March 2021 Newsletter

A word from Dr. Ionut Florescu

Dr. Ionut Florescu, Director of Hanlon Labs, shares updates for March 2021 with fellow students and colleagues.

Barron's Subscription

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George Calhoun's Forbes article onGameStop / GameStonk

Speaking on GameStop’s recent eruption this past February, Professor Calhoun counters the opinion that the investors involved in the stock were acting with wildly irrational motives. He proposes that the market itself is not exactly “rational”; that “share prices no longer reflect the underlying asset-value”. But Calhoun suggests that the GME event is actually the result of a process that is hyper-rational. Outlining the standard assumptions of the stock market, Calhoun goes on to describe the several situations where one or both of these assumptions are invalid. Using these examples, he explains how the GME event came to be, and how Reddit users designed a novel and extremely effective corner by combining two different techniques: a short squeeze, which is relatively well understood, and a new innovation called a Gamma Squeeze.