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Reddit’s Power to Push Stocks Down Is the Next Worry for Traders

  • The fear is that weaponizing put options may send stocks lower
  • Quirks in dealer hedging can reinforce price moves up and down
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Reddit-Inspired Army Takes Aim at Silver

The dust may be settling on the Reddit madness, but the sudden rise of this disruptive cohort is causing some stock-options traders to ask: What if the retail army decide to do it all again, by forcing prices down instead of up?

It’s a tail risk few institutional pros had considered until last week’s market drama when day traders pounded hedge funds by bidding up their most-shorted stocks.