Exactly. At this point the hedges are just trying to escape the trap. "Covering" in this scenario just means throwing good money after bad. They're buying more put options to keep the stock price suppressed so they can escape their previous put options by the expiration date. But then they're locked into new short positions. It's a cycle that ties up their money. And if there's a market crash that consumes their cash buffer while Gamestop remains stable, they're screwed. You'll see hedges go out of business overnight like Leiman Brothers.
Thank you for that very comprehensive description. I was hoping they lose everything but kept hearing how it was a bet they could get out of
Exactly. At this point the hedges are just trying to escape the trap. "Covering" in this scenario just means throwing good money after bad. They're buying more put options to keep the stock price suppressed so they can escape their previous put options by the expiration date. But then they're locked into new short positions. It's a cycle that ties up their money. And if there's a market crash that consumes their cash buffer while Gamestop remains stable, they're screwed. You'll see hedges go out of business overnight like Leiman Brothers.
And of course team Trump knows this and is going to bleed them out of existence. Just a newly educated guess
I believe this is the case too.