Meme stocks (GME, AMC, BB, SPWR) are soaring following the online return of "Roaring Kitty," best known for the GameStop (GME) short squeeze of 2021. The Kobeissi Letter EditorinChief Adam Kobeissi and IG North America CEO JJ Kinahan join Catalysts to discuss what to expect from the meme stock surge.
Kinahan explains that participation in the most recent meme stock surge was not as high as anticipated, as people are more cautious about how long the rally will last. He anticipates the options volume to "continue to explode" due to the amount of capital needed to put up, the stocks being hard to borrow, and a slow news cycle.
Kobeissi believes the current meme stock rally is starting to feel like the 2021 craze: "Yesterday, everyone was a bit skeptical if this was going to last or not. Today, it's clearly lasting." He adds that some hedge funds looking to short meme stocks may be repeating the cycle. However, many hedge funds are considering sitting the surge out, with Kobeissi saying, "I think right now it's from a risk perspective. A lot of these funds are starting to say, maybe we should just stay away to both directions."
When considering getting on the meme stock bandwagon, Kinahan says, "The first thing you should say is not 'how much can I make,' but, 'how much can I lose?'" He says that anyone looking to buy should do it in a small manner, as stock movements are happening very quickly overall.About Yahoo Finance:

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