How institutional traders are getting in on meme stocks

Yahoo Finance Video
6 個月前

Like it's 2021 all over again, meme stock trading has taken over Wall Street. While some have claimed there is very little rhyme or reason behind the momentum, it doesn't negate the sheer volume of trading from retail investors. 

All Star Charts Chief Options Strategist Sean McLaughlin joins Yahoo Finance to discuss the recent return to the meme stock craze and how investors should consider getting involved.

McLaughlin comments on how institutional investors get involved in meme stock trading: "Especially in these meme stocks where you get a lot of retail interest and a lot of people chasing hot money returns, when you get players using call options, for example, to express their bullish bets, well, who's on the other side of those trades? That's generally market makers and dealers. They're shorting calls to sell them to the retail investor. Well, they're not in the business of taking directional risk. They want to be as delta neutral as they can. So as they're selling calls to the to the swelling demand out there, the only way they can hedge their position or the best and easiest and most efficient way for them to hedge their position is to buy stock."

For more expert insight and the latest market action, click here to watch this full episode.

This post was written by Nicholas Jacobino