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Day-trader obsession with hated stocks takes over options market


Day-trader obsession with hated stocks takes over options market
By Katherine Greifeld Bloomberg,Updated January 27, 2021, 9:59 a.m.
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(Bloomberg) The Reddit-led hunt for heavily shorted stocks is migrating to the options market.
The most-hated stocks have scorched the naysayers, with a Goldman Sachs Group Inc. basket set for its best month since at least 2008. That’s been accompanied by a “dramatic shift” in options activity toward heavily-shorted securities such as GameStop Corp., BlackBerry Ltd. and Palantir Technologies Inc., according to Barclays Plc analysts.
Frenzied buying of short-dated call contracts has exacerbated the pain for the bears. Normally dealers selling the bullish options buy the underlying stock as a hedge. With enough volume and there’s been plenty that can drive the stocks higher, making the calls in-the-money. While retail traders had previously favored large-cap tech stocks, the pivot into sma ....

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