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Shares of GameStop (GME) were up another 134.84% today, January 27, to close at $347.51. The stock traded at just $17.25 on January 4, 2021.

The heady gains in GameStop have led traders to look for other heavily shorted stocks that might go up BIG as short sellers are forced to buy shares in order to cover their bets that the stocks would fall.

So AMC (AMC), the country’s largest operator of (closed) movie theaters, gained 301.21% today to close at $19.90. The shares traded at $1.98 on January 5, 2021.

Traders also cast their eyes at American Airlines (AAL), which gained 6.63% today after a mention on Reddit’s Wall Street Bets forum tagged “AAL, the next GME.” Other stocks on the heavily-shorted list include FuboTV (FUBO), up 6.44% today, and Bed Bath & Beyond (BBBY), up 43.45% today.

And it looks like the big gains in these stocks that have come at the expense of short sellers (in what is a classic short squeeze) could be having a negative effect on stock prices outside these favorites. The theory is that the losses by short-sellers, who have had to buy shares at ever higher prices in order to close out their short positions, have spread to some of Wall Street’s big hedge funds. And that today these hedge funds (which trade long and short) were selling some of their long positions in technology and other momentum stocks in order to cover their losses. (In a short, a trader borrows shares today in the hope of returning the shares tomorrow after buying them shares at a lower price. One of the risks of a stock short, as opposed to buying Put Options, which are also a bet on stock prices declining, is that losses can be, theoretically, infinite. If you shorted AMC at $1.95, you’re sitting on a big loss today when the stock is at $19.90, but there’s no reason that AMC shares couldn’t climb to, say, $30, and in that case the short seller’s loss is even larger.)

Today’s losses were especially heavy in stocks that have been the favorite of long-side bets by hedge funds. Twilio (TWLO), for example dropped 4.89% at the close. Netflix (NFLX) was down 6.88%. Alphabet (GOOG) was lower by 4.51%. Teladoc (TDOC) lost 4.29%.

Are these losses the result of selling to cover losses in short position? That selling to raise cash to cover short positions might be enough to move a market that’s already worried about valuations in an economy that’s not rebounding as quickly as hoped because of problems in the vaccine roll out.

To take the numbers on just one hedge fund tracked by Bloomberg, losses at the $3.5 billion Maplelane Capital hedge fund, amount to about 33% this month through Tuesday, January 26. The fund was short GameStop–plus American Airlines. (Bloomberg reports that the fund has no margin issues and I certainly don’t want to start a run on this or any other hedge fund.)

It’s very difficult to call the top in a rally like the one in GameStop or any other short-squeeze rocket since the move up is only good as long as there are shorts who need to buy to close out positions. (And individual investors who still want to jump into these stocks even after these gains.) The rally can end on a dime. It could continue. I don’t have any idea. Which makes these trades too risky for me–even as I’m envious of the profits that traders in these stocks have reaped.