Hey trader,
The Pattern Day Trading rule that kept smaller accounts out of active day trading is gone as of today.
You can already see the result in the tape.
It would be easy to file that under regulatory housekeeping and scroll past it. The follow-through is sitting in the option chain instead.
As traders buy calls, dealers get shorter, and a name like Robinhood starts to squeeze on its own.
I watched it build on the Console this morning, and I want to walk you through it.
Stick with me and you will see what the rule change does to the way price moves now, why Hood is the live example, and a defined-risk way to play the squeeze.
The Rule That Just Changed The Tape
The government declared the pattern day trader rule dead today. Brokers get to wind it down on their own timing.
A number of firms are ending it today and tomorrow. Schwab flips on Monday the 8th. Robinhood already removed it.
That rule is what limited how often smaller accounts could trade in and out. Now those traders can enter and exit the same session.
The timing is the tell. These access rules come down right as the SpaceX IPO heads toward the market.
More flexibility reaches more traders. That matters for how price moves, not just for who gets to trade.
Why More Buying Forces A Squeeze
Here is the part that matters for price: When retail buys calls in size, dealers take the other side and sell them.
Selling calls leaves the dealer short gamma. To stay neutral as the stock rises, the dealer has to buy shares.
That buying pushes price higher, which forces more buying. The loop feeds on itself. That is the gamma squeeze.
The Console reads which side each print hits and gives the aggregate buy-versus-sell skew. That tells me whether the call buying is real before the candle confirms it.
What The Console Flagged On Hood
Hood ran about 3% today on heavy call buying. The activity stacked at the 85, 86, and 90 strikes.
I checked for institutional blocks first. There were none of size. This is a retail-fueled trade rather than a single big print.
The aggregate read carried the bias. About 29% of the volume hit the ask against 23% at the bid, which gives the edge to buyers.
Implied volatility confirmed it. Volatility ran higher today than yesterday, which is what happens when buyers pay up for calls.
This is the same setup the Console caught on May 27. The 80 and 90 calls flagged before Hood broke out over the next two days.
Where The Squeeze Runs From Here
Now my read takes over from the print log. I map that open interest into a gamma structure.
The 85 and 86 strikes form the floor, and price is sitting above them. Hold that floor and the dealer buying supports the tape.
The next magnet is 90. That strike carries the heavy call interest that pulls price toward it.
Break 90 and the air opens up. For June expiration there is almost no interest until 105, so the next real stop sits up there.
Understand this is a volatile name. Hood’s implied volatility runs five to six times the VIX, so these moves come fast in both directions.
The Trade
Treat this as a framework, since the structure depends on Hood holding its floor. Brandon flagged a defined-risk call vertical to play the squeeze.
- Setup: retail call buying at 85, 86, and 90, building intraday negative gamma
- Read: 85 and 86 as the floor, 90 as the magnet, clean air to 105 on a break of 90
- Structure: a $5-wide call vertical bought near the 40-delta strike, which sat around 95, roughly 43 days out
- Cost: about $1.25 per spread, verify on the chain at entry
- Alternative: an 85/90 in-and-out spread, roughly $1.70 to $2.13
- Risk: the debit paid per spread
- Trigger: Hood holding 86 with the call buying intact
- Invalidation: a break back below 85 that holds
What It Means Going Forward
The rule change is not a one-day story. More accounts can now trade in and out, which means more sessions like this one in Hood.
Retail flow buys calls, dealers go short gamma, and a name squeezes without any news behind it. Plan on seeing it more often now.
The edge is reading the buy bias and the gamma before the chart moves. The Console names the flow while the candle is still quiet.
Brandon Chapman, CMT
Creator of Ghost Prints
