Hey, I’m trying to learn so excuse my ignorance! I think I understand that in a gamma squeeze, shorts want price to stay below max pain where there is the highest OI. But for a stock that is not optionable, but heavily shorted (looking at $RELI for example) how do you know when the stock was most heavily shorted, and at what price it was most heavily shorted? My assumption is that one could use that as a significant buy in level in anticipation of a squeeze.
Also, thanks for this forum and community. Happy to be a part of it!
A gamma squeeze isn’t related to the short interest, it’s not a short squeeze.
Also, the Market Makers aren’t really getting trapped here, they want to push the price up and extend the option chain, forcing people into higher strikes which expire worthless when the stock tanks so they can collect all those option premiums, they’re also collecting profits all the way up and down through the bid/ask spread.
Here’s a reddit post from Holi that explains it well.