WallStreetBets Targets Silver for Squeeze, Price Soars 11%

After creating a volatile week for several stocks, the Reddit group r/WallStreetBets appears to be moving on from GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings, Inc. (NYSE: AMC) and is now targeting silver.

Monday morning, the spot price for silver surged more than 11% to more than $30 per ounce to hit its highest levels since 2013. Silver ETFs and mining stocks opened up higher across the board.

Meanwhile, GME stock is falling. It’s down more than 25% at writing.

Last week, the amateur traders on WallStreetBets managed to squeeze the hedge funds that were shorting several stocks. The most notable was GME, which soared nearly 2,000% in January.

One hedge fund, Melvin Capital, reported losing more than 50% of its assets in the ordeal.

So now the question is, “Could the same thing happen to silver?”

Analysts say it will be a lot harder since there aren’t as many institutions shorting silver.

According to a Reuters report, most hedge funds with a position in silver are long and therefore stand to benefit from the new buyers.

WallStreetBets users specifically targeted the ETF iShares Silver Trust (NYSE: SLV) in an attempt to squeeze some banks that hold short positions in silver. But according to a report from Bloomberg, Citadel, which backs Melvin Capital, is the 5th largest owner of the fund.

The GME short squeeze was portrayed as a battle between the retail investors and big hedge funds.

The new trend in silver is poised to benefit the hedge funds that were targeted last week.

The Reddit group has added millions of users in the past week. With the anonymity granted by the internet, it’s impossible to know exactly who is making the recommendations now.

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