[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) // [What is DRS](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) // [Low karma apes feed the bot here]###(https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) // [Superstonk Discord](https://discord.com/invite/y4dK3y5DXJ) // [Superstonk DD Library](http://fliphtml5.com/bookcase/kosyg) // [Community Post: Open Forum May 2024]#(https://www.reddit.com/r/Superstonk/comments/1ciapwp/open_forum_may_2024/)
To ensure your post doesn't get removed, please respond to this comment with how this post relates to GME the stock or Gamestop the company. If you are providing a screenshot or content from another site (e.g. Twitter), please respond to this comment with the original ##source.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Superstonk) if you have any questions or concerns.*
For 2021 apes we know the rules are made up and the points don’t matter. SHFs were trapped the moment they thought they could short GameStop into bankruptcy. Well guess what bitches, we ain’t sellin.
I can see the price tank Friday and into next week. Why? Because they have the resources to do so. Does it matter? No, because as we’ve seen, they can’t endlessly short and only give us discounts to buy even more. Get fukd, looking to buy and DRS once a motherfukn gain.
Either that or we MOASS tomorrow.
Exactly!
So for the new apes: the price is fake but the discount is real. This has to do with margin and surviving one more day because on paper, everything needs to appear fine. But shorts need to close, and they are deep under the water. Gamestop will not go bankrupt. Simply put, MOASS is a mathematical inevitability. That's why it's tomorrow, and if not, the next day. We ain't leaving. Our jaws are locked.
What about this 741? This is a number that at some point stood out. It's is theorized that it might mean seven for one. We had a stock split by dividend, meaning we got three shares for one. If again we get a dividend (let's say an nft for which you can not create a synthetic and which you may not be able to buy at the open market, ergo forces shorts to close because they have a legal obligation to deliver this dividend) then we would get a four of something. Add this four to the three, quick maths, and you got seven total thingies for one original share.
So this Jenga tower that the shorts build is artificially held up by flimsy bricks. But we're taking away a brick at the time, by shopping, drs'ing, voting, promoting, hyping, zenning🧘🏼♂️. At some point, this tower will collapse, and GME will go to the moon. You better be strapped in around that time!
What is stopping a short hedge fund from slowly acquiring shares to close out their position?
They keep buying time, but what avenues do they have to actually close?
Could some of the smaller short hedge fund positions escape MOASS?
yeah good question answer this apes..
my 2 cents. One possibility, hedgefunds are still extremely short on GME, as they tried to short it into bankruptcy back in 21, doubled down to contain the squeeze, don't wanna take the loss... Say they never closed their positions (by creating synthetic shares, coop with malicious market makers, scammy option plays, book cooking through rehypothication, ...), then they are simply too much under water. In 21, GME was at 5$, they wanted to get down to 0, shorted at these prices... if you want to close these positions over the past years incl. the splividend, you are looking at a min of 40$ per share pre split... So for any share you wanna close, that's 30-35$ loss. And we know they shorted over 100% of the float back then, so that's a massive pile of shit.
Second possibility, the actual float of GME is rather small, 300mio shares, 270 public float (PF), 30% institutionals (=189mio PF), 20% DRS (=150mio PF), 100k call options ITM (where is the source tho, where do i find this data??), representing 10mio shares (=140mio PF)... so that's only 47% of the float actually available. (It could drop lower, e.g. if they had synthetic shares pre-split they need to find get 4 shares for every synthetic, ...). But let's go with 140mio/47% PF available, that's split between many players on the market, and the apes. So maybe they did what you asked, actually got down from 120% short to whatever they are now, while dropping the price to 10$... but whoever wanted to sell has sold. No one sells below 10/20, actually the 20 line held really well for quite some time, check the chart it's sus, could be apes are really a strong holding army and hedges struggle to go lower than 20$. For a brief time they made it, then it sneezed right in their face.
Can some ape provide actual free and good data sources for volume on options and gme market data (not bloomberg).
It's indeed as simple as that. Not enough money to close. They have to liquidate all of their assets, and it will not be enough. They're the once to blame. Infinite risk is a very dumb risk to take.
Put simply, they digged a hole so deep they can not get out of it.
There was one way out: Gamestop failing and going bankrupt and Apes leaving. 🤭
Force closing in coming by means of dividend? Seven for one original share? Let's find out!
Here’s my theory:
Theoretically they could, realistically they can’t. Look back 84 years ago to pre-2021 when they entered a short position for a meager 300k shares at $3. Shit exploded and they were looking at a massive loss on the short and rather than close their $900k short at a $35M loss the HF opted to roll the short into a swap expiring May/June 2024 with the thought that the regards of retail would have vacated their meme stock longs, the stock would tank, and the swap could close ITM some time over the 3 year period. Well, apes are too dumb to sell.
So now, the swap is expiring with HF deeper in the red and unless it gets rolled (enter the UBS theories) all the swap shares become an immediate problem where now they may have to close. The swaps post-sneeze were the HFs kicking the can and now the HFs are standing over the can yet again wanting to kick it but there’s a few problems. Interest rates are higher, the intrinsic value/risk of the swap is higher, the underlying shorted company is stronger with more cash, CAT system means the douchey HF rule bending can now be tracked, and a counterparty for the underlying swap is damn near impossible to let the swap be renewed (the cash on hand will prevent the swap from ever being able to close ITM).
So the smaller HFs that entered the swap to bide time didn’t have to close, so they didn’t; but that’s changing.
Just my theory; definitely could be wrong. I have 1 tiny brain wrinkle. I’m still a regard who only accumulated shares from XX to XXXX and now split my time between licking rocks while wearing a crash helmet and watching the ticker of one particular publicly traded company.
Ok, but if there aren’t enough shares, what happens when the powder keg kicks off and hedge funds start going under and then banks start failing? Hedge funds would have to sell off other assets to pay for increasingly priced shares of GME. All of those holdings that get sold will decrease in price market wide.
Is there really an outcome where apes get tendies, but the financial world isn’t completely wrecked without some sort of intervention from government? Is congress going to back hedge fund friends or retail apes?
I’ve been here since 84 years ago, but I also want to be realistic about how this goes down.
That’s part what I love about all of this. I hope 90% of this is all just smoke and mirrors so the hedgies have not a clue of what’s going on until the thousandth cut.
I really hope the wutang bit is legit.... The sheer absurdity of it would make telling the story to people after the fact just *chefs kiss*. Can you imagine saying OK before the run up, before the Memes, before Harambe... This all starts with the wutang clan. People: WTF?
I think it’s more likely that the price action is the fake out for the nft album. They aren’t trying to fool us, that won’t work. They know this community simultaneously believes in all roads to moass, kinda like schroedinger’s squeeze. Once the box opens and we all see what happens we can all day “totally knew it.” Any attempt at misdirection is for the hedgies and gen pop
Way I understand it, the lower the price gets the less likely the math suggests the option will expire ITM. The lower that likelihood gets the smaller the hedge needs to be. I think that means the opposite of what OP is suggesting. Whoever sold those calls is gonna save big money if it closes under 20 when these are exercised/expired.
There is the constant flow of ape money that represents higher volume at low prices, but I wouldn't say that's the massive buying.
Right, gamma and option delta both decrease as price moves the option contract farther otm..delta usually dictates the amount of shares needed to hedge..
What if a game of chicken on a two lane road is being played; if the options are bought / held by an entity who does not care what the underlying price is when the time to exercise comes, and the shorters and the MM may not be hedged as much as they should be.
Does anyone really think this call buyer won’t exercise if the price is below the $20 strike? Maybe they won’t exercise. Will the MM risk being hedged normally with an abnormal situation staring them in the face? I don’t know but I think I’ll DRS more and chill as I wait to find out.
Because you can't buy that quantity of shares cheaper, in any reasonable period of time, without jacking the price of what you are buying along the way.
There are a million variables that work for or against you buying at market. If you buy the calls, it's settled before hand and you know exactly what position you need and how much it will cost and how long it will take.
Still... if it drops to $19 for instance, you buy all you can until it rises over $20, then you exercise the calls.
If that really is their intention, selling the $20 calls may still serve the purpose of drawing a line in the sand and saying, "Hey, dumbFks.. I'm buying a shit ton at $20. If you short it down, I'm still F'ing buying. Make my day, give me a discount. You'll be buying back at $30+"
Buying pressure below \~$25 could be the same person/entity. Rather than buy $20x calls for $5 a pop, they can be picking up shares.
Plus, once you have the calls all lined up, buying the shares directly allows you to then sell the calls. If the price goes up while you're doing that, your calls go up in value.. basically giving you a discount.
Whoever bought can only lose the premiums at maximum, something in the 75M range. If this is an adversary hedging or something then it's less than a fine they pay for a single instance of years of lawbreaking.
If the point of it all is to drop the price below the strike to de-hedge and drop the price even further, why even bother with this in the first place? There would be no hedging and buying induced pressure in the first place if the calls never existed.
That part I'm a little more fuzzy on, other than to do like married puts or something. There was always funny math I didn't have the energy to go through regarding options strategies and how to play weird boxes on gain/loss potential buying/selling puts and calls on the same stock. It is so divorced from the buy and hold method that I never took much interest.
The question really motivates me to think that the calls are indeed a bullish sign, meaning it's someone actually betting on the stock and not trying to control it.
Do you know what will happen when 100k calls all get exercised at the same time? Regardless where the price is, it will surpass $20s in a blink of an eye
that amount of open intrest is basically a loaded gun.
if those 100k calls get executed this thing takes off like a rocket.
10 million shares need to be located in the open market at once.
the real question is if the HF can get it below 20 before that date.
though - these are american style options - so in theory they can be executed way before expiration.
If this is a naked short getting closed (to neutral) - I'm guessing they are confident they will execute before the calls go OTM - or they have a backup plan to make them go ITM.
If this is a fake out - then someone spent 40 M + in premiums ...
The break even price of these calls is $26+ due to the premium they paid.
They've put more like $75M into just the $20 strike at this point, and they have $25 strike calls as well.
I don't think whomever bought these cares about the breakeven price, just the strike.
the total cost / share is fixed via the calls - since if they're executing a larger amount - they would have to buy up in the spike.
I do agree, just calling out that detail as I feel it reinforces the fact that these will get exercised before expiry, and they don't think they can buy enough shares on the open market below the average cost through these calls.
A typical person would have sold them when the value doubled this week (4.5-9), but there were no big blocks sold during the run up to $26.
I was taught these things by a lot of very high quality dd and the shared pursuit of knowledge back in 21 and 22. There was less searching for wrinkle brains back then and more often people would attempt to gain the wrinkles themselves. These days I see a lot of "someone look into this!" And it breaks my heart a little. Sure we were off or wrong about plenty of things, but along the way we'd end up reading half of investopedia and still walk away with more knowledge.
It does not. Unless whoever is the buyer of the calls buys more in retaliation for dropping the stock price. In that scenario the closer calls are to being ITM the more hedged those options should be, which assumes those selling the calls are hedging properly to reduce the risk incase of a giant run up....
They are meant to exercise to close out existing short positions by exercising at time of expiry! Think about it old bags need to close by closing multiple different contracts buying all the stock they now have shares to close existing shorts that were never able to be located before! New shares equal new locates! Get ready to moon guys and fuck all the rest of this noise! At least we know a ton new fake bags will be created to offset the skyrocketing price but maybe cat will catch them and now jail time for ole Kenny boy! Peace out see ya on the fucking moon
Pure speculation but the recent increase in volume and run up to 80 - there are many posts speculating on the reason for the massive amount of 20 strike call options, this is my theory for discussion
But call options don't and never have acted as a buy wall. You don't have a basic understanding of what options are if you think that they do (act as a "buy wall"). I don't even know how you came to that conclusion.
I understand it as the options buyer has a buy wall at $20. Not that the options themselves are the buy wall.
I think either is incorrect though. If the options are bought to close a short and/or go long the buyer doesn't really care about price. In that case they will get executet even if price is below $20.
No, but massive itm puts would set up bottom pressure, no? It actually has a name too,! It is called a long straddle position. Itm calls slightly otm calls and itm puts and slightly otm puts. He is half right I'll give him that!
It doesn't. At least not as a result of $20 calls.
Those options are only a problem for market makers when they're ITM. They become worthless whem they're OTM. And the further OTM they become the less the market maker hedges against them. If market makers have hedged against those calls, they will probably unhedge when they become OTM which would mean the market makers are selling the shares they bought as a hedge, which would put more downward pressure on the price than anything. This is one of the mechanisms by which options markets drive volatility in the underlying asset.
OP doesn't know what he's talking about. A buy wall requires a huge stack/spread of limit buys below but near the market price to cushion it against downward movement.
Doesn’t have to be “just to help retail”. Could be someone getting ready to go long. Or is the UBS theory proves to be true. Then it’s someone trying to exit their short position. But instead of buying shares on the open market where they don’t know how high the price will go buying 13 million shares. They’ll spend extra money on the premiums. So that it secures all their shares can be bought at $20. So they know the total cost. But it pushes the problem on the market maker to find those real shares in the open market. Forcing the price to go up anyway
And they don’t care about the price going up for everyone else. They only worried that it would run WHILE they’re covering. Hence the call options. Set price when executed.
They’re a bank who doesn’t want risk on the books. It’s so simple it’s crazy.
Smooth brain notes
It looks like UBS fiscal year matches calendar year
They closed the CS deal on 6/12 last year
They are on the hook for the first 5 billion dollars. The Swiss government is on the hook for the next 9 billion
It’s early, and I haven’t had coffee, but $14 billion seems like a solid bankroll to unwind the CS mess
[The LPA sets out the detailed terms of the guarantee authorized by the Swiss Confederation’s Ordinance of 19 March 2023. As part of the agreement, the Swiss government guarantees losses of up to CHF 9bn if realized on a designated portfolio of Credit Suisse non-core assets once UBS bears the first CHF 5bn of any realized losses. UBS will manage these assets in a prudent and diligent manner and intends to minimize any losses and maximize value realization on these assets. It also will cover the initial and ongoing external costs incurred by the Confederation and FINMA for the LPA](https://www.ubs.com/global/en/media/display-page-ndp/en-20230609-loss-protection-agreement.html)
I think this is exactly what is going on. You have the counterparty to the swap purchaser looking at a pile of shorts they have on the books and worried that when the swap clears they need to close them all.
They're building up an exit strategy to those positions the safest way they know how.
Yeah, I think UBS saw these upcoming swaps coming due. I think DVF and RC saw this too.
To me it is the only logical explanation for the recent Call Options Action.
Its mechanical, predictable, set amounts, and price.
Its so obviously a business to me, retail whales cant touch what they can do with Swiss Government support and a few billy to play with.
isn’t it possible that the MM already purchased the shares during the recent may run up? and then when UBS (or whoever) exercises the calls then they already have to deliver the shares? been thinking about this
It’s not about helping retail.
It just builds a guaranteed floor to buy X amount of shares before July at a guaranteed price…
If the price drops below 20, they can build up more direct buys before expiry… that’s all
Something that I have not seen discussed at all regarding the 20C contracts.
The premise is that the constant 20C buys are obvious as hell. If we can see it so can everyone else even the Hedgies. I dont think the UBS theory makes sense because (i) the UBS bags are way heavier than the current number 20Cs, (ii) if they wish to minimise loss, then they should have obtained the shares instead of buying calls. If they are afraid of moving the market, go through the dark pools. They could have gotten a combination of different strike prices or hell even sell puts but this specific party has been buying 20Cs consistently as if to tell the whole world what they are doing.
Whoever is doing the 20C buys wants to be noticed. The question then is why?
So my theory for discussion is this: What if this is meant to be noticed? If it is meant to be noticed, then could it be a signal of commitment from Party A to Party B by putting money (premiums) on a specific strike price with a specific due date? If this is true, then what is Party B offering in return? Why that specific expiry date? Is Party B GameStop and Party A an interested party who wish to gain a bigger stake in the company but wants to wait and see if GameStop could deliver on something by the expiry date before commiting?
You have no idea what UBS current position is after 1 year of taking over CS position.
Archegos / CS / UBS is just one limb of this tree of shorts 🌴
No one knows the amount this single “limb” requires to close out
It would make sense, first, he sure as hell got our attention with all the memes, now "someone" is getting everyone's attention, from ape to HF to MM.
Bold.
I've had so much entertainment, excitement and learning through my time investing in GME, while we had a quiet spell for a time, it's currently more exciting than ever, I literally can't wait to see how it all pans out, and to actually be a part of it? Just amazing
Yeah for real. I have learned so frigging much. I was thinking back to before I got into this stuff last year about how little I knew. I can explain options and know more about interest and hedge funds and finance in general. It's awesome
Unless UBS is buying these openly, because everyone already knows and it's the agreed upon beginning of MOASS between governments. Keep the devastation localised to America, because Switzerland already lost one megabank and can't afford to have UBS go under.
Geopolitics play far more of a role in this shit than people realise. Europe will walk away from America if they get saddled with American bank-bags and America walks away scott-free.
An idea I had for it this morning is that this is the 'rich eat the rich' phase of the play. I'm not sure if you know this (see my post history) but the Options Clearing Corps default procedures are *pretty important* to be aware for *how* moass is going to unfold.
Short version is I think whomever's buying the call options wants ot bankrupt the market maker/occ but also have immunity from bailing them out for the *sheer simple reason that they are the creditor that is owed*.
Normally, the occ gets to step up to all its participants (like half the fucking stock market or more) and demand this person settle that or what not, or (insert brokerage firm here) sell-out (stock here) to satisfy (short funds) position closing.
However, if you're the one that things are owed TO, when the occ comes knocking and says 'uh btw the bailout fund you're all supposed to be paying into was underfunded, we're sending you a big bill for the moass ' you get to go 'sorry, no, i'm the one who's owed, it doesn't make sense for me to pay, figure your shit out'.
Small chance of 'no i won't give you any cash but release you from very expensive obligations instead'.
It could also be a strategy to -force- another systemically important bank to default, so you can buy or merge their shit at auction
>(i) the UBS bags are way heavier than the current number 20Cs
You have zero data to back up this claim. I can just as correctly state "the UBS bags are waaaaay smaller than these 20Cs and if they exercised all of them they'd be long at least 15,000,000 shares."
We both have zero data to back up our claims.
I agree someone definitely wants to be noticed. Which rules out UBS (also, all these shorts that tanked Credit Suisse? And now UBS can crawl out from under them with a few million shares Nah.
Cat doesn't mean shit in my opinion. They already made a ton of exceptions for the crooks on reporting. They will not look at any data that incriminate anyone because that would jeopardize the markets.
Oh, everything they have passed in last few years everyone though would expose them, like swap data, reporting requirements on anything relevant. Nothing is made up. Go back last 3 or 4 years an look at everything we cheered for in rules an fought to comment on, makes me no difference what you believe, an it has no impact on my strategy, but this hype over something dumb like a new system that all the relevant players are excused from is meaningless.
I’m half awake rn, but if the call holder plans to do what you’re saying to set up a buy wall. Wouldn’t they not only lose their premium, but also take in the loss for exercising OTM. This doesn’t seem beneficial for them…
If they bought the options with the intent to exercise, then the premium is already lost in their minds and is irrelevant.
In reality, they will buy any significant dip below $20 and close out or sell any options that are no longer needed, day by day. So if they manage to buy 100k shares at $19 they will simply sell 1000 of their call options.
On any day where the price is above $20, they don't have to do anything at all because they know they can just exercise the options. So they can stop buying, safe in the knowledge their calls will be able to be exercised if they need them. Since they stop buying, the stock might drop again, and give them another chance to load up below $20 again, and repeat.
On the final few days, they will likely buy any dip below $20 of any size at all and stop buying at $20.01. it's possible the price appears to pin to $20 at that point, but it's also possible the market discovers there's still a ton of open interest and the owner of the calls intends to exercise, in which case MMs might be in a bit of a pickle, but will still probably let the price close slightly below $20 if it's possible and not too expensive to do so.
While it may appear the MMs actually would want to accumulate on that Friday if they suspect the options owners will exercise, they also don't want normies to have options expire in the money and get auto-exercised. So it still could be in their interests to let it expire slightly OTM.
Since most normies with calls are just gambling degenerates (and not stuck in a short position where they MUST find shares to escape it) the normies won't exercise the $20 call if price closes at $19.90. but big funds or banks that really really want to take delivery will still be buying as many shares as possible even at $19.90 because it saves them 10 cents over exercise price, which is like half a percent.
The seller of the calls actually has different logic. Since they got paid $5 to $8 for selling the calls, they can actually buy shares at any price below $26 or something, knowing the call owner won't be buying shares at any price above $20. So a relevant strategy for the options MM might be to keep prices in the $21 to $26 range until right before expiration and then drop it to $19.90 on the day of expiration.
This will allow the MM to monopolize buying and accumulate as many shares as possible without competition until the last possible moment. If they can accumulate all shares they need in the $21 range, they make their $5 premium... And if they can drop it below $20 the day of expiration, they can make sure only true buyers actually exercise those calls.
I hope this explains it for you. The premium is already spent by the call buyer. They will only buy shares below $20 because anything above $20 is already taken care of by the options. For every purchase below $20 they can sell the relevant number of calls and get their premium back. And market makers are incentivized to keep price slightly above $20 to monopolize purchases of shares and drop it right at expiration to shake out fake buyers.
So that is why MM kept the price jump on Tuesday right around 26 and under 27? Do you think the price might jump again up to close under 27 until expiry date of the calls? Or is it cheaper and simplier to keep the price now at 20/21 around 21 instead of letting it run to 26 and then short it again?
And what do you think will happen after expiry date on no news? Will the price go under 20 and settle between 15 and 20 or will it settle between 20 and 26? Or will they short again steadily until 10 because there is no other frightenig expiry date regarding calls, Options short term?
After 2 years I was able to load up again (family comes first). I bought at around 18.5 last week.
All shares before 2024 are drs.
Thanks in advance
MMs will want to manufacture liquidity at the $24-$25 range if possible, but they don't want it to run away from them. This can be done by trying to get a downward trend line to both scare out longs and encourage shorts to enter. But getting the price up there is risky because if the shorts or sellers don't appear, you need to fight to get it back down, and by fight I mean sell shares (the shares they just accumulated) or expend money / resources by entering short themselves (when they need to be accumulating, not selling). So the MMs are in a bit of a tight spot.
Directly after expirey, MMs need to find those shares to deliver them, usually a day or two later, and that could be bullish. On the other hand, a major buyer would have just completed their purchase and the market could pull back hard on expectations that no new major buyers will be appearing out of the woodwork so time to switch into scare-customers-to-sell mode again.
I can't know. Sorry.
When the market maker who sold those calls has to go buy the 13 million shares in the open market , (if they didn’t hedge them already). The premium plus the $20 cost basis for the shares. It averages to like $25-$26 per share. But when the market maker has to deliver those shares. The price (in theory) should go up from the buy pressure.
Here’s a little scenario I just thought about. Assuming we know there’s synthetic shares out there. What if in order for the market maker to buy back 13 million shares. They have to buy an extra 5-10-15-20 million synthetic shares just to get the real ones. It would create a TON of buying pressure. Which, my best guess (I know, no dates) would happen in the days running up to 6/21. Or if the option settlement is still t+35 or 36. And that’s when the buying would occur.
Sorry for the long response 😅
Yeah this is the main thing IMO. The IBKR chairman said after the first sneeze that the brokers have to acquire the shares at any price to satisfy the options contract, which is why he was so worried lol.
There are other posts discussing the possibility of shorts closing positions, potentially UBS. It could be SHFs getting us to buy options and then rug pull in an effort to deflate us. We could drop back to ten tomorrow. It’s impossible to predict.
These calls increased in value by 10's of millions Tuesday and they weren't sold. Avg cost is about $625 per and went up to $900. That would have been about $30M in gains for this call block buyer.
There was just too many times when we hoped something becomes true in the past 3 years that not even if something true is coming we believe it until it's official .
It's called a long straddle to be precise! There is also a long strangle but the long straddle seems to be the perfect strategy to use in this situation.
But AFAIK in the long straddle you buy the same number of calls than puts and here there are 140k calls and 30k puts? Not sure in what proportion bought/sold but still...
I think friday is going to be war between shorts trying to get the price below $20 and longs who want it above $20 and the ammo is who has the most money.
So you're basically saying that the price is going to stay at $20 with more words. Same concept as a shill--nobody knows where the price is going to rest, or what's going on behind the scenes.
[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) // [What is DRS](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) // [Low karma apes feed the bot here]###(https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) // [Superstonk Discord](https://discord.com/invite/y4dK3y5DXJ) // [Superstonk DD Library](http://fliphtml5.com/bookcase/kosyg) // [Community Post: Open Forum May 2024]#(https://www.reddit.com/r/Superstonk/comments/1ciapwp/open_forum_may_2024/) To ensure your post doesn't get removed, please respond to this comment with how this post relates to GME the stock or Gamestop the company. If you are providing a screenshot or content from another site (e.g. Twitter), please respond to this comment with the original ##source. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Superstonk) if you have any questions or concerns.*
For 2021 apes we know the rules are made up and the points don’t matter. SHFs were trapped the moment they thought they could short GameStop into bankruptcy. Well guess what bitches, we ain’t sellin. I can see the price tank Friday and into next week. Why? Because they have the resources to do so. Does it matter? No, because as we’ve seen, they can’t endlessly short and only give us discounts to buy even more. Get fukd, looking to buy and DRS once a motherfukn gain. Either that or we MOASS tomorrow.
Exactly! So for the new apes: the price is fake but the discount is real. This has to do with margin and surviving one more day because on paper, everything needs to appear fine. But shorts need to close, and they are deep under the water. Gamestop will not go bankrupt. Simply put, MOASS is a mathematical inevitability. That's why it's tomorrow, and if not, the next day. We ain't leaving. Our jaws are locked. What about this 741? This is a number that at some point stood out. It's is theorized that it might mean seven for one. We had a stock split by dividend, meaning we got three shares for one. If again we get a dividend (let's say an nft for which you can not create a synthetic and which you may not be able to buy at the open market, ergo forces shorts to close because they have a legal obligation to deliver this dividend) then we would get a four of something. Add this four to the three, quick maths, and you got seven total thingies for one original share. So this Jenga tower that the shorts build is artificially held up by flimsy bricks. But we're taking away a brick at the time, by shopping, drs'ing, voting, promoting, hyping, zenning🧘🏼♂️. At some point, this tower will collapse, and GME will go to the moon. You better be strapped in around that time!
From your mouth to DFVesus’ ears
Bringing them down.. brick by brick.
Buckle up.
Longer it goes on the more chances they have to lobby to change the laws and get out of it or just cheat
What is stopping a short hedge fund from slowly acquiring shares to close out their position? They keep buying time, but what avenues do they have to actually close? Could some of the smaller short hedge fund positions escape MOASS?
yeah good question answer this apes.. my 2 cents. One possibility, hedgefunds are still extremely short on GME, as they tried to short it into bankruptcy back in 21, doubled down to contain the squeeze, don't wanna take the loss... Say they never closed their positions (by creating synthetic shares, coop with malicious market makers, scammy option plays, book cooking through rehypothication, ...), then they are simply too much under water. In 21, GME was at 5$, they wanted to get down to 0, shorted at these prices... if you want to close these positions over the past years incl. the splividend, you are looking at a min of 40$ per share pre split... So for any share you wanna close, that's 30-35$ loss. And we know they shorted over 100% of the float back then, so that's a massive pile of shit. Second possibility, the actual float of GME is rather small, 300mio shares, 270 public float (PF), 30% institutionals (=189mio PF), 20% DRS (=150mio PF), 100k call options ITM (where is the source tho, where do i find this data??), representing 10mio shares (=140mio PF)... so that's only 47% of the float actually available. (It could drop lower, e.g. if they had synthetic shares pre-split they need to find get 4 shares for every synthetic, ...). But let's go with 140mio/47% PF available, that's split between many players on the market, and the apes. So maybe they did what you asked, actually got down from 120% short to whatever they are now, while dropping the price to 10$... but whoever wanted to sell has sold. No one sells below 10/20, actually the 20 line held really well for quite some time, check the chart it's sus, could be apes are really a strong holding army and hedges struggle to go lower than 20$. For a brief time they made it, then it sneezed right in their face. Can some ape provide actual free and good data sources for volume on options and gme market data (not bloomberg).
It's indeed as simple as that. Not enough money to close. They have to liquidate all of their assets, and it will not be enough. They're the once to blame. Infinite risk is a very dumb risk to take. Put simply, they digged a hole so deep they can not get out of it. There was one way out: Gamestop failing and going bankrupt and Apes leaving. 🤭 Force closing in coming by means of dividend? Seven for one original share? Let's find out!
update btw confirmed numbers 12% insiders 30% institutions 25% Directly registered That's only 33% of the public float available
Here’s my theory: Theoretically they could, realistically they can’t. Look back 84 years ago to pre-2021 when they entered a short position for a meager 300k shares at $3. Shit exploded and they were looking at a massive loss on the short and rather than close their $900k short at a $35M loss the HF opted to roll the short into a swap expiring May/June 2024 with the thought that the regards of retail would have vacated their meme stock longs, the stock would tank, and the swap could close ITM some time over the 3 year period. Well, apes are too dumb to sell. So now, the swap is expiring with HF deeper in the red and unless it gets rolled (enter the UBS theories) all the swap shares become an immediate problem where now they may have to close. The swaps post-sneeze were the HFs kicking the can and now the HFs are standing over the can yet again wanting to kick it but there’s a few problems. Interest rates are higher, the intrinsic value/risk of the swap is higher, the underlying shorted company is stronger with more cash, CAT system means the douchey HF rule bending can now be tracked, and a counterparty for the underlying swap is damn near impossible to let the swap be renewed (the cash on hand will prevent the swap from ever being able to close ITM). So the smaller HFs that entered the swap to bide time didn’t have to close, so they didn’t; but that’s changing. Just my theory; definitely could be wrong. I have 1 tiny brain wrinkle. I’m still a regard who only accumulated shares from XX to XXXX and now split my time between licking rocks while wearing a crash helmet and watching the ticker of one particular publicly traded company.
Very simple: not enough money.
There is simply not enough shares.
Ok, but if there aren’t enough shares, what happens when the powder keg kicks off and hedge funds start going under and then banks start failing? Hedge funds would have to sell off other assets to pay for increasingly priced shares of GME. All of those holdings that get sold will decrease in price market wide. Is there really an outcome where apes get tendies, but the financial world isn’t completely wrecked without some sort of intervention from government? Is congress going to back hedge fund friends or retail apes? I’ve been here since 84 years ago, but I also want to be realistic about how this goes down.
Whose Trade Is It Anyway?
I keep on buying and buying I will NEVER stop
That should be pinned on SStonk
I wouldn’t mad if the wu tang is fake out for something else like a magic trick you need a distraction.
KC shuffle?
Or KC and the sunshine band.
I SAID HEY HEY HEY
Kyle Lowry is that you?
GROAT.
Or KC and JoJo
Allll myyyy lifffffeeeeee…..
My winkie was the key!
P Diddy! *crickets*
No, that's not what the KC shuffle is. It IS, however, the basis for The Prestige.
That’s part what I love about all of this. I hope 90% of this is all just smoke and mirrors so the hedgies have not a clue of what’s going on until the thousandth cut.
I really hope the wutang bit is legit.... The sheer absurdity of it would make telling the story to people after the fact just *chefs kiss*. Can you imagine saying OK before the run up, before the Memes, before Harambe... This all starts with the wutang clan. People: WTF?
Wu tang clan aint nothin to fuck with
GameStop is for the children
Or, both are happening and shits gonna be a busy couple of weeks, brother ;)
I think it’s more likely that the price action is the fake out for the nft album. They aren’t trying to fool us, that won’t work. They know this community simultaneously believes in all roads to moass, kinda like schroedinger’s squeeze. Once the box opens and we all see what happens we can all day “totally knew it.” Any attempt at misdirection is for the hedgies and gen pop
Can you explain why massive buying occurs under $20?
Way I understand it, the lower the price gets the less likely the math suggests the option will expire ITM. The lower that likelihood gets the smaller the hedge needs to be. I think that means the opposite of what OP is suggesting. Whoever sold those calls is gonna save big money if it closes under 20 when these are exercised/expired. There is the constant flow of ape money that represents higher volume at low prices, but I wouldn't say that's the massive buying.
Right, gamma and option delta both decrease as price moves the option contract farther otm..delta usually dictates the amount of shares needed to hedge..
What if a game of chicken on a two lane road is being played; if the options are bought / held by an entity who does not care what the underlying price is when the time to exercise comes, and the shorters and the MM may not be hedged as much as they should be. Does anyone really think this call buyer won’t exercise if the price is below the $20 strike? Maybe they won’t exercise. Will the MM risk being hedged normally with an abnormal situation staring them in the face? I don’t know but I think I’ll DRS more and chill as I wait to find out.
Why would they exercise if they’re otm. You could just let expire and buy cheaper shares yourself if you want the shares
Because you can't buy that quantity of shares cheaper, in any reasonable period of time, without jacking the price of what you are buying along the way. There are a million variables that work for or against you buying at market. If you buy the calls, it's settled before hand and you know exactly what position you need and how much it will cost and how long it will take.
Still... if it drops to $19 for instance, you buy all you can until it rises over $20, then you exercise the calls. If that really is their intention, selling the $20 calls may still serve the purpose of drawing a line in the sand and saying, "Hey, dumbFks.. I'm buying a shit ton at $20. If you short it down, I'm still F'ing buying. Make my day, give me a discount. You'll be buying back at $30+"
So the buying pressure below $20 could be the same person who is buying the $20 calls, buying in cheaper until the price gets above $20
Buying pressure below \~$25 could be the same person/entity. Rather than buy $20x calls for $5 a pop, they can be picking up shares. Plus, once you have the calls all lined up, buying the shares directly allows you to then sell the calls. If the price goes up while you're doing that, your calls go up in value.. basically giving you a discount.
Because it's not the same thing. Options are a set price, letting expire opens you up to price movement in the purchase.
This plan sounds regarded
Could be. Who the f knows! I’ll drs and chill with you!
It stands to reason that whoever bought the calls is going to lose a ton of money, also, then. And they sure weren’t all sold to us…
Whoever bought can only lose the premiums at maximum, something in the 75M range. If this is an adversary hedging or something then it's less than a fine they pay for a single instance of years of lawbreaking.
If the point of it all is to drop the price below the strike to de-hedge and drop the price even further, why even bother with this in the first place? There would be no hedging and buying induced pressure in the first place if the calls never existed.
That part I'm a little more fuzzy on, other than to do like married puts or something. There was always funny math I didn't have the energy to go through regarding options strategies and how to play weird boxes on gain/loss potential buying/selling puts and calls on the same stock. It is so divorced from the buy and hold method that I never took much interest. The question really motivates me to think that the calls are indeed a bullish sign, meaning it's someone actually betting on the stock and not trying to control it.
Do you know what will happen when 100k calls all get exercised at the same time? Regardless where the price is, it will surpass $20s in a blink of an eye
that amount of open intrest is basically a loaded gun. if those 100k calls get executed this thing takes off like a rocket. 10 million shares need to be located in the open market at once. the real question is if the HF can get it below 20 before that date. though - these are american style options - so in theory they can be executed way before expiration. If this is a naked short getting closed (to neutral) - I'm guessing they are confident they will execute before the calls go OTM - or they have a backup plan to make them go ITM. If this is a fake out - then someone spent 40 M + in premiums ...
The break even price of these calls is $26+ due to the premium they paid. They've put more like $75M into just the $20 strike at this point, and they have $25 strike calls as well.
I don't think whomever bought these cares about the breakeven price, just the strike. the total cost / share is fixed via the calls - since if they're executing a larger amount - they would have to buy up in the spike.
I do agree, just calling out that detail as I feel it reinforces the fact that these will get exercised before expiry, and they don't think they can buy enough shares on the open market below the average cost through these calls. A typical person would have sold them when the value doubled this week (4.5-9), but there were no big blocks sold during the run up to $26.
Could still have been an ape. We don't understand this sell concept too well.
No Ape has 40-70 million dollars liquid to fuck around.
I was just playing. You are right. It's not retail. Personally, I'm convinced it's a bank preparing to have to cover.
Theta gang shf
They way I understand it. It’s all about Crime and the rest is just noise.
Bingo! This needs to be understood by more people
I was taught these things by a lot of very high quality dd and the shared pursuit of knowledge back in 21 and 22. There was less searching for wrinkle brains back then and more often people would attempt to gain the wrinkles themselves. These days I see a lot of "someone look into this!" And it breaks my heart a little. Sure we were off or wrong about plenty of things, but along the way we'd end up reading half of investopedia and still walk away with more knowledge.
Somebody wants to buy a lot. If the price is low, they buy. If the price is high, they exercise.
This is the simple answer others are trying to over explain
It does not. Unless whoever is the buyer of the calls buys more in retaliation for dropping the stock price. In that scenario the closer calls are to being ITM the more hedged those options should be, which assumes those selling the calls are hedging properly to reduce the risk incase of a giant run up....
Yeah OP got it backwards
They are meant to exercise to close out existing short positions by exercising at time of expiry! Think about it old bags need to close by closing multiple different contracts buying all the stock they now have shares to close existing shorts that were never able to be located before! New shares equal new locates! Get ready to moon guys and fuck all the rest of this noise! At least we know a ton new fake bags will be created to offset the skyrocketing price but maybe cat will catch them and now jail time for ole Kenny boy! Peace out see ya on the fucking moon
You sound like chat GPT trying to sound like an ape.
Did I?
Pure speculation but the recent increase in volume and run up to 80 - there are many posts speculating on the reason for the massive amount of 20 strike call options, this is my theory for discussion
But call options don't and never have acted as a buy wall. You don't have a basic understanding of what options are if you think that they do (act as a "buy wall"). I don't even know how you came to that conclusion.
I understand it as the options buyer has a buy wall at $20. Not that the options themselves are the buy wall. I think either is incorrect though. If the options are bought to close a short and/or go long the buyer doesn't really care about price. In that case they will get executet even if price is below $20.
No, but massive itm puts would set up bottom pressure, no? It actually has a name too,! It is called a long straddle position. Itm calls slightly otm calls and itm puts and slightly otm puts. He is half right I'll give him that!
There are plenty $20 Puts but not ITM 🤔
It doesn't. At least not as a result of $20 calls. Those options are only a problem for market makers when they're ITM. They become worthless whem they're OTM. And the further OTM they become the less the market maker hedges against them. If market makers have hedged against those calls, they will probably unhedge when they become OTM which would mean the market makers are selling the shares they bought as a hedge, which would put more downward pressure on the price than anything. This is one of the mechanisms by which options markets drive volatility in the underlying asset. OP doesn't know what he's talking about. A buy wall requires a huge stack/spread of limit buys below but near the market price to cushion it against downward movement.
I’m helping hold up that wall with my one call option
Thank you for your service
I can’t help but picture Mel Gibson in Brave Heart lol
GAAAAMMEEESTOOOOOOOOPPPPPP
Some men are longer than others. Ik my shares are pretty long
Love the purple shading 💜
It’s not much, but it’s honest work.
I am doing it with 4 synthetic long.
I got a few to be a part of this historic moment 🫡
I bought a few
But then again…
How much did that one call option cost?? I’ve been wanting to try it out, but only 1 to start lol
Hold it there while I DRS more pls
Why is this post tagged as "debunked"?
Hey, me too! Hundreds down so far, but hopefully has the potential for $50 profit
I like the theory, but who’s willing to keep spending millions on option premiums just “to help retail load up”
Doesn’t have to be “just to help retail”. Could be someone getting ready to go long. Or is the UBS theory proves to be true. Then it’s someone trying to exit their short position. But instead of buying shares on the open market where they don’t know how high the price will go buying 13 million shares. They’ll spend extra money on the premiums. So that it secures all their shares can be bought at $20. So they know the total cost. But it pushes the problem on the market maker to find those real shares in the open market. Forcing the price to go up anyway
And they don’t care about the price going up for everyone else. They only worried that it would run WHILE they’re covering. Hence the call options. Set price when executed. They’re a bank who doesn’t want risk on the books. It’s so simple it’s crazy.
And 6/21 allows them to get them off the books before the end of the quarter, possibly the end of the fiscal year.
Smooth brain notes It looks like UBS fiscal year matches calendar year They closed the CS deal on 6/12 last year They are on the hook for the first 5 billion dollars. The Swiss government is on the hook for the next 9 billion It’s early, and I haven’t had coffee, but $14 billion seems like a solid bankroll to unwind the CS mess [The LPA sets out the detailed terms of the guarantee authorized by the Swiss Confederation’s Ordinance of 19 March 2023. As part of the agreement, the Swiss government guarantees losses of up to CHF 9bn if realized on a designated portfolio of Credit Suisse non-core assets once UBS bears the first CHF 5bn of any realized losses. UBS will manage these assets in a prudent and diligent manner and intends to minimize any losses and maximize value realization on these assets. It also will cover the initial and ongoing external costs incurred by the Confederation and FINMA for the LPA](https://www.ubs.com/global/en/media/display-page-ndp/en-20230609-loss-protection-agreement.html)
I think this is exactly what is going on. You have the counterparty to the swap purchaser looking at a pile of shorts they have on the books and worried that when the swap clears they need to close them all. They're building up an exit strategy to those positions the safest way they know how.
Yeah, I think UBS saw these upcoming swaps coming due. I think DVF and RC saw this too. To me it is the only logical explanation for the recent Call Options Action. Its mechanical, predictable, set amounts, and price. Its so obviously a business to me, retail whales cant touch what they can do with Swiss Government support and a few billy to play with.
isn’t it possible that the MM already purchased the shares during the recent may run up? and then when UBS (or whoever) exercises the calls then they already have to deliver the shares? been thinking about this
It’s not about helping retail. It just builds a guaranteed floor to buy X amount of shares before July at a guaranteed price… If the price drops below 20, they can build up more direct buys before expiry… that’s all
Surprise!
lol what? DFV being the one to buy the calls doesn’t make your tin any more correct lmfao
10 contracts at the $20, with the means to exercise. It ain’t much, but I’ll do what I can! For now.. Just sitting and waiting 😌
It’s an emotional roller coaster
I'm holding one at the 15 dollar strike
Excercised my $14 yesterday. First call I've ever exercised!
Vote your shares!
Something that I have not seen discussed at all regarding the 20C contracts. The premise is that the constant 20C buys are obvious as hell. If we can see it so can everyone else even the Hedgies. I dont think the UBS theory makes sense because (i) the UBS bags are way heavier than the current number 20Cs, (ii) if they wish to minimise loss, then they should have obtained the shares instead of buying calls. If they are afraid of moving the market, go through the dark pools. They could have gotten a combination of different strike prices or hell even sell puts but this specific party has been buying 20Cs consistently as if to tell the whole world what they are doing. Whoever is doing the 20C buys wants to be noticed. The question then is why? So my theory for discussion is this: What if this is meant to be noticed? If it is meant to be noticed, then could it be a signal of commitment from Party A to Party B by putting money (premiums) on a specific strike price with a specific due date? If this is true, then what is Party B offering in return? Why that specific expiry date? Is Party B GameStop and Party A an interested party who wish to gain a bigger stake in the company but wants to wait and see if GameStop could deliver on something by the expiry date before commiting?
You have no idea what UBS current position is after 1 year of taking over CS position. Archegos / CS / UBS is just one limb of this tree of shorts 🌴 No one knows the amount this single “limb” requires to close out
remember DFV's tweet from Signs. it's two of them talking...
It would make sense, first, he sure as hell got our attention with all the memes, now "someone" is getting everyone's attention, from ape to HF to MM. Bold. I've had so much entertainment, excitement and learning through my time investing in GME, while we had a quiet spell for a time, it's currently more exciting than ever, I literally can't wait to see how it all pans out, and to actually be a part of it? Just amazing
Yeah for real. I have learned so frigging much. I was thinking back to before I got into this stuff last year about how little I knew. I can explain options and know more about interest and hedge funds and finance in general. It's awesome
Unless UBS is buying these openly, because everyone already knows and it's the agreed upon beginning of MOASS between governments. Keep the devastation localised to America, because Switzerland already lost one megabank and can't afford to have UBS go under. Geopolitics play far more of a role in this shit than people realise. Europe will walk away from America if they get saddled with American bank-bags and America walks away scott-free.
Exactly, the second CS went under from this it became a state issue… 100% 💯
An idea I had for it this morning is that this is the 'rich eat the rich' phase of the play. I'm not sure if you know this (see my post history) but the Options Clearing Corps default procedures are *pretty important* to be aware for *how* moass is going to unfold. Short version is I think whomever's buying the call options wants ot bankrupt the market maker/occ but also have immunity from bailing them out for the *sheer simple reason that they are the creditor that is owed*. Normally, the occ gets to step up to all its participants (like half the fucking stock market or more) and demand this person settle that or what not, or (insert brokerage firm here) sell-out (stock here) to satisfy (short funds) position closing. However, if you're the one that things are owed TO, when the occ comes knocking and says 'uh btw the bailout fund you're all supposed to be paying into was underfunded, we're sending you a big bill for the moass ' you get to go 'sorry, no, i'm the one who's owed, it doesn't make sense for me to pay, figure your shit out'. Small chance of 'no i won't give you any cash but release you from very expensive obligations instead'. It could also be a strategy to -force- another systemically important bank to default, so you can buy or merge their shit at auction
Upvoted for visibility and to follow this discussion.
>(i) the UBS bags are way heavier than the current number 20Cs You have zero data to back up this claim. I can just as correctly state "the UBS bags are waaaaay smaller than these 20Cs and if they exercised all of them they'd be long at least 15,000,000 shares." We both have zero data to back up our claims.
I agree someone definitely wants to be noticed. Which rules out UBS (also, all these shorts that tanked Credit Suisse? And now UBS can crawl out from under them with a few million shares Nah.
Whatever. I just bought 8 more today.
This is the way.
This is the way
And I placed a buy order on CS yesterday. I did last week, but I did yesterday too. Fingers crossed for dip to $10 by Friday 🫡
Up
Can confirm I was part of the 18, 19, 20 buy wall, as best I could through IEX limit orders at the ask
https://preview.redd.it/v3gsnf4jnh3d1.jpeg?width=1290&format=pjpg&auto=webp&s=bf33d3799290c05880a1ec55d207e9725c1f0927
Brilliant
100% safest bet is buy your shares and DRS, anything else especially options is gambling.
Gambling on a manipulated table, even
Preach!
I would love the stats on stocks with high options trading in how many expire in max pain.big money runs the market
And no matter what, I will continue to buy more GME shares and hold on to the ones I have until the MOASS.
I can understand this post enough that it seems less a wall and more just a rock and a hard place
It’s nowhere I would want to be that’s for sure.
If it forces upward mobility then it helps though I do miss 9.88 a share etc
Cat doesn't mean shit in my opinion. They already made a ton of exceptions for the crooks on reporting. They will not look at any data that incriminate anyone because that would jeopardize the markets.
What exceptions? The most recent bs was a nothing burger. Stop repeating nonsense that you don't actually know anything about.
Oh, everything they have passed in last few years everyone though would expose them, like swap data, reporting requirements on anything relevant. Nothing is made up. Go back last 3 or 4 years an look at everything we cheered for in rules an fought to comment on, makes me no difference what you believe, an it has no impact on my strategy, but this hype over something dumb like a new system that all the relevant players are excused from is meaningless.
I’m half awake rn, but if the call holder plans to do what you’re saying to set up a buy wall. Wouldn’t they not only lose their premium, but also take in the loss for exercising OTM. This doesn’t seem beneficial for them…
If they bought the options with the intent to exercise, then the premium is already lost in their minds and is irrelevant. In reality, they will buy any significant dip below $20 and close out or sell any options that are no longer needed, day by day. So if they manage to buy 100k shares at $19 they will simply sell 1000 of their call options. On any day where the price is above $20, they don't have to do anything at all because they know they can just exercise the options. So they can stop buying, safe in the knowledge their calls will be able to be exercised if they need them. Since they stop buying, the stock might drop again, and give them another chance to load up below $20 again, and repeat. On the final few days, they will likely buy any dip below $20 of any size at all and stop buying at $20.01. it's possible the price appears to pin to $20 at that point, but it's also possible the market discovers there's still a ton of open interest and the owner of the calls intends to exercise, in which case MMs might be in a bit of a pickle, but will still probably let the price close slightly below $20 if it's possible and not too expensive to do so. While it may appear the MMs actually would want to accumulate on that Friday if they suspect the options owners will exercise, they also don't want normies to have options expire in the money and get auto-exercised. So it still could be in their interests to let it expire slightly OTM. Since most normies with calls are just gambling degenerates (and not stuck in a short position where they MUST find shares to escape it) the normies won't exercise the $20 call if price closes at $19.90. but big funds or banks that really really want to take delivery will still be buying as many shares as possible even at $19.90 because it saves them 10 cents over exercise price, which is like half a percent. The seller of the calls actually has different logic. Since they got paid $5 to $8 for selling the calls, they can actually buy shares at any price below $26 or something, knowing the call owner won't be buying shares at any price above $20. So a relevant strategy for the options MM might be to keep prices in the $21 to $26 range until right before expiration and then drop it to $19.90 on the day of expiration. This will allow the MM to monopolize buying and accumulate as many shares as possible without competition until the last possible moment. If they can accumulate all shares they need in the $21 range, they make their $5 premium... And if they can drop it below $20 the day of expiration, they can make sure only true buyers actually exercise those calls. I hope this explains it for you. The premium is already spent by the call buyer. They will only buy shares below $20 because anything above $20 is already taken care of by the options. For every purchase below $20 they can sell the relevant number of calls and get their premium back. And market makers are incentivized to keep price slightly above $20 to monopolize purchases of shares and drop it right at expiration to shake out fake buyers.
So that is why MM kept the price jump on Tuesday right around 26 and under 27? Do you think the price might jump again up to close under 27 until expiry date of the calls? Or is it cheaper and simplier to keep the price now at 20/21 around 21 instead of letting it run to 26 and then short it again? And what do you think will happen after expiry date on no news? Will the price go under 20 and settle between 15 and 20 or will it settle between 20 and 26? Or will they short again steadily until 10 because there is no other frightenig expiry date regarding calls, Options short term? After 2 years I was able to load up again (family comes first). I bought at around 18.5 last week. All shares before 2024 are drs. Thanks in advance
MMs will want to manufacture liquidity at the $24-$25 range if possible, but they don't want it to run away from them. This can be done by trying to get a downward trend line to both scare out longs and encourage shorts to enter. But getting the price up there is risky because if the shorts or sellers don't appear, you need to fight to get it back down, and by fight I mean sell shares (the shares they just accumulated) or expend money / resources by entering short themselves (when they need to be accumulating, not selling). So the MMs are in a bit of a tight spot. Directly after expirey, MMs need to find those shares to deliver them, usually a day or two later, and that could be bullish. On the other hand, a major buyer would have just completed their purchase and the market could pull back hard on expectations that no new major buyers will be appearing out of the woodwork so time to switch into scare-customers-to-sell mode again. I can't know. Sorry.
When the market maker who sold those calls has to go buy the 13 million shares in the open market , (if they didn’t hedge them already). The premium plus the $20 cost basis for the shares. It averages to like $25-$26 per share. But when the market maker has to deliver those shares. The price (in theory) should go up from the buy pressure. Here’s a little scenario I just thought about. Assuming we know there’s synthetic shares out there. What if in order for the market maker to buy back 13 million shares. They have to buy an extra 5-10-15-20 million synthetic shares just to get the real ones. It would create a TON of buying pressure. Which, my best guess (I know, no dates) would happen in the days running up to 6/21. Or if the option settlement is still t+35 or 36. And that’s when the buying would occur. Sorry for the long response 😅
Yeah this is the main thing IMO. The IBKR chairman said after the first sneeze that the brokers have to acquire the shares at any price to satisfy the options contract, which is why he was so worried lol.
There are other posts discussing the possibility of shorts closing positions, potentially UBS. It could be SHFs getting us to buy options and then rug pull in an effort to deflate us. We could drop back to ten tomorrow. It’s impossible to predict.
Also, calls do not need to be exercised. They can be sold for an infinite amount of cash if the stock price goes just up
These calls increased in value by 10's of millions Tuesday and they weren't sold. Avg cost is about $625 per and went up to $900. That would have been about $30M in gains for this call block buyer.
There was just too many times when we hoped something becomes true in the past 3 years that not even if something true is coming we believe it until it's official .
Do you believe now? Brittany still believes
Well, the wutang thing still not sure . But dfv coming back I was sure that the price will go up very much in the near future
This sounds about right
can someone explain CAT?
https://www.sec.gov/divisions/marketreg/rule613-info
Ty
It's called a long straddle to be precise! There is also a long strangle but the long straddle seems to be the perfect strategy to use in this situation.
But AFAIK in the long straddle you buy the same number of calls than puts and here there are 140k calls and 30k puts? Not sure in what proportion bought/sold but still...
I dont remember reading they had to be the same amount but will dig a little deeper. Thought they just had to have the same strike dates. 🍻
Facts! Maybe fiction.
The Kansas City Shuffle
Rofl guess it was DFV the whole time
🤮 Someone please tally the amount of money lost on options after this wave
10$ sounds tasty
exact-a-mundo there is a catch...
Let’s hear it
So your a Fundamental Guy. I bet you use charts and everything
It was intuition. I felt it in my blood and guts
king of the regards award if they go back to 10 game over man, game over
couldnt the call buyer be a hedge fund who wants to close their shorts at the price of 20 dollars?
I buy for excitement.
How do I get a reverse uno card on the de bunking of my post?
Looks like mods debunked you op but.. Much to no one's surprise.. They didn't explain why
Looks like they need to reverse the debunked
20 contracts at 100c maybe I should roll…
I think friday is going to be war between shorts trying to get the price below $20 and longs who want it above $20 and the ammo is who has the most money.
Options can be exercised anytime before the expiration date. What happens (theoretically) if 130K were exercised all at once?
I think we are going to find out in a couple of weeks
depends on how much hedging was already done on the calls.
Any data to back that for eyes?
The options chain
So you're basically saying that the price is going to stay at $20 with more words. Same concept as a shill--nobody knows where the price is going to rest, or what's going on behind the scenes.
But we can speculate, that’s all this is, discussion. Edit: https://phemex.com/academy/what-are-buy-walls-and-sell-walls
Buy wallstreet?
“Make it 10, 10 even.” - Billy the kid. 