Gamma Squeeze

A gamma squeeze happens when rapid stock price movements force options sellers to buy or sell shares in large quantities, pushing the price even further in the same direction. Here's why it matters: options sellers hedge their risk by trading the underlying stock, and when prices move fast, their hedging needs spike dramatically—creating a feedback loop that amplifies volatility. You'll hear about gamma squeezes during highly speculative trades or when retail investors pile into the same stock. For example, if TechCorp stock suddenly jumps 10% in a day, options sellers might be forced to buy thousands of shares to stay hedged, which pushes the price up further. It's a real phenomenon, though often overstated in online forums.