GameStop shares were volatile in pre-market trading on Monday as the Reddit-fueled frenetic trading continues.
Shares of the bricks-and-mortar video game retailer jumped as much as 18% to $384.89 in premarket trading. The shares were last down about 2% to $333. The stock surged 1,625% in January.
The astronomical rally has inflicted a mark-to-market loss of almost $20 billion to hedge funds with short positions against the stock, according to data from S3 Partners. However, many short-sellers are holding onto their bearish positions.
Robinhood and other trading apps continue to limit buying of GameStop stocks and options contracts, along with those of other heavily-shorted names, following a week of hugely volatile trading due to a retail trading frenzy led by 5 million-strong Reddit thread “WallStreetBets.”
Short selling is a strategy in which investors borrow shares of a stock at a certain price on expectations that the market value will fall below that level when it’s time to pay for the borrowed shares.
— CNBC’s Yun Li contributed to this report.