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Re: MycroftHolmes post# 295669

Wednesday, 02/03/2021 10:48:05 AM

Wednesday, February 03, 2021 10:48:05 AM

Post# of 461265
Usually I like to sell covered calls into these spikes but I am thinking short hedge funds made a huge strategically error in taking on heavy leverage in the form of shorting excessively more than the float in many stocks in the face of govt stimulus and relaxed fed so AVXL could possibly squeeze like others have done recently.
If there are rolling squeezes in the market with other funds getting in on the act by shorting at the new mooned prices at some point the pressure on liquidity of these funds could reach critical mass and there could be an explosion of squeezes and a unwinding of long positions where there is heavy concentration of deployed money like FAANG+M. Possible systemic risk from over leveraged short funds whose prime brokers have supplied them with unlimited counterfeit shares to borrow and short. Analogous to the 2008 liquidity meltdown with its huge amount of synthetic securities betting short in the form of Collateral Debt Swaps.
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