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Here comes the GameStop rally, round 2

February 24, 2021, 11:40 PM UTC

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It’s hard to believe that a full month has passed since Reddit’s r/wallstreetbets first put the game on GameStop. Have we talked about anything else since?

It was late Friday, Jan 22nd when I remember reading a Barron’s article about certain curious market movements—GameStop stock had shot up more than 40% during the day for little apparent reason—but it wasn’t yet clear exactly what was unfolding. The following week was one to remember: A few days that spawned federal investigations, multiple book and movie deals, plus a Congressional hearing.

You might have thought that the exorbitant hand-wringing in Washington and beyond might have closed the chapter on the “YOLO rally” and that perhaps the meme stonk frenzy was an anomalous blip, not the new normal.

Then again, here we are, on Feb. 24th; GameStop stock more than doubled today and is up another 65% in after-hours trading to about $151. And there’s a perfectly reasonable explanation for it: r/wallstreetbets is running its playbook again.

Here’s the thing. A big part of the reason the Redditors chose the end of January for their short squeeze was because many of them owned GameStop stock options—relatively complex instruments (at least compared to regular stocks) that apps like Robinhood have made much easier to trade for retail investors.

Such options, known as puts and calls, often expire at the end of each month, with the stock price at the time determining the value of the options and whether investors owe or are owed shares. This can create additional end-of-month trading volatility, as Barron’s recently explained.

Well, guess what? February is a short month. That means that options are set to expire on Friday, two days from now—the last trading day of the month.

You can bet that r/wallstreetbets is well aware of this: One user who goes by Jaboyles posted a screen shot of their portfolio showing $5,385 worth of call options expiring on Friday. Some have a slightly longer lead time: another forum member posted a photo showing they bought more than $31,000 worth of GameStop options expiring on March 12th, betting the stock would be at least $90 by then. “Back for round 2…30k YOLO,” they commented.

In light of the looming expiration date, you can expect some market mischief to be afoot this week among the Reddit trading community, with a potential crowd effort to keep the GameStop stock price high and those options in the money.

Of course, short-sellers know this too. And the upcoming deadline may be a reason why GameStop short interest has plummeted in the past few weeks, from 132% of float on Feb. 8 to just 46% as of Feb. 16, my colleague Rey Mashayekhi reports. In other words, hedge funds significantly pared back their bets against the stock ahead of the option expiration dates.

Will the Reddit-fueled short squeeze become routine at the close of each month? Who knows—much depends on how much money traders are willing to “YOLO” away—but the possibility may be enough to ward off the short-sellers.

Let the games begin (again).


Lastly, we want to acknowledge that Jeff John Roberts, one of The Ledger’s co-founders who has been a major contributor to this newsletter since its inception, has left Fortune to become executive editor at Decrypt, starting today. We will miss him but wish him well. Good luck, Jeff!

Jen Wieczner





NBA star Russell Westbrook led a $63 million investment round for Varo Bank... Nvidia is making special new chips for mining Ethereum... Marqueta filed for an IPO... Swedish fintech Klarna is considering a direct listing...Square bought 3,318 ($170 million worth) more Bitcoins... Tether and Bitfinex settled an investigation by the New York attorney general for $18.5 million without admitting wrongdoing... Former Bank of England governor Mark Carney joined Stripe's board... MicroStrategy upped the ante (following Tesla and Square) with an additional $1 billion Bitcoin buy... A Swiss bank Bordier & Cie started offering crypto trading... Lindsay Lohan continued selling NFTs with a Daft Punk piece priced at $15,000... An anonymous donor sent $800,000 in Bitcoin to a Cape Cod hospital... Coinbase was valued at $100 billion before it goes public in the coming days...




Robinhood took a beating from Congress... Bankers can't put a "fair value" on Bitcoin... Treasury Secretary Janet Yellen called Bitcoin "an extremely inefficient way of conducting transactions" (but she's hopeful about a digital dollar)... Chinese regulators put stricter requirements on internet loans... Epic is settling a class action lawsuit by paying Fortnite and other players $78 million worth of digital (in-game) currency... Shares of Long Blockchain (formerly known as Long Island Ice Tea Corp.) were delisted by the SEC... Bitcoin is blocking security professionals from shutting down a malware botnet... Bitcoin fan and Ark Investment Management CEO Cathie Wood's Tesla-heavy fund took a beating... Bill Gates decried Bitcoin "mania"... MoneyGram suspended its partnership with Ripple and XRP tumbled further... Bitcoin dropped back below $50,000...




The price—paid with 300 ether—of a unique version of the Nyan Cat meme, based on a blockchain, that was sold at auction last week. Digital artworks and other collectibles sold as so-called "nonfungible tokens," or NFTs, are generating lots of buzz lately—as well as millions of dollars' worth of proceeds. As our former Fortune colleague (and author of the New York Times piece on the subject) Erin Griffith noted, the company behind CryptoKitties is now selling N.B.A. game highlights as NFTs—and made $48 million on them in the span of 24 hours alone this week.



Why would you spend $5,000 on an MP4? The difference between owning it and not owning it was just an email that said, ‘You won.’ I can see how you would call bullshit on that.

That's a quote from Beeple, a digital artist who's become the emerging leader in NFT (nonfungible token) art, from a new profile in Esquire. Indeed, collectors have paid as much as $777,777 for his 3D animations that live on the blockchain as opposed to in frames in people's homes. Still, this new art world sees the industry differently, according to the piece: "The fact that you can’t hang the art on the wall is beside the point, they contend. 'Physicality is a bug, not a feature,' says Tyler [Winklevoss]. 'There was no scarcity in ones and zeroes until you enter with the blockchain.'"

Beeple, who the article reveals is actually a 39-year-old suburban dad outside Charleston, S.C. named Mike Winkelmann, is now being compared to famed graffiti painter Banksy, and has more work going up for auction at Christie's starting tomorrow.


Tax tips every Robinhood trader should read — Chris Taylor

Bitcoin and Tesla bulls run for cover — Bernhard Warner

Bitcoin’s market cap tops $1 trillion — Chris Morris

Tesla has made more money on Bitcoin this year than on selling cars and batteries — Shawn Tully 

Blockchain lands $3 billion valuation after $120 million fundraising — Robert Hackett

Robinhood’s brand is severely damaged: 56% of account holders are considering leaving the app — Lance Lambert

SEC is ‘dead wrong’: Former chair Mary Jo White defends Ripple in pivotal crypto case — Jeff John Roberts

Someone—or something—has amassed over $2 billion in Dogecoin —Chris Morris

FIS chief risk officer on preparing to return to the office — Greg Montana (commentary)



Tesla's CEO has been entertaining all of us with his seemingly stream-of-consciousness tweets about Dogecoin and crypto in general lately—that is, maybe all of us except Jen, who's still blocked by Musk on Twitter for reasons unbeknownst to her (Elon, if you're reading, you can unblock me here). In his tweet above, Musk gives perhaps his best explanation yet for why Tesla used its corporate cash to buy $1.5 billion in Bitcoin.

This edition of The Ledger was curated by Robert Hackett and Jen Wieczner. Contact them at and

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