Gamma squeeze
Definition · Level 6 · Desk language
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A rally fueled by dealers who are net short calls buying stock to hedge — the higher it goes, the more they must buy.
Example
Retail piles into weekly OTM calls; dealers chase the stock up.
Where Tradecraft teaches it
Level 6 · Desk language, in the lesson “Market color and conduct”: Read the market’s mood in one phrase — and know the lines no trader crosses.
Related terms
- BreakoutA decisive move through resistance (or down through support) that holds, ideally on heavy volume — read as the start of a new trend leg.
- Buy the dipBuy a pullback in an established uptrend, betting the trend resumes — ideally once the decline shows signs of holding, not while it is still…
- CapitulationPanic, very high-volume selling as holders give up at any price — often near a bottom.
- Catch a falling knifeBuy into a steep, fast decline before there is any evidence it has stopped — and get hurt as the price keeps dropping.
- Chop / range-boundBack-and-forth trading between a floor and a ceiling with no trend: moves out of the band fail, trend-followers get whipsawed, and fading the edges…
- Dead-cat bounceA brief, weak rebound in a stock that then keeps falling.