SpotGamma was involved with a top-tier group that reviewed the SEC’s report on the role of options in the January ’21 GME squeeze. Immediately following the release of the October ’21 SEC report, we also released a video explaining why we viewed options as a key driver of the January ’21 GME move.
This new analysis was recently sent to the SEC, and was noted on Bloomberg:
The SEC also fell short, according to the paper, in examining the effects of a so-called gamma squeeze, which occurs when options dealers buy a rising stock to balance their exposure to contracts they have sold, pushing shares even higher. The SEC focused on call contracts in its analysis, while overlooking the effect of put contracts, which can contribute to gamma squeezes, the academics said.
Read this Bloomberg article for more.