The Silliness over GameStop

This has been a crazy week for holders of GameStop (GME), and it's not stopping even after hours. Shares were relatively quiet last week until Monday morning pre-market when they shot up from $63 to $135 in the early morning hours.  When the market opened they exceeded $150 briefly, and today after closing around $150 they now change hands at $220 after hours!

This type of price movement is rare, whether it's short covering, speculative buying or a combination of both we don't know for sure.  We do know that a hedge fund which had a rather large short position through long Put options had to raise over $2B in recent days.

While it's tempting to short this stock, it's almost impossible to borrow, so an attractive play may be to buy short-term Puts on this stock. However, we're not doing anything yet.  Anyone who bought Puts yesterday just got blown out of their position as the stock is already over $100 higher than yesterday's close.

When this stock returns to normal it will come crashing down, and traders on the wrong side will be hurt.