At this point, many investors have heard of the Reddit channel Wallstreetbets (WSB). But if you haven’t, here’s what you missed:
• WallStreetBets is a subreddit channel, a subreddit channel is an online group, or community, on the social media website Reddit.
• Most likely, if you have heard of WallStreetBets it is because of the recent news headlines featuring the online channel and GameStop (NYSE:GME)
• A WSB author/member decided to disrupt the status quo (a high short interest, described below, in GME) by writing a post outlining a strong case for buying the stock. Investors followed the recommendation and the stocks price soared from $19.79 to a high of $458 in just over a week.
Investors who bought in early had an amazing opportunity to profit, as long as they didn’t wait until now to sell.
Want to Get in on the Next WallStreetBets Short Squeeze?
First, it is important to understand the criteria WallStreetBets members look when searching for the next “YOLO” (You Only Live Once) stock.
Really it comes down to two main aspects.
Number one, they look for high short interest – meaning lots of other investors are betting against the stock and have borrowed shares to do so.
This is because WSB members know that with high short interest eventually comes high short covering.
Short covering is when a short seller has the buy back the stock they borrowed to close out their position.
This forced buying is a desired situation for investors looking to make money from a short squeeze because if the price of a stock with significant short interest starts to rise in price, short sellers will have to buy it to cover their short position.
This can create a sharp spike in the stock price.
Next, WallStreetBets members look for available call options, preferably deep out of the money call options, because they love the leverage.
Here’s how it works.
While an investor only needs to buy $100 of call options, the market maker (typically, a big institution) who sold the options needs to buy significantly more than $100 of the stock to hedge themselves.
This buying by the market maker drives up the price of the stock which is favorable for the investor holding call options.
The more options WSB buys, the more demand is created by market makers buying stock, the more the stock goes up in price … rinse, repeat.
And if this is a stock with lower liquidity, the price increase can be dramatic (case in point – GameStop).
Let’s Apply this Criteria to Find the Next WSB Target
Our process of screening for the next WSB target includes (as described above) screening for companies with high short interest as a percentage of free float and out-of-the-money call options.
Start by searching for North American stocks where more than 23% of the current free float has been shorted.
Next and just as important we want a stock that hasn’t already run, or gone up dramatically in price.
A recent price spike may signal the Wallstreetbets crew has already found the stock.
We want to find stocks with the potential for a short squeeze but where the actual stock price hasn’t moved much yet.
If you see a big run and fall off in the stock price chart within the last month or two, move on to another name.
And lastly, the stock needs to have available call options.
Look at the open interest (# of options already outstanding).
A large and growing open interest coupled with a stock price that isn’t up that much is the ideal situation we are looking for.
Next, search for call options of those stocks; focusing on far out-of-the-money call options with a low probability of being exercised.
We also are only looking for options that expire soon.
Soon to expire options give Wallstreetbets members the most leverage for the least amount of money and they love them.
Put It All Together and What Do You Get?
Top 25 companies with Highest Short Interest
| Ticker | Name | Short Interest % | 1 Month Return |
| GOGO | GOGO INC | 44% | 40% |
| GME | GAMESTOP CORP-CLASS A | 43% | 48% |
| SKT | TANGER FACTORY OUTLET CENTER | 41% | 13% |
| DDS | DILLARDS INC-CL A | 40% | 24% |
| LGND | LIGAND PHARMACEUTICALS | 39% | 40% |
| ESPR | ESPERION THERAPEUTICS INC | 37% | 17% |
| SUMO | SUMO LOGIC INC | 36% | 29% |
| CLVS | CLOVIS ONCOLOGY INC | 36% | 42% |
| FIZZ | NATIONAL BEVERAGE CORP | 35% | 24% |
| ROOT | ROOT INC/OH -CLASS A | 34% | 2% |
| ASO | ACADEMY SPORTS & OUTDOORS IN | 34% | 15% |
| AXDX | ACCELERATE DIAGNOSTICS INC | 33% | 47% |
| AMCX | AMC NETWORKS INC-A | 32% | 18% |
| IEA | INFRASTRUCTURE AND ENERGY AL | 32% | -12% |
| SPWR | SUNPOWER CORP | 32% | 56% |
| ZYXI | ZYNEX INC | 31% | 18% |
| RKT | ROCKET COS INC-CLASS A | 31% | 6% |
| TR | TOOTSIE ROLL INDS | 31% | 3% |
| GTT | GTT COMMUNICATIONS INC | 30% | 19% |
| TRIT | TRITERRAS INC-CLASS A | 30% | -3% |
| FLGT | FULGENT GENETICS INC | 30% | 128% |
| DISCA | DISCOVERY INC – A | 29% | 30% |
| VXRT | VAXART INC | 29% | 18% |
| PGEN | PRECIGEN INC | 29% | 4% |
| OTRK | ONTRAK INC | 29% | 26% |
Top 25 Options with Largest Open Interest (most available options)
| Ticker | Expiration | Strike Price | Days to Expiration | Open Interest |
| TRIT | 02/19/21 | $15 | 4 | 15,288 |
| TRIT | 02/19/21 | $13 | 4 | 12,988 |
| GME | 02/19/21 | $800 | 4 | 10,666 |
| TLRY | 02/19/21 | $65 | 4 | 8,967 |
| MAC | 02/19/21 | $25 | 4 | 8,602 |
| MAC | 02/19/21 | $30 | 4 | 7,676 |
| TLRY | 02/19/21 | $50 | 4 | 6,781 |
| REV | 02/19/21 | $25 | 4 | 6,373 |
| GME | 02/19/21 | $100 | 4 | 5,664 |
| WKHS | 02/19/21 | $60 | 4 | 5,273 |
| PGEN | 02/19/21 | $13 | 4 | 4,758 |
| GOGO | 02/19/21 | $25 | 4 | 4,719 |
| GME | 02/19/21 | $200 | 4 | 4,474 |
| SKT | 02/19/21 | $25 | 4 | 4,348 |
| TLRY | 02/19/21 | $60 | 4 | 4,334 |
| GOGO | 02/19/21 | $30 | 4 | 4,242 |
| GME | 02/19/21 | $115 | 4 | 4,062 |
| LCI | 02/19/21 | $11 | 4 | 3,963 |
| VXRT | 02/19/21 | $15 | 4 | 3,738 |
| MAC | 02/19/21 | $20 | 4 | 3,687 |
| GME | 02/19/21 | $320 | 4 | 3,626 |
| BBBY | 02/19/21 | $45 | 4 | 3,339 |
| GME | 02/19/21 | $80 | 4 | 3,215 |
| BBBY | 02/19/21 | $60 | 4 | 3,050 |
| GME | 02/19/21 | $300 | 4 | 2,975 |
As you can see, the only two companies which appear on both lists are GameStop Corp. and Gogo Inc.
The Gamestop story has already played out, while Gogo Inc. is still running and could have some more to go if Wallstreetbets really gets behind it.
However, the ideal target would have a low not high 1-month return.
So, on a best 2 out of 3 basis, other potential targets could include Root, Tanger, Triterras, Macerich, Precigen, Revlon or Bed Bath & Beyond.
We will continue to keep a close eye on WSB so check back to our daily live show to see who the next stock squeeze target could be.
The full Stock List (As of February 16th)
| Ticker | Name | Short Interest % | 1 Month Return |
| GOGO | GOGO INC | 44% | 40% |
| GME | GAMESTOP CORP-CLASS A | 43% | 48% |
| SKT | TANGER FACTORY OUTLET CENTER | 41% | 13% |
| DDS | DILLARDS INC-CL A | 40% | 24% |
| LGND | LIGAND PHARMACEUTICALS | 39% | 40% |
| ESPR | ESPERION THERAPEUTICS INC | 37% | 17% |
| SUMO | SUMO LOGIC INC | 36% | 29% |
| CLVS | CLOVIS ONCOLOGY INC | 36% | 42% |
| FIZZ | NATIONAL BEVERAGE CORP | 35% | 24% |
| ROOT | ROOT INC/OH -CLASS A | 34% | 2% |
| ASO | ACADEMY SPORTS & OUTDOORS IN | 34% | 15% |
| AXDX | ACCELERATE DIAGNOSTICS INC | 33% | 47% |
| AMCX | AMC NETWORKS INC-A | 32% | 18% |
| IEA | INFRASTRUCTURE AND ENERGY AL | 32% | -12% |
| SPWR | SUNPOWER CORP | 32% | 56% |
| ZYXI | ZYNEX INC | 31% | 18% |
| RKT | ROCKET COS INC-CLASS A | 31% | 6% |
| TR | TOOTSIE ROLL INDS | 31% | 3% |
| GTT | GTT COMMUNICATIONS INC | 30% | 19% |
| TRIT | TRITERRAS INC-CLASS A | 30% | -3% |
| FLGT | FULGENT GENETICS INC | 30% | 128% |
| DISCA | DISCOVERY INC – A | 29% | 30% |
| VXRT | VAXART INC | 29% | 18% |
| PGEN | PRECIGEN INC | 29% | 4% |
| OTRK | ONTRAK INC | 29% | 26% |
| SRG | SERITAGE GROWTH PROP- A REIT | 29% | 22% |
| IGMS | IGM BIOSCIENCES INC | 29% | 6% |
| BBBY | BED BATH & BEYOND INC | 28% | 10% |
| REV | REVLON INC-CLASS A | 27% | 6% |
| TLRY | TILRAY INC-CLASS 2 COMMON | 27% | 47% |
| OPK | OPKO HEALTH INC | 27% | 23% |
| PETS | PETMED EXPRESS INC | 27% | 8% |
| GDRX | GOODRX HOLDINGS INC-CLASS A | 27% | 30% |
| RGS | REGIS CORP | 26% | 23% |
| CLR | CONTINENTAL RESOURCES INC/OK | 26% | 19% |
| RVP | RETRACTABLE TECHNOLOGIES INC | 26% | 38% |
| TRHC | TABULA RASA HEALTHCARE INC | 26% | 3% |
| ODT | ODONATE THERAPEUTICS INC | 26% | 25% |
| MDGL | MADRIGAL PHARMACEUTICALS INC | 26% | 12% |
| BGS | B&G FOODS INC | 25% | 15% |
| MCS | MARCUS CORPORATION | 25% | 13% |
| ICPT | INTERCEPT PHARMACEUTICALS IN | 25% | 14% |
| BLNK | BLINK CHARGING CO | 25% | 9% |
| KALA | KALA PHARMACEUTICALS INC | 25% | 15% |
| DASH | DOORDASH INC – A | 25% | 8% |
| SRNE | SORRENTO THERAPEUTICS INC | 25% | 51% |
| MAC US | MACERICH CO/THE | 24% | -5% |
| APT US | ALPHA PRO TECH LTD | 24% | 44% |
| LCI US | LANNETT CO INC | 24% | -2% |
| LESL US | LESLIE’S INC | 24% | -5% |
| GEO US | GEO GROUP INC/THE | 24% | -1% |
| CVNA US | CARVANA CO | 24% | 3% |
| IRBT US | IROBOT CORP | 24% | 50% |
| WWR US | WESTWATER RESOURCES INC | 24% | 78% |
| WKHS US | WORKHORSE GROUP INC | 24% | 55% |
| PLCE US | CHILDREN’S PLACE INC/THE | 23% | 26% |
| CONN US | CONN’S INC | 23% | 7% |
| KNDI US | KANDI TECHNOLOGIES GROUP INC | 23% | 14% |
Full Options List Filtered by Highest Open Interest (As of February 16th)
| Ticker | Expiration | Strike Price | Days to Expiration | Open Interest |
| TRIT | 02/19/21 | $15 | 4 | 15,288 |
| TRIT | 02/19/21 | $13 | 4 | 12,988 |
| GME | 02/19/21 | $800 | 4 | 10,666 |
| TLRY | 02/19/21 | $65 | 4 | 8,967 |
| MAC | 02/19/21 | $25 | 4 | 8,602 |
| MAC | 02/19/21 | $30 | 4 | 7,676 |
| TLRY | 02/19/21 | $50 | 4 | 6,781 |
| REV | 02/19/21 | $25 | 4 | 6,373 |
| GME | 02/19/21 | $100 | 4 | 5,664 |
| WKHS | 02/19/21 | $60 | 4 | 5,273 |
| PGEN | 02/19/21 | $13 | 4 | 4,758 |
| GOGO | 02/19/21 | $25 | 4 | 4,719 |
| GME | 02/19/21 | $200 | 4 | 4,474 |
| SKT | 02/19/21 | $25 | 4 | 4,348 |
| TLRY | 02/19/21 | $60 | 4 | 4,334 |
| GOGO | 02/19/21 | $30 | 4 | 4,242 |
| GME | 02/19/21 | $115 | 4 | 4,062 |
| LCI | 02/19/21 | $11 | 4 | 3,963 |
| VXRT | 02/19/21 | $15 | 4 | 3,738 |
| MAC | 02/19/21 | $20 | 4 | 3,687 |
| GME | 02/19/21 | $320 | 4 | 3,626 |
| BBBY | 02/19/21 | $45 | 4 | 3,339 |
| GME | 02/19/21 | $80 | 4 | 3,215 |
| BBBY | 02/19/21 | $60 | 4 | 3,050 |
| GME | 02/19/21 | $300 | 4 | 2,975 |
| GME | 02/19/21 | $150 | 4 | 2,718 |
| TLRY | 02/19/21 | $100 | 4 | 2,686 |
| TLRY | 02/19/21 | $45 | 4 | 2,479 |
| PGEN | 02/19/21 | $15 | 4 | 2,400 |
| KNDI | 02/19/21 | $15 | 4 | 2,365 |
| KNDI | 02/19/21 | $16 | 4 | 2,311 |
| AMCX | 02/19/21 | $85 | 4 | 2,267 |
| WWR | 02/19/21 | $15 | 4 | 2,266 |
| GME | 02/19/21 | $500 | 4 | 2,222 |
| GME | 02/19/21 | $250 | 4 | 2,166 |
| TR | 02/19/21 | $50 | 4 | 2,161 |
| SRNE | 02/19/21 | $30 | 4 | 2,109 |
| GME | 02/19/21 | $120 | 4 | 2,082 |
| TRIT | 02/19/21 | $20 | 4 | 2,031 |
| WKHS | 02/19/21 | $56 | 4 | 2,006 |
| GME | 02/19/21 | $400 | 4 | 1,929 |
| BBBY | 02/19/21 | $50 | 4 | 1,876 |
| MAC | 02/19/21 | $21 | 4 | 1,821 |
| TRIT | 02/19/21 | $25 | 4 | 1,788 |
| OPK | 02/19/21 | $9 | 4 | 1,767 |
| GME | 02/19/21 | $110 | 4 | 1,740 |
| VXRT | 02/19/21 | $20 | 4 | 1,705 |
| TRIT | 02/19/21 | $18 | 4 | 1,705 |
| GME | 02/19/21 | $85 | 4 | 1,700 |
| TLRY | 02/26/21 | $65 | 11 | 1,689 |
| BBBY | 02/26/21 | $60 | 11 | 1,688 |
| GME | 02/26/21 | $800 | 11 | 1,686 |
| TLRY | 02/19/21 | $55 | 4 | 1,670 |
| BLNK | 02/19/21 | $85 | 4 | 1,613 |
| KNDI | 02/19/21 | $14 | 4 | 1,574 |
| BLNK | 02/19/21 | $90 | 4 | 1,542 |
| REV | 02/19/21 | $20 | 4 | 1,470 |
| RKT | 02/19/21 | $31 | 4 | 1,426 |
| BGS | 02/19/21 | $50 | 4 | 1,318 |
| BBBY | 02/19/21 | $55 | 4 | 1,279 |
| GME | 02/19/21 | $125 | 4 | 1,268 |
| FIZZ | 02/19/21 | $200 | 4 | 1,248 |
| GME | 02/19/21 | $90 | 4 | 1,176 |
| TLRY | 03/12/21 | $100 | 25 | 1,162 |
| GME | 03/05/21 | $800 | 18 | 1,137 |
| AXDX | 02/19/21 | $35 | 4 | 1,120 |
| CLVS | 02/19/21 | $12 | 4 | 1,111 |
| VXRT | 02/19/21 | $18 | 4 | 1,104 |
| GME | 03/12/21 | $800 | 25 | 1,077 |
| KALA | 02/19/21 | $15 | 4 | 1,071 |
| TLRY | 02/19/21 | $70 | 4 | 1,061 |
| BLNK | 02/19/21 | $80 | 4 | 983 |
| IEA | 02/19/21 | $30 | 4 | 976 |
| ROOT | 02/19/21 | $35 | 4 | 972 |
| TLRY | 02/26/21 | $60 | 11 | 962 |
| CLVS | 02/19/21 | $15 | 4 | 943 |
| GME | 02/19/21 | $140 | 4 | 926 |
| GME | 02/19/21 | $350 | 4 | 915 |
| LGND | 02/19/21 | $260 | 4 | 904 |
| CLVS | 02/26/21 | $12 | 11 | 902 |
| WKHS | 02/19/21 | $55 | 4 | 884 |
| GME | 02/19/21 | $105 | 4 | 862 |
| ZYXI | 02/19/21 | $30 | 4 | 844 |
| TLRY | 02/26/21 | $50 | 11 | 835 |
| TLRY | 02/19/21 | $80 | 4 | 826 |
| TLRY | 03/12/21 | $60 | 25 | 803 |
| GME | 02/19/21 | $700 | 4 | 746 |
| GME | 02/19/21 | $95 | 4 | 737 |
| BBBY | 02/19/21 | $44 | 4 | 735 |
| PETS | 02/19/21 | $60 | 4 | 727 |
| LCI | 02/19/21 | $10 | 4 | 725 |
| WKHS | 02/26/21 | $60 | 11 | 719 |
| GME | 02/19/21 | $420 | 4 | 719 |
| RVP | 02/19/21 | $30 | 4 | 715 |
| PGEN | 02/19/21 | $20 | 4 | 708 |
| TLRY | 02/19/21 | $47 | 4 | 707 |
| GME | 02/26/21 | $200 | 11 | 677 |
| TLRY | 03/05/21 | $65 | 18 | 676 |
| AMCX | 02/19/21 | $80 | 4 | 665 |
| SRNE | 03/05/21 | $23 | 18 | 657 |
| TLRY | 02/19/21 | $56 | 4 | 647 |
| TLRY | 02/19/21 | $46 | 4 | 642 |
| GME | 02/26/21 | $80 | 11 | 636 |
| GME | 02/19/21 | $570 | 4 | 625 |
| TLRY | 02/26/21 | $100 | 11 | 617 |
| AXDX | 02/19/21 | $30 | 4 | 615 |
| TLRY | 02/19/21 | $54 | 4 | 612 |
| LCI | 02/19/21 | $12 | 4 | 610 |
| VXRT | 03/05/21 | $20 | 18 | 609 |
| GME | 02/19/21 | $165 | 4 | 606 |
| VXRT | 02/26/21 | $15 | 11 | 584 |
| BBBY | 02/19/21 | $46 | 4 | 576 |
| TLRY | 02/19/21 | $48 | 4 | 574 |
| VXRT | 02/19/21 | $30 | 4 | 574 |
| SPWR | 02/19/21 | $75 | 4 | 573 |
| VXRT | 02/19/21 | $17 | 4 | 571 |
| LCI | 02/19/21 | $13 | 4 | 554 |
| VXRT | 02/19/21 | $25 | 4 | 549 |
| VXRT | 03/05/21 | $15 | 18 | 547 |
| AXDX | 02/19/21 | $25 | 4 | 546 |
| GME | 02/19/21 | $600 | 4 | 544 |
| IEA | 02/19/21 | $35 | 4 | 544 |
| GME | 03/05/21 | $350 | 18 | 534 |
| VXRT | 02/19/21 | $14 | 4 | 523 |
| GME | 03/05/21 | $95 | 18 | 522 |
| SPWR | 02/19/21 | $80 | 4 | 519 |
| WKHS | 03/12/21 | $60 | 25 | 512 |
| BBBY | 02/19/21 | $43 | 4 | 511 |
| SRNE | 02/19/21 | $25 | 4 | 508 |
| BBBY | 03/05/21 | $60 | 18 | 505 |
| GME | 02/19/21 | $180 | 4 | 500 |
The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Grizzle hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.