No, the crude market was behaving normally and then retail investors started engaging in trades they didn't understand. With this, institutional investors latched on to the thesis that GameStop was going bankrupt and started rampantly shorting it, further depressing the price. As the price dropped, the shorting accelerated to the point where hedge funds and other institutional investors were engaging in naked shorting. Essentially, they borrowed shares not to sell them, but to lend them to someone else to sell and collect lending fees as well as the profit for when they returned the shares to the original owner.
Obligatory disclaimer that I am not a financial adviser and this is not financial advise. I lost my job in March due to Rona and had time to kill, so I was hunting for trades to make while killing time at home. I used to work at GameStop in undergrad, so I pulled up the stock on TDA just to see what it was up to. This was in April. I noticed that the short float was around 90% and the institutional ownership was at 102%. I thought there's no way that could be right, but other places were showing the same data. So I started researching what a "normal" short float is and what the consequences of a high float could be. That led me to the 2008 VW parabolic squeeze and the 2019 Tesla slow burn squeeze.
I bought some OTM calls for May that expired worthless and realized that this is a powder keg without a lit fuse. I then bought shares and a call for January 15 21 at a 10 strike, which was 100% OTM (I exercised the hell out of that call, BTW). Looking at the 20 year chart, I saw that GME experienced huge price movements during console launches. That was the spark that was needed to light the fuse, IMO. What I didn't foresee was Ryan Cohen, the Chewy wonderboy, stepping in and starting the show early. The price shot up to almost 10 in September and that is when I posted my original post in the Markets thread. As it turns out, other people saw the same thing I did and started posting positions from farther back than mine on WallStreetBets explaining essentially the same thesis. The holiday season combined with the new console release started causing mini squeezes of retail shorts, which then caused little gamma squeezes, and the theory started gaining traction.
It's possible that the main squeeze has not even started. In December, the short float was 140%(!!!) and institutional interest was 122%(!!!). Literally more shares shorted than actually exist. Literally the entire float, plus 22% more, sitting with institutional investors who are limited in how quickly and how much they can trade, effectively locking down large chunks of those shares. It is possible that every retail share bought since the institutional ownership went over 100%, possibly 18 months worth or more, is actually a "synthetic" share that was created by a short seller lending already borrowed shares to someone else who sold it to retail investors or Ryan Cohen, who is here to stay and bought a 13% stake in the company over 3 months. In the event of a full squeeze, there would be infinite demand of shares with finite supply. As the price went up, the situation started accelerating until the first 40% pop. Now there was so much attention that literally EVERY call for 01/22/2021 was ITM at expiry. Think about that for a second. Literally EVERY strike for that day was ITM. I am still dumbfounded by that. According to my ThinkOrSwim app, there were still 117,094 open interest calls at the end of the day. That means those calls are possibly being exercised on Monday or Tuesday. If all of them are exercised, that's 11,709,400 shares that HAVE to be bought by the writers of the calls to close out. The range of losses on that is anywhere from $5 per share up to $59.50 per share, as well as being 20% of the entire actual GME float, not the short float. Those are monumental losses that will possibly skyrocket as the remaining covering occurs on Monday. And data from Ortex indicates that the short interest went UP (!!!) 3 or 4% on Friday.
I think we are seeing something historic with this stock. I think some funds got out over their skis, engaged in unethical and possibly illegal short selling, and thought they could short GME to zero and bankruptcy, meaning that they could pocket everything and give nothing back. They didn't think GameStop would make it to the holiday season and the new console cycle. But think about how much they hurt GameStop in the process. Market share less than $1 billion, lowered credit ratings, and less borrowing power due to depressed share price by manipulation through that naked shorting. How many layoffs because of that? How many management level people with families got let go? How about the remaining retail shareholders who lost literally billions in value up until now? Now WSB and others are excited to give the funds a taste of their own medicine and turn them upside down and shake their pockets out.