Welcome to Extreme Investor Network, where we provide you with unique insights and expert analysis on all things finance. Today, we’re diving into the recent explosion in meme stocks like GameStop and AMC Entertainment that has left many market experts scratching their heads.
Interactive Brokers market strategist Steve Sosnick recently pointed out some suspicious activity surrounding the surge in meme stocks. He highlighted a significant increase in trading volume of deep out-of-the-money call options just before the return of “Roaring Kitty” on social media.
These options, which would only be profitable if the stock price soared significantly, saw a massive uptick in trading volumes last week. And sure enough, GameStop stock skyrocketed, reaching as high as $65 on Tuesday, up 271% from previous levels.
But the question remains: what sparked this sudden surge in meme stocks? Sosnick compared the current situation to a similar scenario with Bed Bath & Beyond stock in 2022, where a surge followed by a crash occurred after insider activity was revealed.
While everything may be legal, there are still doubts about the true motives behind the recent meme stock frenzy. Share prices of GameStop and AMC Entertainment have already begun to decline from their peak levels, signaling a potential correction in the market.
At Extreme Investor Network, we’ll continue to monitor the situation and provide you with the latest updates and expert insights to help you navigate the ever-changing world of finance. Stay tuned for more exclusive content and analysis from our team of finance experts.