The GME squeeze should’ve been an obvious topping indicator in the market.
It marked the peak of stock market excess…
Alongside all the hot biotechs, SPAC runners, and tech stocks that don’t earn anything shooting straight to the upside.
Now, the market’s looking a little different.
ARKK is down 70% and the Nasdaq is off 35% — clearly bear markets.
However, there is one mechanic involved in how GME ran that I want to share with you.
The “Gamma Squeeze.”
This is when you get a ton of options buyers cornering the market. They anticipate a stock’s price to increase, so they buy large amounts of call options.
Institutions selling the options must ramp up their shorts to compensate.
As this continues, institutions may have to scoop up more shares of stock to hedge against their shorts.
See where this is going?
A few months ago, I spoke about this in Vegas. You can watch that here:
Anticipating a gamma squeeze is one of the most powerful ways to identify an edge…
And I think I’ve uncovered a stockwiths massive potential for one.
Stock Chart
This name has seen great relative strength and a clean lift from its recent lows.
Our Trading Roadmap gives us a clear target, which we use to structure our options trade.
Here’s where it gets interesting:
The highest call option strike on all the options is too low relative to what the stock could do.
If we get a clean break out of this trading range, look for “pile-on” as momentum traders come in.
And if they start buying calls in size, it can easily overwhelm the options dealers…
Creating a continuation squeeze, as I discussed earlier.
Want to grab this ticker? You can get it by joining Precision Volume Alerts today.
Just watch this webinar about our Trading Roadmap. I’ll also tell you how to join Precision Volume Alerts.
