Stocks - The Best Buys 2

[manwiches]

Originally Posted by Slava

The regulators can't do much about the gamma squeeze, because that's what this is. I don't think it's a short squeeze, and I'll explain what I mean in a second. What could get the authorities involved at this point though, is the hacking of Citron's accounts and trying to take down their website. Obviously, that's not going to draw positive attention. And then you have Left saying that he and his family were threatened, and of course that should rightly draw the attention of the authorities. Disagreeing with someone's investment thesis is one thing, but threats of physical harm are past the line (obviously!). Of course, if there are players who are willfully manipulating the market, and it can be demonstrated, they're going to have an issue.



A gamma squeeze is when there is a run on out of the money calls, and a market maker (who is selling those calls) wants to hedge that risk. So, naturally they buy the underlying stock. When you have a lot of call volume and those calls expire in a short-time frame, the market makers basically have to cover that potential risk, which makes them buy more shares. You can see how that creates a feedback loop pretty quickly...more shares are bought, which drives up the price of the shares and encourages people to buy more out of the money calls and the MM has to buy more shares. I don't want to bore people, but gamma is the rate of change of delta (which is a metric that reflects how "in the money" or "out of the money" an option is. Gamma is the highest right near the strike price. Anwyay, just think of that feedback loop and look at Tesla over the past year or so or GME this past week and you can get a pretty good idea of what's happening.



A short squeeze is when people who are short a stock have to cover. First, just to make sure we're on the same page, to short a stock you borrow the shares, sell them and have to give the lender the shares back. If you bought them at $10 and the go to $5, you replace those shares and make $5 (just ignore the cost to borrow for this). When you get a short squeeze its a case where people have to cover those short positions because the price has risen, and the flurry of those covering short-sellers boosts the prices even more...which is the squeeze.



In the case of GME, I think it's a gamma squeeze (if anyone cares, and sorry if no one does, but I just find these things fascinating). It could become a short squeeze, and maybe there are some elements, but to me this is driven by options.

I love this. Thank you. I never gave that any thought!

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[Cappy]

Originally Posted by Slava

. In the case of GME, I think it's a gamma squeeze (if anyone cares, and sorry if no one does, but I just find these things fascinating). It could become a short squeeze, and maybe there are some elements, but to me this is driven by options.

Thanks for the post, Slava. Is it possible to have a gamma and short wheeze? I understand that GME was one of the most shorted stocks on the market.

Also, in my ignorance of technical market analysis, what is the likely end result of a gamma squeeze? Probably many different cases but what you likely see.

Also you don’t need to consider your answer investing advice lol. I’m more just curious. I bought my 1 put and I’m not touching this cluster#### again

[bizaro86]

Originally Posted by Slava

The regulators can't do much about the gamma squeeze, because that's what this is. I don't think it's a short squeeze, and I'll explain what I mean in a second. What could get the authorities involved at this point though, is the hacking of Citron's accounts and trying to take down their website. Obviously, that's not going to draw positive attention. And then you have Left saying that he and his family were threatened, and of course that should rightly draw the attention of the authorities. Disagreeing with someone's investment thesis is one thing, but threats of physical harm are past the line (obviously!). Of course, if there are players who are willfully manipulating the market, and it can be demonstrated, they're going to have an issue.

A gamma squeeze is when there is a run on out of the money calls, and a market maker (who is selling those calls) wants to hedge that risk. So, naturally they buy the underlying stock. When you have a lot of call volume and those calls expire in a short-time frame, the market makers basically have to cover that potential risk, which makes them buy more shares. You can see how that creates a feedback loop pretty quickly...more shares are bought, which drives up the price of the shares and encourages people to buy more out of the money calls and the MM has to buy more shares. I don't want to bore people, but gamma is the rate of change of delta (which is a metric that reflects how "in the money" or "out of the money" an option is. Gamma is the highest right near the strike price. Anwyay, just think of that feedback loop and look at Tesla over the past year or so or GME this past week and you can get a pretty good idea of what's happening.

A short squeeze is when people who are short a stock have to cover. First, just to make sure we're on the same page, to short a stock you borrow the shares, sell them and have to give the lender the shares back. If you bought them at $10 and the go to $5, you replace those shares and make $5 (just ignore the cost to borrow for this). When you get a short squeeze its a case where people have to cover those short positions because the price has risen, and the flurry of those covering short-sellers boosts the prices even more...which is the squeeze.

In the case of GME, I think it's a gamma squeeze (if anyone cares, and sorry if no one does, but I just find these things fascinating). It could become a short squeeze, and maybe there are some elements, but to me this is driven by options.

I think market makers delta hedging and getting burned by gamma is the underlying cause here, but I do think the high short interest is contributing. Those who had a short position 10x ago have to cover as their short has blown out, which adds buyers.

Part of what is unique about this imo is the absolute lack of price sensitivity among buyers of out of the money calls options. Implied volatility on is at unprecedented levels, which is the only reason the market makers are still in this, but the r/wsb types are paying it.

I bought puts about 100% ago, but I'm flat on them. The implied volatility has come up so much that the puts are still trading at what I paid for them.

[IGGYRULES]

Amci vote date soon! Expect it to bounce back this week to $20 leading into the vote date. It will likely drop some after the vote and then onward and upward. I think this is a minimum 1 month hold post vote date to see the full potential. I jumped back in heavy on the the undervalued AMCI warrants after taking profits from CCIV. Still holding a good chunk of CCIV commons and was early on some calls that will PRINT if it CCIV/Lucid gets announced before mid February. Good luck all!!!

[manwiches]

Originally Posted by IGGYRULES

Amci vote date soon! Expect it to bounce back this week to $20 leading into the vote date. It will likely drop some after the vote and then onward and upward. I think this is a minimum 1 month hold post vote date to see the full potential. I jumped back in heavy on the the undervalued AMCI warrants after taking profits from CCIV. Still holding a good chunk of CCIV commons and was early on some calls that will PRINT if it CCIV/Lucid gets announced before mid February. Good luck all!!!

AMCI is ready for its reversal

I started scaling Friday at 50% fib (16.1 ave). Will add all the way down to VPoC 15.7 on 1mo/4hr chart. Risk at 38.2% fib. Targets are 100%(19) and 127.2%(20.8) inside 1-2 weeks. 50% scaled in, as I believe it has the potential to fall a bit more to the VPoC, given the position of the TMO and TTM on the 4hr chart.



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[MJK]

Ive been taking financing deals lately with the strategy to sell the stock break even and keep the warrants. I have been taking almost every single deal that comes my way.

N.VN
TH.TO
ACB
PLTH.CN
NCU.TO

[Krovikan]

Originally Posted by MJK

Ive been taking financing deals lately with the strategy to sell the stock break even and keep the warrants. I have been taking almost every single deal that comes my way.

N.VN
TH.TO
ACB
PLTH.CN
NCU.TO

I landed on a similar strategy this month, but there is a specific "stair step" patter I look for before buying.

I missed out on TMD due to a currency exchange issue (would have made so much on this one), picked up ML this week and already looking like a winner.

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[Slava]

Originally Posted by Cappy

Thanks for the post, Slava. Is it possible to have a gamma and short wheeze? I understand that GME was one of the most shorted stocks on the market.

Also, in my ignorance of technical market analysis, what is the likely end result of a gamma squeeze? Probably many different cases but what you likely see.

Also you don’t need to consider your answer investing advice lol. I’m more just curious. I bought my 1 put and I’m not touching this cluster#### again

It can definitely be both and this could well be. The truth is delineating between which portion is a result of shorts scrambling to cover and which is due to the gamma squeeze is hard to know.

As far as what happens now, I have no idea. If call buying drops, you could see shares drop quickly as well, but if people keep piling in, it could roll on for longer. I can't really predict that, and this kind of thing isn't my bag. I'm fairly fundamental, so a company like Gamestop doesn't mesh with that. It doesn't mean you can't make money there and there are plenty of different ways to do things. There's no right or wrong way!

[bizaro86]

Originally Posted by Slava

It can definitely be both and this could well be. The truth is delineating between which portion is a result of shorts scrambling to cover and which is due to the gamma squeeze is hard to know.

As far as what happens now, I have no idea. If call buying drops, you could see shares drop quickly as well, but if people keep piling in, it could roll on for longer. I can't really predict that, and this kind of thing isn't my bag. I'm fairly fundamental, so a company like Gamestop doesn't mesh with that. It doesn't mean you can't make money there and there are plenty of different ways to do things. There's no right or wrong way!

I think its pretty likely GME will issue more shares. Either underwritten, at-the-market, or through a PIPE. They'd be crazy not to take advantage of this, imo, and issuing new stock at the current prices would be very accretive to the actual value of their business.

[CroFlames]

I almost got swept up in the GME craze with all the yoloing on WSB and considered putting in some decent money.

Then I snapped out of it.

I will throw some money at it Monday Because it’ll be kinda fun. See what happens.

[IGGYRULES]

Instead of GME I think BB is a more sure bet both in the short term and long term.

[ComixZone]

Originally Posted by IGGYRULES

Instead of GME I think BB is a more sure bet both in the short term and long term.

I'm going into BB on Monday to see where it goes.

...GME is tempting, but at the same time...seems baffling to think it will go the way WSB is banking on it to...

[CroFlames]

I’m certainly doing BB. That isn’t just a WSB thing, that’s a good investment imo.

But the GME thing is interesting. I don’t pretend to understand the mechanics of it, but the feedback loop that was created was crazy.

[Leondros]

Originally Posted by IGGYRULES

Amci vote date soon! Expect it to bounce back this week to $20 leading into the vote date. It will likely drop some after the vote and then onward and upward. I think this is a minimum 1 month hold post vote date to see the full potential. I jumped back in heavy on the the undervalued AMCI warrants after taking profits from CCIV. Still holding a good chunk of CCIV commons and was early on some calls that will PRINT if it CCIV/Lucid gets announced before mid February. Good luck all!!!

Warrant holders have to be careful about that call option based on the 20/30 day $18 target. I have so many warrants that I would never be excercising them all so need to time that.

[IGGYRULES]

Originally Posted by Leondros

Warrant holders have to be careful about that call option based on the 20/30 day $18 target. I have so many warrants that I would never be excercising them all so need to time that.

Need to watch that for sure. Once it trades $18+ over 20 of the last 30 trading days they can call them. Doesn't mean they will. Also they will be easy to flip and trade at a slight discount to intrinsic value once that condition is met. There could be a drop in commons in anticipation of the share dilution at that point as well. I'll likely scale out along the way.

[Krovikan]

Has anyone had issues with Questrade IPO center? I just had them cancel my ML order, and the way they worded the email, they claim I submitted the order after the offering was closed, but I submitted around 12 hours before it closed.


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[CASe333]

So I've googled and reread this a few times. Is it fair to say that a gamma and short squeeze are basically the same thing to us laymans but at different phases of the squeeze? In the case of a gamma squeeze call options are hedged so there is basically doubling down to keep bet going whereas a short squeeze is the outcome of what happens when bet is doubled down on and stock goes up so shorts have to cover their bets?

End of the day there is no way I would put $$ in GME at this point on either side unless you understand what is happening and think you can time it. The whole r/wsb mantra is buy GME and hold to the moon but as the stock rises at some point too many people will sell in mass as they cash out creating a tipping point and then the rest will try to sell as the stock falls like a knife. Good luck trying to time that.

[CroFlames]

Originally Posted by CASe333

So I've googled and reread this a few times. Is it fair to say that a gamma and short squeeze are basically the same thing to us laymans but at different phases of the squeeze? In the case of a gamma squeeze call options are hedged so there is basically doubling down to keep bet going whereas a short squeeze is the outcome of what happens when bet is doubled down on and stock goes up so shorts have to cover their bets?

End of the day there is no way I would put $$ in GME at this point on either side unless you understand what is happening and think you can time it. The whole r/wsb mantra is buy GME and hold to the moon but as the stock rises at some point too many people will sell in mass as they cash out creating a tipping point and then the rest will try to sell as the stock falls like a knife. Good luck trying to time that.

It’s just that, a bet.

When I’m at a casino I don’t view it as investing it’s betting. I set myself a limit then leave.

I know WSB is all about waiting until it’s $420.69 but I sure ain’t. If I double or triple the money on GME I’m out and I’m happy.

BB I view as a legit 3-5 year investment. Maybe longer if some of the prognosticators are correct in the tech they can offer the Amazon’s and Apples of the world.

[manwiches]

A less risky squeeze candidate is BLNK. Charging, EV, and Biden will give the sector a push soon. Nice short float too.

I am sized in fully as of Friday. Biden speech tmw, and could mention job creations in EV/alt energy market.

For this reason too, why I am holding AMCI, CPST, RMO, and QS

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[MJK]

CCIV up 20% pre market, big move...AMCI up 5%