After the success of last week’s short squeezes, everyone wants to know which stock is next.
Last week ushered in a new era on Wall Street – one in which retail investors are banding together to create massive profits by creating short squeezes.
And now that they have proof that the concept works and they can beat the hedge funds and make boatloads of money, I believe the practice is here to stay.
As a result, a huge amount of focus has shifted to finding the next big short squeeze candidate.
The short position with a target on its back this week is the iShares Silver Trust (SLV).
The buying frenzy on SLV sent shares up to $27.76 at yesterday’s open – an 11% increase from Friday’s close.
The big question now is whether the Reddit crowd can force another massive short squeeze like GameStop Corp. (GME) experienced last week.
I’m not holding my breath. Here’s why…
Where’s the money?
While we’ve seen the immense buying power that the retail investors that are actively attacking short positions have, what novice investors may not understand is that an ETF like SLV is much harder to force a short squeeze on than a regular stock.
I won’t bore you with the detailed mechanics of it all, but long story short, SLV would be far more difficult to short because, unlike stocks, there is not a finite number of shares.
An authorized participant can simply exchange the required amount of physical silver to create additional shares of SLV. Conversely, shares of SLV can be exchanged for physical silver.
Basically, short sellers looking to cover their positions could work with authorized participants to create more shares of SLV, rather than buying existing shares, to avoid the buying spree that would cause a short squeeze.
So, unless the Reddit investors are able to corner the entire silver market, a short squeeze on SLV likely won’t work.
And with the forum divided on whether or not to pursue buying silver – since Citadel Advisors LLC (a hedge fund and enemy of the Reddit crowd) would stand to profit handsomely from rising silver prices due to its large silver holdings – the movement likely doesn’t have the full support it would need.
In my opinion, there are better ways to play the hottest new trend in the market…
How do I get some?
If you were looking to jump into the short squeeze trading craze and make some big money, I’ve got some bad news for you…
The easy money in stocks like GameStop Corp. (GME) and AMC Entertainment Holdings, Inc. (AMC) is likely over.
But that doesn’t mean that the next targeted attack is over or that trading will return to normal. As I’ve said, this trend is here to stay, but to be successful is going to require a better strategy.
Going forward, hedge fund managers are going to be far more cautious about short positions. The opportunities to make significant profits will still be there, but tracking where the big money is flowing will be key to knowing which shorts squeezes will succeed.
And that’s where my proprietary system comes in…
In the Spotlight: Taking Short Position Hunting to a New Level
Later this week, I’m going to be launching a brand-new service focused on showing you how you can take advantage of this short squeeze phenomenon.
It’s called Super Squeeze Profits.
I’ll be fine-tuning my scanners to look for huge order flow in the options market, combined with stocks with a low float above 20%. The higher the short interest, the better chance of the squeeze happening.
And the more traders shorting the stock, the higher the price can go. That’s why I’m so excited to get all of you on board and into these trades before the flood of investors.
I’ll have more details for you later this week as my team and I put the finishing touches on the new service, so keep an eye out for more information.