Okay folks, so we need to talk about a specific stock that is skyrocketing and that, ladies and gentlemen, is Bbby. Today it capped off its 13th gain in 14 straight days, and in yesterday's lovely video, my thought process was you'd see that pre-market pump and then a dump and what happened after that would dictate where the momentum would head next. And you did get that pre-market pump and the post-market open dump. But it actually bounced a lot faster than I expected and it continued on to make a new cycle high.

And so, the question I want to address in this video is should you be Bed Bath and Fond of Bed Bath and Beyond And to do so, this video will be in four violent sections: Number One, the short thesis why short sellers are well shorting this, Number Two, what the squeeze setup is, and the one metric that is projecting that Bbby will do a similar squeeze to its early 2021 rallies, Number Three, We will talk about what the options chain says is going to happen, and number four, we're going to be talking about a crucial, crucial price point that you need to know that will dictate in my opinion how far this is actually going to pop. There is one specific level where shorts are going to be sweating like dogs and all of the items that we are covering should come together to help you formulate your own opinion and encourage you to do your own due diligence. And it is worth mentioning that while we have covered this ticker on the channel and in the daily zip Trader U morning briefings, well the truth is that the Charlie Effect the Charlie Curse doesn't really take hold on a stock until I make an official video on the setup. In other words, after I make this video, Bed Bath and Beyond may very well be Bed Bath and Bombed if you thought Hiroshima was bad weight, until you see Charlie Shima.

But what about the overall setup here and what can we learn from it? According to Ortek short interest as an estimated percentage of free float has been skyrocketing for much of the last three months. Percentage-wise it's hanging out at about 48.5 percent of free float, which means roughly half of the free float is sold short. Some estimates put this at higher numbers. Usually though, it averages out at about 50.

So what is the short thesis? Why are shorts so heavy in this? Well, the company recently fired their Ceo, their same store sales crashed 27 on the last report, and they are burning through an insane amount of cash. In fact, back in June, Bed Bath and Beyond reported a quarterly loss of 224 million dollars for its adjusted operating profits. Yet the company ended the quarter with just 107 million dollars in cash, which that's a pretty damn bad situation. And this comes in a period of time where companies like Target and pretty much every company in the niche is suffering from a massive shift in consumer discretionary spending.

And when I was a kid, I would go over to my Grandma's house and she would have this drawer specifically dedicated to stacking up and storing Bed Bath and Beyond 20 off coupons. Honestly, I think she might have been taking them from other people's mailboxes because she had a lot of those. She thought she was doing a good thing when she'd go and save money with these coupons. But now we know she may very well be responsible for the downfall of this company.

Now was my Grandma working for the short sellers? Well, we'll never know for sure, but I do have my suspicions Now, Ironically, as Triple B Y has gone up, you've started seeing a lot of negative articles trying to highlight how bad the situation is. Such as this post this morning of quote 12 photos showing the sad state of Bed Bath and Beyond And then you go through the photos and it's just kind of like standard store pictures with not anybody in them. And then there's other ones from fun saying that the company come back doesn't make sense. Stock headed to one dollar.

Of course. today it's trading at like 17. You know. an analyst for the firm said that channel checks indicated widespread out of stocks, heavily discounted private label merchandise, dirty stores, and disengaged employees.

That kind of sounds like any retail store the last couple of years, but what do I know, but always pay attention to timing. It's very, very funny when a stock goes up and all of a sudden all these institutional players are very, very concerned that it's going up. Sometimes it's just the media trying to get clicks, but every so often you see an actual fund, like for example, Loop Capital, who is just so concerned with what Bed Bath and Beyond is doing. Now in my opinion, a lot of times I'm not saying Loop does this.

I have no idea they're not forced to disclose anything, but in my opinion, a lot of times what you'll see is that short sellers they go and they short a stock, and then when it doesn't go their way, they'll all of a sudden start popping out. Really, really negative content everywhere about it. Oftentimes that serves as insurance to make sure that the stock goes back down and stays down. And while you may agree with their short thesis, it's still kind of frustrating that institutional players can do stuff like this.

During this rally, I think that a lot a lot of short sellers are hoping for massive dilution to save them, but many are arguing that Triple B Y won't dilute, despite the fact that fundamentals really suggest they should. This idea is based on their historical reluctance to issue new shares despite massive increases in share price. If I was them, I would issue a lootable dividend called Beyond and then say, well, this is going to take the company beyond and then everyone's going to be really, really happy And then they can dilute the hell out of them And then people will say, oh, you're fud if you say that's delusion, That's what I would do. I'm not trying to relate that to anything, but.

Anywho, in a fundamentally driven market, perhaps Triple B Y would be indeed, trading at two or three bucks a share or something like that. But this market is not driven by fundamentals, at least not over the short to medium term. No, it's driven by the battlefield of sellers and buyers and all of the different fun tactics that go into what moving the share price. Okay, so the squeeze setup.

Now Triple B Y is up 278 since lows at the end of July, and despite a pretty big bludgeon day on the ninth. Well, she has not given up her overall momentum over our redirectional Sma line a single time since she broke above it even on the 30-minute chart. She is now the number one, most mentioned stock on Reddit, the number one trending on stock Twits. In terms of watchers, she is the number one most watched on stock twits as well.

And even today, despite the fact that the overall meme trend was fairly negative for oogabooga, Amc, and Gme, well, Triple B Y was up. So in terms of momentum, she's certainly pointed in the right direction, right. And I would say the biggest argument for why the short squeeze situation in this is so relevant right now, and why it's perhaps more relevant than at any point since the original January meme revenge rallies is because well, borrow fees are at levels that we haven't seen since then, Which of course indicates that there is what a huge huge shortage in overall shares to short at the same time where demand is skyrocketing. which means that shorts are having a really, really hard time dumping even more shares onto the market and pressuring this down at the same time where they are being squeezed on the shorts that they do already have.

And of course with utilization you have a hundred percent you've got cost to borrow actually doubling week over week And most importantly, as is necessary in the best squeeze setups, you have short sellers that have just been completely caught off guard by an overall momentum wave that just does not provide much breathing room at all for shorts to brace themselves and adjust. Short sellers thought, hey, we have this in the bag, the overall market is taking. even stocks like Apple are doing bad. What kind of chance does something like a Triple B Y have Zero So they went and they threw the book at it and all of a sudden you had week after week after week of an uptrend and the faster it goes up and continues this wave.

the last time short sellers have to fight against it or garner enough liquidity to adequately close their positions or at least adjust them. The real test of whether or not overall momentum is still on is how quickly it can bounce back from sell-off days, and it is so far past that test with flying colors. If we get another massive sell-off day tomorrow, the day after sometime, the next week look to see exactly where where it bottoms. Does it bottom at a higher low like it just did today, or does it break previous loss that has a huge impact on where momentum is heading? Okay, so let's talk about what's going on with the options chain.

It's worth mentioning that Triple B Y has some of the most options, volume of all equities in the market up there, with stocks like Tesla, Apple, Amazon, and so forth, and accordingly, a lot of the battle is fought on the options chain. You look at the out of the money call options expiring August 19th, which is Friday, you have massive concentration at the 20 strike price at the 30 strike price, and even at the 45 dollar strike price, these contracts will expire worthless if Triple B Y doesn't hit those strike prices before expiration. Now, obviously, as you get farther out of the money, the contracts get a lot cheaper. So very quickly you get to that dynamic where people are just kind of buying as a sort of yolo play lottery ticket type of play.

If the stock moves crazily in their direction, they're going to make a lot of money, but probably they're just going to lose it, right? But think about specifically these 20 strike price calls. you have 17, 408, open interest. there. maybe many of these were yellow plays originally that rapidly moved in the direction of holders.

But think about what actually happens if they expire in the money come Friday, or at least look like they're going to have to expire in the money come Friday. Well, market makers want to stay neutral, right? So what do they do? They have to go and hedge. And how do they hedge? Well, oftentimes by actually buying shares of the underline which in this case is triple by and that is called what a gamma squeeze. As options makers sold a lot of call options for certain strike prices that were low probability and all of a sudden they become high probability.

What happens? Well, they have to go and figure out how to hedge better, and that often includes algorithmically buying up shares. Sometimes there's some more complex options strategies to hedge, but still, usually it's underlying shares. When these contracts at strike prices 14, 15, 16 all the way to 20 were written, the odds of them expiring in the money were very very very low. Now they are very very very high.

and if the stock keeps going up, those chances are going to go even higher, right? Which means all of a sudden you got to have some more hedging. So from that perspective, I do see a lot of opportunity if this continues remaining hot and continues retaining this overall pricing pressure. Okay, so what are the crucial price points now on the options chain? Obviously, anything that's above 15, 16, 17, or 18 and especially going into 20 is a crucial price level to break because then all of a sudden the odds of extra Delta hedging go up. But putting aside just this week, I would argue that the bigger number is 25 And I'll give you my reason if you want to judge when short sellers are most likely to make a rash decision to reverse a trade and start covering.

Well, it tends to be when they are most at risk for margin calls, or at least when they are most at risk of being deeply in the red and likely to start eating into the rest of their fund Right now. People are calling this run a squeeze, but the truth of the matter is that short interest isn't going down right now. Shorts right now are not buying back shares to cover. In fact, they're doing the complete opposite.

They are increasing their short position because that's happening. That indicates that the price of the stock has not reached anywhere near levels where shorting this would become incredibly likely to induce margin calls. If it was again, they wouldn't be doubling down on their short position. No, they would go.

and they'd be trying to either adjust their short positions or they'd be trying to increase their capital on the side if they can't adjust it to make sure that they actually have the maintenance requirements to prevent margin calls. And the reason that they aren't exactly desperate right now at least most of them are desperate is because if you look at the year chart, well, even with this current rally, the stock is still down 40 on the year. What does that mean? Well, it means that if you short at the stock at any point in the last year, odds are strong that you're not in terrible shape. The point in time where that actually changes is at minimum around 25, maybe 27 because that is when Triple B Y is green on the year, and anybody who shorted this at any point this year would be red.

Some of them would be very, very red and on the verge of a margin call, others would just be starting to be pushed over that ledge. And if they're looking at the stock and they're red and the momentum is just starting to really pick up and they don't see signs of stopping that, That is when they start really sweating. right now, they may be slightly alarmed, but they're not sweating yet. But if you actually get through twenty dollars and to twenty five or twenty seven dollars, that is when they start sweating.

And that is when you get the hero's journey to really squeeze them out. Do I think that's going to happen? Well, it depends on whether or not it can meet the crucial levels that it's trying to attempt right now. Heading into areas where a Gamma squeeze could help, it would be great heading into areas where it gets more attention and more speculator capital would be great, but it could also be very easily derailed on a moment's notice. So you want to pay very, very close attention to what is actually going on here.

The fundamental value is much lower, and once the speculator capital is gone and everyone's gone home, the short sellers may be right. But the question is, how much is this gonna go up before that happens and how many folks are gonna be squeezed out before that happens, that is a good question. Anyways, that caps off the video. Make sure to let us know what you think of the stock down below.

Make sure to get your up to 10 free stocks with Moomoo down below. And of course, if you want to get 50 off our ziptraderu lifetime access for the one time fee, make sure you hit that link down below and learn more about the program. Have a good one folks and I'll see you in the next video.