Zhitong Finance and Economics noticed that without fundamental information, Game Posthouse (GME. US) share price more than doubled. Short sellers were squeezed, and retail traders used the option of the day to amplify the rise of stocks that had been hit hard.
The increase of the game station on Monday was impressive association rise At the beginning of 2021, the enthusiasm of MEME shares captured the imagination of the public, and short-term traders made the stock appear inexplicable crazy fluctuations. However, a careful observation of the scale and craziness at that time will reveal that MEME share craze Compared to the latest MEME shares There is still a lot to go.
In the first round of inflation three years ago, Game Posthouse In a few days, the share price of the stock soared by more than 1000%. At that time, retail traders counterattacked Wall Street tycoons who were short of the stock on the Wall Street Bets forum in Reddit. Today, most of the "Reddit Raiders" who once obtained sufficient time and funds from the stimulus measures and employment policies during the pandemic have returned to work, bearing the burden of higher interest rates. Some people entered the market late, even in the recent rise, they are still losing money.
In addition, traders eager to gamble now have a large number of betting options. At that time, due to the COVID-19 epidemic, casinos and racetracks were closed, and the stock market became the main game in the city. Since then, gambling has become the mainstream in the stock market. Anyone who wants to bet can click a few mouse buttons on his mobile phone, and then he can click on whatever he wants“ game ”Bet.
Professional short sellers also basically gave up targeting companies with relatively small circulating shares, fearing that the power of social media might lead to squeeze. Although the trading volume of short-term options is still rising, it is far below the level in 2021.
Peter Atwater, president of Financial Insight and part-time professor of William Mary University, said: "These things are always short-lived, just like solar eclipses - they happen, disappear for a long time, and then happen again." "But if you look at them, you will find that they are always in extreme mood."
Monday's purchase was triggered by a post by Keith Gill on the evening of X Sunday. Gill It is an idol of retail trade, nicknamed“ Roaring Kitty ”Before disappearing from social media in June 2021, he promoted the initial craze. In less than an hour, Game Posthouse The market value of Gill Returning to Twitter is a sign of the return of prosperity. Once MEME shares Beloved AMC Entertainment (AMC. US) rose by more than 80%. Newly listed Reddit rose as much as 14%. Among cryptocurrencies, Roaring Kitty tokens increased by more than 4000%.
As the trading entered the afternoon, most stocks fell sharply—— Game Posthouse The closing price rose by 74% - which calmed people's concern for another game MEME shares Speculation about the beginning of the boom. Here are some financial indicators that can explain why:
option
In the past few weeks, the trading volume of options has rebounded, but it is completely different from the level in 2021. About 700000 contracts changed hands on Monday, more than four times the average of the past month. With the change of a large number of $30 and $34 contracts, call options led the rise.
However, at the peak of meme mania in 2021, there will be millions of contracts in a single transaction. The most active day of that year was January 22, when the trading volume reached 8.5 million.
Mixed order
One of the drivers of the 2021 boom is that most retail traders have not yet Game Posthouse , not to mention the higher price. In January of that year, Game Posthouse It has always been the most popular stock on the trading platform for individual investors, and its purchase orders far exceed the sales orders.
On Monday, that was not the case. although Game Posthouse It is the stock with the largest trading volume on the Fidelity platform, but the orders for selling stocks are almost equal to those for buying stocks. This shows that retail investors are selling each other, rather than the only driving force for the rise of stocks. For all that, Game Posthouse It is still far from reaching a single day peak. The stock needs to rise more than three times from Monday's closing price to reach this high.
There is less money to buy stocks
When Roaring Kitty and the current Game Posthouse When CEO Ryan Cohen started to stir up a stem fever, the interest rate was close to a historical low. With the Federal Reserve and Congress injecting trillions of dollars of stimulus funds to support the U.S. economy that fell into recession during the epidemic, the stock market and cryptocurrency were soaring.
Game Posthouse The last legendary story of the Fed became the focus three years ago, and then the Federal Reserve began to raise interest rates at the fastest rate in a generation in March 2022 to cool inflation. Now, the stock market and the economy are in a different position, and retail traders have seen a reversal of fate, because high borrowing costs have reduced their holdings in risky assets.
In addition, the credit card delinquency rate of small banks reached the highest level in 30 years, while that of large banks reached the highest level in 10 years. This means that the liquidity of small investors may be at a low level, and the end of the "stay at home" order indicates that "YOLO" people have returned to work or school and are no longer addicted to trading applications.
MEME Cryptocurrency Mania
The huge nature of cryptocurrency without intrinsic value has also absorbed a large number of retail investors' cash. According to CoinGecko's data, although Game Posthouse No relationship, but used at the end of January Game Posthouse The token created by its name, logo and code rose by more than 1400% on Monday, and then fell back.
Based on the popularity of tokens on social media platforms, the so-called emoticons are prone to violent fluctuations. The transaction price of this token is usually less than one cent. As long as a few traders inject a small amount of cash, the number and price of cryptocurrencies will soar.
Scar in 2021
The mania of memetics in 2021 overturned the US stock market and trained some Wall Street professionals, but after the bear market in 2022, the mania did not end well. JPMorgan Chase The data compiled in 2022 shows that YOLO people have lost all their money in the meme stock boom.
Therefore, although the activities of the organization on Monday recalled people's memories of the peak in 2021, it has not yet arrived. BI The estimated data compiled shows that in the first quarter of 2021, retail trading orders of stocks and ETFs accounted for 24% of the total market turnover. BI data shows that, by contrast, the proportion in the first quarter of 2024 is slightly higher than 17%.
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