The GameStop (GME) Short Squeeze

Cause

Greedy hedge funds shorted more shares of GameStop than actually existed, creating an extreme vulnerability exploited by retail communities.

Process

In January 2021, massive retail buying in underlying shares and call options forced market makers to delta-hedge and shorts to cover, creating a violent feedback loop upwards.

Result

GME shares hit an intraday peak of $483 on January 28, causing catastrophic losses for several hedge funds before brokerages controversially restricted buying.

🚀 Time Traveler's Playbook (How to Exploit This)

• 🎯 Target Acquisition: GME stock and out-of-the-money call options.
• 🛠️ Core Operation: Buy GME shares and options in late 2020 or early January 2021 when the price is under $20. Use a reliable broker (e.g., Fidelity or Vanguard) that won't restrict trading. Avoid Robinhood.
• 💰 Profit & Extraction: Sell all positions incrementally on January 26 and January 27, completing your exit before January 28 when brokerages halt the buying, causing the price to crash.