When the Nasdaq 100 spiked to an all-time high in last August it was largely driven by the strength in the seven FATMAAN stocks. The action was fairly narrow but since the FATMAAN names comprise most of the weight of the major indices, it was not readily apparent what was going on under the surface.
Eventually, it came to light that Softbank Group (SFTBF) had helped to create something called a "gamma squeeze." It turned out that Softbank was the "whale" that was buying call options on FATMAAN names at a frantic pace. Call buying was about 15 times higher than put buying.
When brokers sell call options they will typically buy the underlying stock so that they have net exposure. The brokers simply are looking to earn a commission and do not want to hold a trade either long or short.
The more options that a whale such as Softbank buys then the more shares the brokers that sold the options will buy to ensure that they are net flat. This creates a positive feedback look and is what helped to drive the Nasdaq 100 and the FATMAAN stocks to highs that eventually peaked on Sept. 2.
While this sort of squeeze can continue longer than seems reasonable when it does unwind there can be a very quick drop like what happened on Sept. 2, 4, and 5.
Be aware of what is going on here. This is not just simple retail demand for FATMAAN stocks and it could carry the indices even higher.