Here we identify the options setup needed for a gamma squeeze in a stock like GME. Using our EquityHub we analyze the existing options position, and then look for signs of strong live options orderflow via our HIRO application.
Specifically, you want to see large open interest at call strikes just above where a stock is trading. You then want to see active call buying intraday, which may lead to hedging flow from dealers. This may start to push a stock higher.
As the stock moves higher the gamma at the OTM calls increases, which leads dealers to have to buy more stock.
