What started out as a few brokerage house thinking they could force Gamestop in bankruptcy for an easy killing are in for a rude awaking.
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This is bigger than a Robinhood group. The dollar amounts is beyond them.
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This will kill the brokerage houses that shorted them and the banks that back them.
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The brokerage houses and banks now have to sell/short into the buyers trying to save themselves. It is not working and just making their losses worse.
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Whoever is the backing this has a plan to destroy some big players and it's working.
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Once this is done, there will be another and another.
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Enjoy the show.
You got it totally reversed. They are short and need to buy to close positions, but everyone is buying so the price continues up.
My view to try to stop the rise you have to sell into it. Things like you and me is why this is such a vicious game.
That's assuming you are coming in from the outside. The entire point of this situation is WSB found that there is a hedge found which has a massive short, i.e. they borrowed a massive amount of shares and sold them. So if the price falls, they buy back cheaper, give back the shares and the difference in price they borrowed at and the price they bought back at is their profit. That's how shorting works.
However, since WSB caught on to that, they started buying call options. When you do that, Market Makers have to buy stock, to protect themselves against options they sold to you. When Market Makers buy the stock, that creates demand and price goes up. When price goes up, those who are short are losing money. To close positions, they have to buy back the shares and give them back to those they borrowed the shares from in the first place. So, as you can see, it is a vicious loop of buying, buying, buying. Which creates more demand, which drives the price up. That's called a short squeeze.