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Stocks in video game retailer Gamestop rise sharply amid "short squeeze"

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Shares of U.S. videogame retailer GameStop were up by overt 100% in trading on Monday, on course to reach another record high after having already gained about 250% since the beginning of the year.

Traders believe that the reasons for the jump in the shares are short-sellers quickly buying back into the stock to cover potential losses, defined as a short-squeeze, and retail investors piling in to benefit from the surge.

The short betting was pretty evident with 100% of the shares available to borrow to speculate against the company already out on loan, FIS' Astec analytics data as of Friday showed.

Short sellers typically borrow and sell shares in companies they expect will fall in price, hoping to buy them back at a lower price and pocket the difference.

The trading strategy is high risk in that losses are theoretically unlimited when the stock rises instead of falling.

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#gamestop #finance #shortselling #GlobalNews
Category
U.S. & Canada
Tags
Gamestop, Short squeeze, short
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