33% Short Interest + Option Flow = Explosion?

RJ Hamster

21 hours ago

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Hey it’s Brandon.

The SPX hit a high of 6,021 today and everyone’s celebrating like we’re heading straight to the moon.

But here’s what caught my eye — the 3-month VIX is now 19.4% higher than spot VIX.

When that ratio pushes above 20%?

Institutional traders are telling you they expect serious volatility ahead. And guess what — high volatility doesn’t usually result in higher stock prices.

While everyone’s focused on this rally, I’m watching something completely different. Squeeze quakes.

Take BGS today. Up 8% at one point. Someone bought 2,300 call contracts when there was only 76 open interest previously.

Who’s taking the other side of that trade? The market maker. So now they’re short calls on a stock that’s ripping.

And get this– 33% of BGS float is shorted. That’s 5.5 days to cover at current volume.

You see where this goes, right?

Market makers are short calls.

They’ve got to buy stock to hedge. Stock price rises. Shorts start panicking. More buying pressure. This is what I call a squeeze quake — option activity that leads to a gamma squeeze that turns into a short squeeze.

In today’s video, you’ll see exactly how this works:

• The specific VIX ratio level that signals when institutional money expects volatility (and why we’re almost there)

• How to spot the option flow pattern that drove QBTS from $7 to $20 — and the two stocks showing identical signals right now

• Why 10,000 TELADOC call contracts just traded on $8 strikes that were basically worthless this morning

Is BGS a good company? No. Does TELADOC make money? Don’t care. Are these fundamentally driven moves? Absolutely not.

This is pure mechanics.

When you understand how gamma squeezes trigger short covering, you stop worrying about earnings reports and start following the money flow that actually moves stocks.

Just today I closed out a 222% winner on PLUG using this exact playbook. The option activity was there, shorts got squeezed, we collected.

Watch the full squeeze quake breakdown here — including my exact positions on all three setups

The setup is there. The shorts are trapped. Someone just needs to light the match.

Brandon

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