![]() ![]() Specifically, the terms of the iShares Silver Trust allow authorized participants to issue or redeem large blocks of shares, known as baskets. However, in one respect, it shares an important attribute that ETFs have: the ability to create and redeem shares at will. Technically, the silver investment vehicle isn't an exchange-traded fund, as it doesn't comply with some of the securities laws that govern ETFs. The reason a squeeze on iShares Silver Trust won't work is that its structure is fundamentally different from a regular stock. That effect snowballed into the massive move in GameStop stock investors saw last week. That in turn led more short-sellers to want or need to cover their positions, making available shares even scarcer. The result of these moves was a dwindling number of sellers, which sent the share price higher. Some also bought call options on GameStop, which in turn prompted the institutions that make markets in options to buy GameStop shares in order to hedge their exposure. ![]() They bought shares of GameStop stock, sometimes holding them in accounts in which the stock was then unavailable for short-sellers to borrow. With GameStop, those who wanted to squeeze short-sellers did two things. But for the most part, supply of shares stays relatively constant. Companies can issue additional shares by getting approval from its board of directors to do a secondary stock offering, as we saw fellow squeeze stock AMC Entertainment Holdings ( AMC -0.19%) do. With any regular company, there's typically a fixed number of shares outstanding at any given time. To understand why a typical short squeeze wouldn't work on iShares Silver Trust, it's useful to understand exactly what happened with GameStop.
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