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Reddit Trading Mania Could Cause ‘systemic Event’ In Markets: Strategist

by cnbc.com posted 1month ago 24 views
The retail trading flood fueled by Reddit could pose a systemic risk to markets, according to Paul Gambles, co-founder of investment advisory firm MBMG Group. A flurry of retail buying led by Reddit thread WallStreetBets sent shares of heavily shorted stocks like GameStop and AMC Entertainment skyrocketing last week, squeezing the short positions of Wall Street hedge funds. GameStop shares surged 1,625% in January and inflicted a mark-to-market loss of almost $20 billion to hedge funds with short positions against the stock, according to data from S3 Partners.

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