The 3 Most Dangerous Reddit Stocks
With the first quarter coming to a close, one thing is for certain: retail investors are the talk of the town on Wall Street.
For over two months, retail investors on Reddit's WallStreetBets chat room have focused their attention on dozens of companies that share one or two core characteristics. They were either heavily short-sold (i.e., plenty of investors were betting on a lower share price), or they happened to be penny stocks.
The vast majority of short-sellers are institutional investors or hedge funds. Since gains from shorting are capped at 100%, whereas losses are unlimited, Reddit's retail investors have been banding together to buy shares and out-of-the-money call options to squeeze big-money institutions out of their short positions. These short-squeeze events have proven lucrative on a number of occasions.
Source Fool.com
