1/ Why so much outrage on the "buying ban"?
no it's not about "the little people".
The real reason that very few folks talk about is all about the hedgies and whales looking for suckers.
2/ In every transaction, there is a seller and a buyer. so a squeeze is always associated with forced buying. for $GME, that was short-sellers (some hedgies) suffering margin calls from their short positions, and option dealers covering the exploding delta of their short calls.
3/ So to profit from a short squeeze, one builds up position before the squeeze and trim position as price skyrockets to sell to poor forced buyers. OTM calls are great, because their delta explodes as well in a squeeze.
4/ But in an entirely engineered squeeze having no fundamental basis (news etc), once the pool of forced buyer is exhausted (as the short-sellers and option dealers went bust), the price tends to collapse.
A good example is AAL on Thursday morning.
5/ so what do whales do if they still have large positions need to be closed?
They need new s̵u̵c̵k̵e̵r̵s̵ buyers to bag-hold the underlying which is worth much less than the current price.
