The iShares Silver Trust SLV rallied more than 11% Monday morning on media reports that the WallStreetBets Reddit community responsible for pumping up the price of stocks like GameStop Corp. GME and AMC Entertainment Holdings Inc AMC in recent weeks has shifted its attention to triggering a squeeze in the silver market.
Yet the top posts on the WallStreetBets subreddit on Monday morning said that the silver trade has been orchestrated by the very hedge funds the community has been targeting.
Silver was trading about 7.5% higher to $29 at last check. The iShares Silver Trust SLV was up 8.04% at $27.
What Happened? On Monday morning, CNBC reported that the spike in silver prices “appears to be related to retail traders in the Reddit forum WallStreetBets.” On Sunday, the hashtag “#silversqueeze” was trending on Twitter.
Related Link: How And Why Did The Stock Market Crack This Week?
A pinned post on the WallStreetBets subreddit on Monday morning highlighted that the top owners of the SLV ETF are all large investment banks and market makers, such as Citadel.
Why It’s Important: Last week, Citadel LLC and Point72 Asset Management were forced to bail out hedge fund Melvin Capital with a $2.75-billion investment due to losses Melvin suffered in the GameStop gamma squeeze.
When Robinhood and other brokers restricted or banned buying of GameStop late last week, many retail traders accused Citadel of pulling the strings. Both Robinhood and Citadel have denied colluding to restrict buying in GameStop and other WallStreetBets stocks.
On Monday morning, WallStreetBets posters accused Citadel of pushing the silver short squeeze in an attempt to lure traders away from GameStop, which was down 4.6% in early trading.
“CITADEL IS THE 5TH LARGEST OWNER OF SLV, IT'S IMPERATIVE WE DO NOT ‘SQUEEZE’ IT. THESE ARE HEDGE FUNDS BOTS SPAMMING AWARDS,” the pinned post said.
Another top post warned traders that buying the SLV fund would be “directly putting money into the pockets of the EXACT HEDGE FUNDS ON THE OTHER SIDE OF $GME.
“If you haven’t been browsing WSB or doing your own research, you’d probably think that the people on Twitter are correct in saying there is a silver squeeze happening and we should all get in on it. There are quite a few wsb-logo Twitter accounts pushing this. This is BS & the straight up the ANTITHESIS of who we are,” the post read.
Instead of silver, the poster urged retail traders who want to continue to support the retail-driven short squeeze to focus on buying the so-called “$BANG GANG,” which is GameStop, AMC, BlackBerry Ltd BB and Nokia Oyj NOK.
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