Explainer: What is a gamma squeeze and how did it drive up AMC’s stock price?

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Explainer: What is a gamma squeeze and how did it drive up AMC’s stock price?
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Shares of AMC Entertainment Holdings Inc (AMC.N) surged to a record high this week in a blistering rally that again highlighted how an arcane options market dynamic known as a gamma squeeze can super-charge stock price gains.

Closed signs are seen on an AMC Theatre during the outbreak of the coronavirus disease , in New York City, U.S., April 29, 2020. REUTERS/Brendan McDermidsurged to a record high this week in a blistering rally that again highlighted how an arcane options market dynamic known as a gamma squeeze can super-charge stock price gains.was partly fueled by heavy trading of equity options.

These changes are captured through a range of mathematical calculations, one of which traders call a gamma.

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