u/Purple_Rooster ·
Reddit — r/wallstreetbets
· May 31, 2026 at 01:27
· ⬆ 181 pts
· 💬 118 comments
| View on Reddit ↗
AI Summary
Summary
The post analyzes SPCE’s short squeeze potential, arguing that a large volume of WSB call buying forces market makers to hedge by purchasing shares, creating a feedback loop that could drive the stock above $200 on SpaceX IPO day.
The author advises holding or selling based on the short float percentage rather than the call/stock price, warning that selling calls removes hedges and allows institutions to exit.
Quality assessment: Speculative retail DD with a plausible but highly contingent mechanical thesis; lacks fundamental valuation and ignores dilution risk.
Score181
Comments118
Upvote %92%
▶ Full Post Text
The company is worth \~625 million, short float is 23%. If this stock is trading at $200+/share on the morning of Spacex ipo day, it won't be because regards bought it thinking it was Spacex. It will be because of the 20 million shares out for short that have to get bought back as short sellers get stopped out of their position or margin called. The reason i mentioned the market cap is because the combined value of the Yolo on this stock on WSB alone is a considerable portion of the value of the company. One poor person buying stock typically dosen't move the needle, but a lot of poor people buying calls does. Evil institution man understands that the calls are overpriced, but understands the risk of holding the call naked. My thesis is that $20M worth of regards yolo'ing on calls causes \~155M worth of institution man buying shares to cover his calls. That's a fifth of the shares in circulation and a massive multiple of amount that is exchanged on a daily basis.
"How do i act on this if i'm already holding calls/shares?"
**The decision to hold or sell during the inevitable rally should be based on the short float, not the stock/call price.**
**By selling your call, you uncolleteralize the institution man's shares, which he will happily sell.**
SPCE has a $625M market cap, 23% short float, and a large outstanding call volume from retail. Market makers must hedge short calls by buying shares, potentially creating a gamma squeeze. If enough retail call buying forces institutional hedging, the resulting share buying could exceed daily float turnover, igniting a short squeeze. The author implies this dynamic is the real driver, not confusion with SpaceX. Trade relies on momentum and gamma/short squeeze mechanics, not fundamentals. Hold until short float drops significantly; sell if float collapses. Low liquidity, high volatility, potential for rapid unwinding if calls are sold. Company fundamentals are weak (near-zero revenue), and retail may be exit liquidity. Short interest could be manipulated or already declining.
This Reddit post, published May 31, 2026,
features u/Purple_Rooster
discussing SPCE.
1 trade idea extracted by AI with direction and confidence scoring.