Beyond Meat: The New Meme Stock — A Trader Case Study in the Importance of Flows
The incredible volatility in Beyond Meat’s share price has been widely discussed by traders, but in essence, what we’ve seen provides an excellent case study into market structure. A concentrated group of traders were able to legally take advantage of the system and a stock with high short interest, a liquid options market, a low market cap, and constraints that made it difficult to initiate new short positions. In essence, the moves we’ve witnessed have in no way reflected any kind of fundamental reality. Instead, what played out was a pure exercise in how order flow and poor liquidity led to breathtaking short-term moves in a market.
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