Got GameStop?
02/04/2021 |
When a call option (which allows you to buy a stock at a fixed price for a fixed period) on, say, GameStop is purchased, another party must sell it. Rather than selling a naked call, the counter party (most often a market maker) will usually buy the underlying stock as a (delta) hedge. Thus, heavy demand for calls can push up share prices causing more option buying, squeezing short sellers.