What seems to be fueling this spike is an online community of traders, who congregate in places like Reddit’s “Wall Street Bets” forum and hype up individual trades. Lately, they’ve made buying short-dated call options on GameStop’s shares — an aggressive bet that the shares will rise — a favorite position. Short sellers profit when a stock has plunged and they can buy those same shares back at a lower price. Of course, with GameStop’s shares surging, those investors are losing a lot of money. On Monday, the small traders on Wall Street Bets and the messaging site Discord were encouraging each other to hold on to their positions as the short-sellers ran for the exits.

Source: New York Times January 25, 2021 17:55 UTC