Short Sellers Lost $1 Billion Yesterday in AMC and GameStop

Short sellers have been fighting retail traders all year. Yesterday, they took a major hit:

“Heavily shorted stocks have, for the last month, been less volatile than earlier this year. Today we saw an end to this,” said Ortex co-founder Peter Hillerberg.

The share price gains in AMC and GameStop generated losses for close to $1 billion for short sellers, Hillerberg said.

AMC Entertainment Holdings, Inc. was the most active stock in the entire options market. This is remarkable for a company whose market cap is only $23 billion. Apple, the biggest stock in the market, is over 100 times as large.

The options activity in both AMC and GameStop Corp. was strongly bullish, with call options (the right to purchase shares in the future) going like hotcakes.

No obvious news propelled these stocks upward. Yet hedge funds maintain their risky short positions.

This means using investors’ money to bet against stocks that gyrate wildly at the whims of retail traders. I find that to be irresponsible.

But, to quote one of my favorite movies:

Well, it could’ve been worse, right? Could’ve been my money.

Marv, Wall Street

More on AMC and meme stocks:

CHARTING THE HUGE DROP IN AMC FAILS TO DELIVER

HEDGE FUNDS HIT HARD BY MEME STOCK LOSSES, BADLY BEHIND S&P 500

HEDGE FUNDS GET SPECIAL TREATMENT DURING MARGIN CALLS

Photo: “Fitness” by Walimai.photo is licensed under CC BY-NC-ND 2.0

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