Memstock mania is back. Some heavily shorted stocks connected to well-known consumer brands or heavily debated themes have been surging. Why? And what does that tell us about this equity market as a whole? I'm Alison Nathan and this is Goldman Sachs Exchanges. Today I'm joined by John Marshall,

head of derivatives research in Goldman Sachs research. John, welcome back to exchanges. Thanks for having me.

So John, we are suddenly seeing some very big moves in some unexpected stocks. So give us the update. What is going on?

Yes, we're seeing broadly volumes pick up, particularly in the options market. And we can trace

that back to small traders or retail traders that are increasing activity. This has been

happening over the last few weeks, but has really only come to light

in the past few days, really, with the big up moves in select stocks. And so when we talk about

these stocks that are moving sharply, they're often called meme stocks. But give us a definition

of what that actually means. How do you define a meme stock?

Well, meme stock, I think of literally as stocks that the Internet is focused on and therefore retail traders become focused on.

Now, surfing the Internet and trying to nail down which the stocks those are, even by quantitative measures, usually fails. What we've found works is really monitoring volumes, small trades in specific stocks, tracking that in shares

and in options, and that can enable people to get ahead of these trends.

Okay, interesting. So you are bringing back a lot of memories of 2021 when we had, I think,

in my recollection, like really the first meme craze. So ultimately, when you think about

how does this compare to that period, which was during the pandemic. So that felt like a strange

time. Yeah. When we measure it quantitatively based on volumes, it looks like this is about half as big.

And frankly, this type of wave happens about every six months. We saw one back in January. We saw one in

July of last year. And so these waves come and go. And I think one of the things that's interesting about them is it starts out as a retail wave

and then shortcovering among institutional investors tends to drive it even higher.

Right.

So that drives the volatility and some of these really big moves we're seeing.

But I guess my question is, yes, you say we see them every six

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