What happened

Shares of the Hong Kong-based online broker Top Financial Group (TOP -3.48%) traded roughly 12% higher as of 10:28 a.m. ET for no obvious reason, but as volatility continued to influence what has become the latest meme stock phenomenon. Top Financial is still up more than 760% over the last five days.

So what

Top Financial is among the latest Hong Kong-based stocks with low floats to grab the attention of the meme-stock crowd and was mentioned on the popular subreddit WallStreetBets. The stock only has a public float of 2.56 million shares and also had more than 12% short interest, raising the potential of a short squeeze or for a short to cover.

However, despite being up today, the stock has fallen in recent days and some traders believe it may be starting to fade, according to the influential subreddit user Major-Access2321, who raised the idea about Top Financial on WallStreetBets and goes by the name Obi.

"I think we're going to see things cooling down soon," Obi told MarketWatch recently. "Great things in the market don't last forever."

Top was only seeing about 589,000 shares trading hands, as of this writing, when the average volume is about 5 million shares, according to Robinhood Markets. Obi said he initially invested in Top because he saw the potential for a short not to cover.

Now what

Clearly, Top's meteoric rise has very little to do with the actual company and more to do with the fact that it was being targeted by meme-stock traders. As I wrote recently, the stock is clearly way overvalued at current levels.

For this reason, I would avoid the stock. Meme stocks are incredibly risky and once the cat is out of the bag, it's going to be very difficult to make any money.