Review of the Battle of Forcing Shorts, Retail Investors Triggered a Billion-dollar Hedge Fund Explosion

This article, compiled from Three Thoughts Options, reviews the GME short squeeze battle in 2021. In the past few days (January 27, 2021), both Chinese and English media have brought a big news in the financial world. That is the game station $GME, where retail investors are fighting against hedge funds! Under the explosive buying pressure from retail investors, not only did the stock price of GME skyrocket, but it also caused a blowout in the positions of Wall Street's star hedge funds. Mainstream media as well as self-media have reported the basic facts, but we hope to provide everyone with an interpretation from the perspective of professional options traders, explaining why a few ants can bring down the elephant of Wall Street. First of all, let's start with the stock GME. In just two or three weeks at the beginning of 2021, GME surged from $5 to $120. Source: Long Port1. The turning point of a junk stock GME, a physical game store, has been on a downward trend in recent years. In March last year, the stock price even fell below $3. It was undoubtedly a junk stock. However, on January 11th this year, a turning point occurred. Ryan Cohen, the founder of the former pet e-commerce company Chewy, purchased a large amount of GameStop stock and became the second largest shareholder of the company. Who is Ryan Cohen? In 2011, at the age of 25, Ryan created Chewy, a vertical online retailer of pet food and supplies. By 2016, Chewy had already become the largest online pet supplies store in the United States.