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The real-life Wolf of Wall Street has warned GameStop investors to 'be careful'.
Jordan Belfort praised those who have managed to make some money out of the 'short squeeze', but said they shouldn't get ahead of themselves.
Speaking to Sky News, the 58-year-old said it was nice to see the little guy win for a change.
He said: "It's shocking, really amazing, and gratifying to see a little bit of the pain going on the side of the hedge funds.
"The hedge funds have been beating up little investors since the beginning of time pretty much."
However, he warned that the craze is destined to fade at some point and investors should be ready for it because Wall Street is working hard to fix whatever has gone wrong for them.
"While this will be short-lived... everyone's got to be really careful because it's going to be like catching a falling knife when it unravels," he said.
"The danger is that Wall Street and hedge funds especially are experts at identifying what we call 'inefficiencies in the market'.
"This is an inefficiency in the market right now and they will look to close that inefficiency very quickly."
And Belfort said that when people have made their money back, they should pull some of it back so they don't end up losing out.
He added: "It's a wonderful opportunity for people to make money - everyone's bored and locked up - but just be careful and make sure whatever you invest in these type of hot stocks, make sure you invest only what you can afford to lose.
"If you happen to make money, pull the original investment out and play with the house's money. That's my advice to everybody."
The story began when members of a Reddit community, r/WallStreetBets, noticed that hedge funds in the US were 'shorting' companies like GameStop, essentially betting against them.
Users then began buying up shares in these companies, which forced the price up and for these hedge funds on Wall Street to lose billions and billions of dollars.
Shares in GameStop rose again on Friday (29 January), increasing by 68 percent.
And according to reports, over the last six months or so, the share price for GameStop has risen by around 8,000 percent.
Due to the frenzy surrounding it, UK authorities warned investors to make sure they were fully aware of the laws surrounding 'market manipulation' and the risks of investing in such a volatile market.
A spokesperson for the UK's Financial Conduct Authority said: "The FCA is aware of the situation and continues to closely monitor trading in UK markets. UK investors should take care when trading shares in highly volatile market conditions that they fully understand the risks they are taking. This applies to UK investors trading both US and UK stocks.
"Firms and individuals should also ensure they are familiar with, and abiding by, all regulations including the market abuse and short selling regimes in the jurisdiction they are trading in."
Featured Image Credit: PA
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