doesn’t have to since people are going to the movie theaters again.
AMC stock is the most popular choice for new retail investors
If you’re a new retail investor looking to get into one of these stocks, AMC is more than likely your best bet.
The stock has a lot of upside potential.
AMC stock is currently affordable
The stock has not hit a short squeeze yet
It is one of the most shorted stocks in the market
The stocks market cap, volume, and short borrow fee keep increasing
GME stock is a good pick for current GME holders
If you’re currently holding GME it looks like you will continue to see volatility. You can take advantage by buying the dips and holding your positions.
If you didn’t cash out when GME peaked, there’s a probability you will get another chance if GME continues to stay in bullish territory. This of course is heavy speculation.
I want to ditch Robinhood – what other platform can I use?
Ditch Robing-Hood: Invest in GME and AMC using another platform
If you’re looking to ditch Robinhood, we strongly suggest switching to a real broker account.
Robinhood tarnished GameStop momentum by preventing retail investors from buying more stock.
If you’re looking to get into an affordable stock that has a high potential of squeezing, then AMC will be your best bet. It’s fundamentals also determine this stock is a good long-term buy.
Although GME’s hype can still cause a potential squeeze in the future, it’s still much lower than AMC’s probability. If you have a position in GME then I recommend holding and taking any gains you can. Otherwise, keep holding if you love the company.
Whether you go for AMC or GME stock, you should always invest in a company you truly love and believe in. Think long-term for the most part. If you can make some money short-term, even more power to you.
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