Nokia was one of the "attacked" stocks yesterday. Going into the long logic people on forums pumped yesterday for Nokia is not even worth mentioning.

For now squeezing a few hedge funds has worked, but these moves are basically just a play on a broken market and many retail guys will be left with huge losses when this passes.

So for the Nokia trade now. It started going up in Europe yesterday, yes Nokia is a Finnish company, not American. The main market is Europe, not US, although there is a listed ADR on NYSE. After Europe closed, people started "chasing" Nokia in the US leg (red arrow where Europe closed in the chart). Nokia extended the move by some 75% after Europe closed, all happening in a few minutes.

So people start chasing a stock in the secondary market, Europe is the primary market for Nokia trading. Obviously there are shareholders in the US leg as well, many US based funds can only hold the ADR for example. So retail punters start chasing the relatively illiquid Nokia ADR and manage to lift it to the moon in a short time span. Obviously HFT firms trade the ADR as pure momentum trading strategies, but it does take some time before real "flow", sellers, wake up to this move. European fund managers do not look at the US ADR overly actively as their day has ended. It would take 10,15,20 minutes before they get the call from their local broker telling them Nokia is up 20, 30, 40% from the European close (markets are not efficient). Unless there are news out, beyond Redditt, some PMs start selling the share, converting them via the custodian bank later into European shares (or via prop trading firms that can facilitate the conversion, although this business, ADR "arbitrage" has faded for years).

Obviously there are some scared shorts, especially in these times, that probably started chasing the stock as well as it spiked in US trading only. You can basically call this an inverse flash crash move, triggered by retail, but is an affect of a broken market.

So what has happened?

Nokia in Europe is basically unchanged as of writing. It needs to go up by 22% from here in order to catch up to where it closed in US. It needs to gain almost 85% from here in order to reach the highs of where the ADR printed highs yesterday.

Many US retail punters will have a rude awakening when they see how much they lost in Nokia, but on the other hand, who said you should be making money not understanding what you do.