{"id":206657,"date":"2024-05-14T12:30:00","date_gmt":"2024-05-14T16:30:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=206657"},"modified":"2024-05-15T04:01:16","modified_gmt":"2024-05-15T08:01:16","slug":"attack-of-the-memes-day-2","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/stocks\/attack-of-the-memes-day-2\/","title":{"rendered":"Attack of the Memes, Day 2"},"content":{"rendered":"\n<p>Yesterday, <a href=\"https:\/\/twitter.com\/SteveSosnick\/status\/1790098731393515611\">on social media<\/a> I commented, \u201cI did not have \u2018once again spend much of the day discussing $GME\u2019 on my agenda for today.\u201d&nbsp; For better or worse, it remains on my agenda for today.&nbsp;<\/p>\n\n\n\n<p>Don\u2019t get me wrong.&nbsp; I really enjoy discussing market-related oddities, and a periodic bout of meme-stock madness is one of them.&nbsp; I also like the fact that so many people feel that my perspective might be useful in understanding what occurs when a stock rockets higher seemingly out of nowhere.&nbsp; It\u2019s tough trying to parse rational explanations when markets do irrational things, but I like to think that I try my best.<\/p>\n\n\n\n<p>That is why I think we did a good job <a href=\"\/campus\/traders-insight\/securities\/options\/the-markets-prion-disease-returns\/\">yesterday in explaining<\/a> why the jump in GameStop (<span class=\"stock-ticker\" data-stock-ticker=\"GME\">GME<\/span>) was not as \u201cout of the blue\u201d as it might have seemed.&nbsp; With 20\/20 hindsight, we noted how the volumes and open interest in what were then far out of the money calls had expanded exponentially.&nbsp; The stage was set for an explosive rally, and the social media post from \u201cRoaring Kitty\u201d was perfectly timed to capitalize on it.<\/p>\n\n\n\n<p>After further thought, it occurs to me that the stage had really been set last month, when Trump Media &amp; Technology Group (<span class=\"stock-ticker\" data-stock-ticker=\"DJT\">DJT<\/span>) exhibited its own meme-like activity.&nbsp; We even entitled our piece \u201c<a href=\"\/campus\/traders-insight\/securities\/stocks\/meme-stocks-the-sequel\/\">Meme Stocks: The Sequel<\/a>.\u201d&nbsp; The ferocious rally in DJT occurred for different reasons, conflating politics with markets, but it was \u201cproof of concept\u201d that a re-run in the \u201ctraditional\u201d meme stocks might be in order.<\/p>\n\n\n\n<p>Think of it this way: I happened upon the movie \u201c<a href=\"https:\/\/www.bing.com\/ck\/a?!&amp;&amp;p=fb1fd9df731619f7JmltdHM9MTcxNTY0NDgwMCZpZ3VpZD0wNzgxOWY2MS1jMzdhLTZkMDctMjhiOC04Y2Y0Yzc3YTYzNWMmaW5zaWQ9NTIwMg&amp;ptn=3&amp;ver=2&amp;hsh=3&amp;fclid=07819f61-c37a-6d07-28b8-8cf4c77a635c&amp;psq=imdb+swingers&amp;u=a1aHR0cHM6Ly93d3cuaW1kYi5jb20vdGl0bGUvdHQwMTE3ODAyL2Z1bGxjcmVkaXRz&amp;ntb=1\">Swingers<\/a>\u201d recently.&nbsp; Besides being the launching point for several huge Hollywood careers, it brought around a resurgent interest in cocktail culture and swing music.&nbsp; Various musical acts either returned to prominence or found new fame in the film\u2019s aftermath (Big Bad Voodoo Daddy, for example), only to return to relative obscurity afterwards.&nbsp; The movie signaled to those bands that the time was ripe for them, and I believe that DJT\u2019s rally did the same for GME and friends.<\/p>\n\n\n\n<p>I am a bit surprised that the rallies have continued apace today.&nbsp; I am certainly not the best interpreter of memes, but I do know my old movies.&nbsp; So when Roaring Kitty followed up with the end of \u201c<a href=\"https:\/\/www.imdb.com\/title\/tt0091042\/?ref_=nv_sr_srsg_0_tt_2_nm_6_q_ferris\">Ferris Bueller\u2019s Day Off<\/a>\u201d, when Ferris says, \u201cYou&#8217;re still here? It&#8217;s over. Go home. Go\u201d, I took that to mean that he had taken his profits and was telling others to do the same.&nbsp;&nbsp; What do I know?&nbsp; The stock continued to rally this morning, though by midday it was off its highs.&nbsp; And AMC signaled that its stock was a better sale than a buy, <a href=\"https:\/\/www.bing.com\/ck\/a?!&amp;&amp;p=4e7de43cc2292aabJmltdHM9MTcxNTY0NDgwMCZpZ3VpZD0wNzgxOWY2MS1jMzdhLTZkMDctMjhiOC04Y2Y0Yzc3YTYzNWMmaW5zaWQ9NTQ5OQ&amp;ptn=3&amp;ver=2&amp;hsh=3&amp;fclid=07819f61-c37a-6d07-28b8-8cf4c77a635c&amp;psq=amc+stock+sale&amp;u=a1aHR0cHM6Ly93d3cubXNuLmNvbS9lbi11cy9tb25leS9tYXJrZXRzL2FtYy1jb21wbGV0ZXMtMjUwLW1pbGxpb24tc3RvY2stc2FsZS1kdXJpbmctbWVtZS1yYWxseS1zaGFyZXMtanVtcC05MC9hci1CQjFtbUpYTz9vY2lkPUJpbmdOZXdzU2VycA&amp;ntb=1\">when it sold 72.5 million shares<\/a> yesterday.&nbsp;&nbsp; So sure, by all means it was worth double that this morning.&nbsp; (Though it is now up \u201conly\u201d 25%).<\/p>\n\n\n\n<p>I know that many of you are drawn to high volume\/high volatility situations.&nbsp; GME is now among the most actively traded stocks at IBKR, and I understand why.&nbsp; I understand the allure.&nbsp; Please make sure you understand the risk\/reward!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yesterday, on social media I commented, \u201cI did not have \u2018once again spend much of the day discussing $GME\u2019 on my agenda for today.\u201d  For better or worse, it remains on my agenda for today.  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Prior to joining Interactive Brokers, Sosnick held senior trading roles at Morgan Stanley, Lehman Brothers, and Salomon Brothers, where he completed the firm\u2019s famed training program.","sameAs":["https:\/\/ibkr.com"],"url":"https:\/\/www.interactivebrokers.com\/campus\/author\/steve-sosnick\/"}]}},"jetpack_featured_media_url":"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2024\/05\/gamestop-amc-featured-img.jpg","_links":{"self":[{"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/posts\/206657","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/comments?post=206657"}],"version-history":[{"count":0,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/posts\/206657\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/media\/206658"}],"wp:attachment":[{"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/media?parent=206657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/categories?post=206657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/tags?post=206657"},{"taxonomy":"contributors-categories","embeddable":true,"href":"https:\/\/ibkrcampus.com\/campus\/wp-json\/wp\/v2\/contributors-categories?post=206657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}