Apr. 14 at 5:53 AM
$AMC Gamma Squeeze Mechanism: When investors buy large volumes of call options, market makers (who sold the calls) often buy the underlying stock to remain neutral, creating upward price pressure.
Forced Covering: As the share price increases, short sellers’ potential losses become unlimited, often forcing them to close positions (buy shares) to mitigate losses, compounding the upward momentum.
The "Naked" Risk: If sellers of calls do not own the underlying stock ("naked short call"), a price surge requires them to buy shares at high prices to cover, generating extreme pressure.
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