LOS ANGELES, June 28, 2021 (GLOBE NEWSWIRE) — GameStop and AMC are in the headlines, but they are not alone. Other companies experience intense stock price pressure from short sellers and those looking for a hostile takeover either in the form of buying the shares on the open market at a steep discount or forcing a bankruptcy.
“It is not uncommon for companies to experience a downturn and then become the victims of these types of attacks,” says Matt Kohrs of the Moon Gang. Matt covers the squeezes and provides education on the mechanics of how these attacks work and how they can be defended.
One such defense to these attacks is, historically, for a so-called “White Knight” to come in and buy enough shares to raise the price of the company so that it is no longer appealing to the short sellers and those seeking a hostile takeover. Currently we’re seeing retail investors take on this role and they’re doing it incredibly well.
Matt continues, “Basically what happens is that enough shares are purchased to raise the price which in turn puts pressure on short sellers. As the price goes up, the cost to maintain the short position goes up and they start to lose money; ultimately, if the price goes high enough, the short sellers may be forced to cover, and it is at that time that we see the short squeeze happen.”
Matt also commented that even though we may not see a short squeeze, there are other squeezes such as gamma squeezes that may be caused by other market internals such as unusual options activity. And it is this activity that makes up the core of Tiblio’s “Squeeze Finder”. This tool, historically unavailable to retail investors, analyzes trade activity on companies and highlights those that are building up to experience such a squeeze.
“We’re making this information available to retail traders in a format that is digestible and actionable. This availability of or democratization of information is very important to me and is core to our values at Tiblio,” said Leon Smith, Co-Founder and CEO of Tiblio. Leon explains: “The screener seeks out companies that are experiencing this trading pattern that indicates there is a higher probability that the price is going to move in the near term. I’m incredibly excited to be able to offer this screener to the community.”
Tiblio released the Squeeze Finder screener to work in both directions in the market. That is for stocks that may go up or down. In conjunction with the screener, Tiblio encourages rational, professional trading with options education, trading plans, and trade analysis tools to help retail investors refine their trading practice and drive profitability over time.
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