Wall Street Veteran Charles Gradante Offers Rare Explanation of Option-Driven Stock Moves
CorpGov’s & PBHFA’s Forum video with Hedge Fund veteran & PBHFA member Charles Gradante went viral with over 160,000 views in the last week. Explaining the outsized moves in meme stocks, Gradante revealed Wall Street secrets during the panel talk.
Charles Gradante, Co-Founder, Hennessee Group LLC, who currently runs a family office, joined the 2021 Palm Beach CorpGov Forum, where he discussed regulation of “meme” stocks and retail traders along with heavy options trading. He also addressed the prevalence of “naked short” positions taken by major market makers – actions that he believes should result in more severe punishment. Additionally, he voiced support for retail investors who forced a short squeeze earlier this year and nearly toppled Gabe Plotkin’s Melvin Capital Management LP.
Mr. Gradante zeroed in on a phenomenon that has been neglected by mainstream financial media: the power of heavy call option buying to drive outsized moves in underlying stocks. In an ideal world, a market maker can match call buyers and sellers perfectly. But when call demand outstrips supply, market makers tend to sell calls themselves and also purchase underlying stock as a hedge, potentially triggering large price swings. While regulators are aware of the practice, they appear unsure how to manage it, he said…….. Read the rest here