• Retail traders pointed out that a short squeeze in Opendoor's stock might be underway and investors could also be buying in due to the company's warrant issue next week.
• OPEN stock declined in premarket on Thursday, after four straight sessions of gains.
• Stocktwits sentiment for OPEN has remained in the 'extremely bullish' zone all week.

Opendoor Technologies, Inc. shares fell 3% in early premarket trading on Thursday, poised to pare some of the gains from their four-day rally. OPEN was among the top five trending tickers at the time.

The retail sentiment jumped a few points higher in the 'extremely bullish' zone over the previous day, holding firmly in the territory since the company's quarterly report on Nov. 7.

The string of optimistic commentary from bullish Opendoor backers, such as hedge fund manager Eric Jackson and noted investor Anthony Pompliano, and the purchase of company shares by insiders over the past week, are among the factors driving the sentiment.

Several Stocktwits members also pointed out that a“short squeeze” might be underway; nearly 22% of the company's shares were shorted, near a record high, according to Koyfin. 

A short squeeze happens when a heavily shorted stock's price jumps suddenly, forcing short sellers to buy shares to cover their bets, which pushes the price even higher. 

Some users also pointed out that investors were buying and holding Opendoor shares to qualify for the company's special warrant issue on November 18. Last week, the company said that shareholders of lots of 30 Opendoor shares would receive one warrant per lot. The warrants are split into three series - K, A, and Z - with each offering a different exercise price, namely, $9 (Series K), $13 (Series A), and $17 (Series Z). 

“We are at the perfect scenario for Short + Gamma squeeze,” said one user.

“$OPEN everyone is buying and holding OPEN to get warrants by Nov 18. 4 trading days from now, nobody want to miss the rocket ticket to the moon. Shorts are sweating to cover. Gov shutdown event to be signed by Trump today.”

So far this year, OPEN shares have gained by over 485%.

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