And people wonder why the stock market is referred to as a casino
Bed Bath & Beyond’s 492% Rally Is Supercharged by Retail Traderst.co/eVnp72RAmT
— Stalingrad & Poorski (@Stalingrad_Poor) August 17, 2022
20-Year-Old Student Acquires 6% Of Bed Bath & Beyond, Makes $110 Million In 3 Weekst.co/0YswIjGCpk
— Jack Posobiec 🇺🇸 (@JackPosobiec) August 18, 2022
via ZH:
We thought that today’s story about Ryan Cohen filing to dump his entire stake in Bed Bath & Beyond after sparking a massive gamma squeeze using deep OTM call options would be the most absurd meme-related story of the day. Boy, were we wrong.
In a late Wednesday article published on the FT which at first (and second, and third) read comes across as a cross between absurdist satire and a PR puff piece, we read the day’s feel-good “riches to riches” story in which a 20-year-old university student, Jake Freeman, who is an applied mathematics and economics major at the University of Southern California, managed to accumulate 6.2% of the entire outstanding stock of Bed Bath & Beyond at under $5.50 share (did we mention he is a 20-year-old university student) amounting to $27 million, which he announced in an activist 13-G letter to BBBY Management on July 21, 2022, and less than a month later sold out of his entire stake – thanks to the insane gamma squeeze in the stock – not through some prime broker but through his TD Ameritrade and Interactive Brokers accounts,making $110 million in the process!
The Art of a Gamma Squeeze
1. Buy out of the money – YOLO calls in SIZE.
2. Force Dealers to buy stock to hedge the calls they sold you.
4. Pump up the bullish sentiment with bs
5. Find more greater fools
6. Dump your shares before they do.
*Jay Powell´s U.S. equity market. pic.twitter.com/65d4VaIOQI
— Lawrence McDonald (@Convertbond) August 18, 2022