428% Short Interest?! Massive Short Squeeze Incoming...

As if Nvidia talk wasn’t getting old enough, the name “Roaring Kitty” is the annoying step-brother right along with it. Unless you’ve been living under a rock, you’d know that Keith Gill (Roaring Kitty) is pretty much all over the place right now.

(Source: Quartz) 

With his glorious conquests on Gamestop this year and in 2021, as well as his latest Chewy fiasco, he’s no doubt popularized the strategy of capitalizing on short squeezes. And right now, it’s got every degenerate trader scouring through reddit forums for opportunities like they just downed three espressos. 

(Source: Giphy) 

Yet, while most of the focus has seemed to revolve around beat up stocks, with no real “value”, as if pity and rags to riches is the main motivation for picking a “stonk” to target - one widely known ETF may just be Wall Street Bet’s next big hit. 

An ETF? What? 

Yes, I know. Very unconventional from what we’ve seen recently with huge short squeeze opportunities throughout this meme stock era. But out of all places, this phenomenon proved itself once again to show face within broader markets. Such as the poor man’s Gold itself: Copper, for example. 

(Source: Mining.com) 

News surfaced yesterday that Copper got in the short squeeze action as traders expected vital shipments of copper to arrive in U.S. ports. Once the shipments arrived, the shorts would cover their positions and go about their happy day. 

However, in light of simple supply and demand economics, the shipments didn’t show up. So not only did this unexpected copper pie surprise lower its supply in the U.S., but it signaled an uptick in demand resulting in a cue of panic as pessimists rushed to cover their shorts. 

(Source: Giphy) 

As expected, this resulted in copper prices shooting up faster than my grandma’s blood pressure after watching Patrick Swayze in Dirty Dancing. Hence, massive short squeeze. 

But still, what does this have to do with the looming opportunity that could rise soon (next week even) on this overlooked ETF? 

Well my friends, hold my beer. 

(Source: Giphy) 

While the stock market’s been partying like it’s 1999 with record highs and talks of interest rate cuts, there’s an under-the-radar bombshell: the SPDR S&P Retail ETF ($XRT) is apparently sitting at a mind-blowing 428% short interest. 

(Source: ETF Channel) 

Yes, you read that right—428%. Out of 4.6 million shares outstanding, there are a whopping 19.7 million shares in the hands of short sellers. To put that into perspective, based on these numbers the math states it would take between 5-7 days to cover all existing short positions…

Not only resulting in a frenzy of covering, but an explosive uptick in demand buying. 

(Source: Giphy) 

Now I’m no fortune teller here, but these numbers are absolutely unprecedented while holding the potential to ignite another short squeeze that could make the GameStop saga look like a warm-up act.

Plus, when you factor in the already existing bullish rally that is occurring across the broader market, one small reddit trader storm could be all it takes for the final domino to fall and create a squeeze on $XRT. 

(Source: Giphy) 

This of course is why short squeezes have become the go-to strategy for every trader with a Reddit account and a dream. They are thrilling, profitable (if you’re on the right side), and, let’s face it, a bit addictive. In all seriousness, it’s financial anarchy with a side of schadenfreude, as retail traders get to stick it to the big hedge funds. 

(Source: Reddit) 

Yet, even though Roaring Kitty isn’t at the head of this potential opportunity on $XRT (yet), it’s no secret he has popularized the concept, turning short squeezes into a staple of modern trading that most get rich quicker’s are diligently searching for. 

So while you decide what to do with this looming information on this ETF…

Just remember, in the world of short squeezes, you’re either the cat or the mouse. Sure they are fun but they can rip your face off just as quick as they make you money. 

(Source: Giphy) 

Which is why regardless of our personal decisions on the matter, this story is definitely one to keep an eye on. Plus, it will be interesting to see what our friends over on Reddit will think of it when they find it. 

So in the meantime, whether you chew on this opportunity or you could give a rats a$$ about 428% short interest on the SPDR S&P Retail ETF, have a great and relaxing Saturday my friends! 

Stocks.News doesn't hold any positions in companies mentioned.