TWTR - Is Evofem Biosciences (EVFM) Stock the Next Big Squeeze?
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Evofem Biosciences (NASDAQ:EVFM) stock only recently became well-known on Wall Street. After the U.S. Supreme Court overturned Roe vs. Wade, the rush on contraceptives propelled the microcap biotech stock to new highs. But just over a week later, EVFM stock is making headlines for different reasons. Some experts predict it will be among the market’s next gamma squeezes.
What exactly is a gamma squeeze? According to short analysis platform Fintel, “a gamma squeeze is a specific event that happens when the price of a stock climbs suddenly due to actions in the options market.”
Fintel ranks EVFM stock at the top of its gamma squeeze leaderboard for this week. The company boasts a high gamma squeeze score of 99.50. Its net call open interest (OI) percentage of float is also 37.98%. That’s substantially higher than the second stock on the list, Revlon (NYSE:REV), at 23.75%. While Revlon and third-place stock Clovis Oncology (NASDAQ:CLVS) have advanced steadily in the rankings since last week, EVFM stock is new to the leaderboard.
Is EVFM Stock in for a Gamma Squeeze?
Since coming into the spotlight in late June, EVFM stock has been volatile but remained mostly in the green. Despite dipping in pre-market trading this morning, shares also started surging after the markets opened today. As of this writing, EVFM is up more than 6%.
EVFM stock also has another catalyst that could help it rise. Yesterday, popular Twitter (NYSE:TWTR) influencer Will Meade shared a screenshot of Fintel’s gamma squeeze rankings. Since then, the stock has been trending on the platform as many investors call for bullish plays.
Smartasset explains that gamma squeezes are most likely “when there’s widespread buying activity of short-dated call options for a particular stock.” That description definitely fits with what Wall Street is currently seeing from investors. As is the case in a gamma squeeze, EVFM stock is shooting upward as call buying generates higher share prices. If that’s what’s going on, investors can expect shares to continue heading higher.
Of course, this leads to the question of how long the climb can continue. As is the case with all squeezes, no one can say for sure. What we do know is that EVFM stock has the potential to keep rising. Contrarian investors like the company and they take comfort in the fact that contraceptives are in focus right now. It’s an ideal gamma squeeze candidate — Fintel’s numbers prove as much.
On Penny Stocks and Low-Volume Stocks:?With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that?InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More:?Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
More From InvestorPlace
- $200 Oil Sooner Than You Think – Buy This Now
- The Best $1 Investment You Can Make Today
- Early Bitcoin Millionaire Reveals His Next Big Crypto Trade “On Air”
- It doesn’t matter if you have $500 in savings or $5 million. Do this now.
The post Is Evofem Biosciences (EVFM) Stock the Next Big Squeeze? appeared first on InvestorPlace.