valueinvestor Posted January 23, 2021 Share Posted January 23, 2021 Am I insane or is this person insanely lucky? I don't think this individual had any coherent reasoning to owing the stock when looking through his posts. This person bought these calls a year ago and if it wasn't for COVID, the rise may not have happened. Secondly, I really don't think the size of retail investors are pushing the stock. Maybe kindling but the ones adding the firewood are institutional. Happy this person made money instead losing it. Unless this person saw an out by utilizing his/her influence to get an out - maybe this person's a genius. Maybe this wasn't a large part of this person's net worth. Probably will put a small purchase on short term OTM calls on BB, if these people decide to cash out and put it into BB. Link to comment Share on other sites More sharing options...
capitalg Posted January 23, 2021 Share Posted January 23, 2021 Anyone buying puts here? Link to comment Share on other sites More sharing options...
Castanza Posted January 23, 2021 Share Posted January 23, 2021 Anyone buying puts here? With that IV it looks like it will be tough to make any solid returns. Link to comment Share on other sites More sharing options...
DooDiligence Posted January 23, 2021 Share Posted January 23, 2021 WSBettors giving props to Burry. www.reddit.com/r/wallstreetbets/comments/l386h8/appreciation_post_for_michael_burry/?utm_source=share&utm_medium=web2x&context=3 Link to comment Share on other sites More sharing options...
DooDiligence Posted January 23, 2021 Share Posted January 23, 2021 Hodling to stick it to the man. www.reddit.com/r/stocks/comments/l3067c/the_importance_of_whats_happening_with_gme/?utm_source=share&utm_medium=web2x&context=3 Link to comment Share on other sites More sharing options...
Spekulatius Posted January 23, 2021 Share Posted January 23, 2021 Anyone buying puts here? With that IV it looks like it will be tough to make any solid returns. I looked at puts on GME ( March) and they were barely down on a day when Gamestop rose 70%. At least buying puts doesn’t seem like the way to play this. Link to comment Share on other sites More sharing options...
Spekulatius Posted January 23, 2021 Share Posted January 23, 2021 LOL, good sense of humor: https://twitter.com/financefrat/status/1352698631527276544?s=21 Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 23, 2021 Share Posted January 23, 2021 LOL, good sense of humor: https://twitter.com/financefrat/status/1352698631527276544?s=21 Lol! Link to comment Share on other sites More sharing options...
Gregmal Posted January 23, 2021 Share Posted January 23, 2021 Anyone buying puts here? With that IV it looks like it will be tough to make any solid returns. I looked at puts on GME ( March) and they were barely down on a day when Gamestop rose 70%. At least buying puts doesn’t seem like the way to play this. Its not. People looking at it from a bet up/down perspective I dont think are going to be successful on a repeated or adjusted basis considering how expensive both sides of the market is. March is a little far out for puts, but Ive found selling very short dated out of the money puts on names like this is the best way to capture some easy money. Worst case is what? You get exercised a small position while its still a volatility shit show and you have to trade out of it? Going too far out you run the risk of getting put the stock after the circus has left down and you own a flatlined turdco. No position in GME but Ive loved doing shit like this over the years on stocks like RICK or DDS, FIZZ occasionally as well. Probably a few others that currently escape me. Monetizing volatility is easier than wagering whether or not Bama covers the spread. If you are selling OTM calls I'd want to be going as far out, time wise as possible. So yea, in summary, best way to go about these is to short near dated puts and short long dated calls, in each instance being pretty far OTM. Link to comment Share on other sites More sharing options...
Fly Posted January 23, 2021 Share Posted January 23, 2021 Thoughts on this? Is it really an infinite gamma squeeze happening? Link to comment Share on other sites More sharing options...
Pelagic Posted January 23, 2021 Share Posted January 23, 2021 Thoughts on this? Is it really an infinite gamma squeeze happening? Plausible. Kind of ironic the only way out for MMs is to dump their shares and go naked short on the options in the hopes dumping the shares will drive the price down. My real question is, what stops a big firm from coming in and buying a hundred mil worth of 1/29 options and making this a self fulfilling prophecy? Maybe couple that with vacuuming up whatever shares MMs dump and if you had the liquidity you could almost guarantee a profit. Realistically though there's gotta be some long share holders willing to sell calls for the insane premium they'll receive. If you write calls Monday you can write whatever price you want for them, lord knows MMs will and the WSB crowd has no idea how to value an option at 200%+ IV (does anyone?) they just want in. Imagine saying Gamestop could cause Citadel to go bankrupt three months ago. Wild times. Link to comment Share on other sites More sharing options...
Brice Posted January 23, 2021 Share Posted January 23, 2021 Thoughts on this? Is it really an infinite gamma squeeze happening? The key line is, it'll keep going up "so long as more an[d] more retails buy the GME." Which is something I certainly, and I expect everyone, agrees with. As long as there are more and more buyers of X then the price of X will go up. True everywhere but software? My pet peeve with his post is his repeated insistence that "this has never happened in financial history." He might be correct if "financial history" means "as long as I've been trading" but even my dog is old enough to remember other cases. Link to comment Share on other sites More sharing options...
Mephistopheles Posted January 23, 2021 Share Posted January 23, 2021 Here's my question, why are market makers selling these calls to the buyers if they need to go in and buy stock that is hard to find, in order to hedge their short call positions? What is the benefit of selling these options contracts in the first place if they aren't going to be able to protect themselves with certainty? Do they just sell naked calls blindly hoping all will be good? I guess the option buyers can bid up the call prices to stratospheric levels if they want, but I am having trouble understanding how the MM gets into this perilous position in the first place. Link to comment Share on other sites More sharing options...
Gregmal Posted January 23, 2021 Share Posted January 23, 2021 I mean at some point there will be a market mechanism that resolves the imbalance. I'd pretty much guarantee GME has some folks working over the weekend on a potential offering. Much like VIX 40+, these situations tend to be short lived. Link to comment Share on other sites More sharing options...
Brice Posted January 23, 2021 Share Posted January 23, 2021 why are market makers selling these calls to the buyers . . . What is the benefit of selling these options contracts in the first place Every risk has a price. Simple as that. The entire option complex has really high IVs, that's attractive to option sellers be they MMs, hedgies, or even real money investors who just want to pick up some premium as a side to their SPY. Link to comment Share on other sites More sharing options...
EdWatchesBoxing Posted January 23, 2021 Share Posted January 23, 2021 FWIW, the fintwit options crowd is talking a lot about a gamma squeeze. In general, I do believe a dealer will take on short gamma risk by writing options to institutional clients. I am guessing a MM could also hedge by buying a higher strike/OTM of the money call. I read on wsb that all call strikes are current ITM. If true, lol. I think DFV saw an opportunity of a lifetime. He said it himself when he talked about the extreme asymmetry of this bet on youtube. Good for him. Link to comment Share on other sites More sharing options...
Fly Posted January 24, 2021 Share Posted January 24, 2021 FWIW, the fintwit options crowd is talking a lot about a gamma squeeze. In general, I do believe a dealer will take on short gamma risk by writing options to institutional clients. I am guessing a MM could also hedge by buying a higher strike/OTM of the money call. I read on wsb that all call strikes are current ITM. If true, lol. I think DFV saw an opportunity of a lifetime. He said it himself when he talked about the extreme asymmetry of this bet on youtube. Good for him. Yes, it appears everything available is in the money: https://www.barchart.com/stocks/quotes/GME/options?moneyness=allRows&expiration=2021-01-29-w What prevents a new $70/80/90+ strike price from being offered in a given expiration? Link to comment Share on other sites More sharing options...
Castanza Posted January 24, 2021 Share Posted January 24, 2021 Seems like a pretty crazy situation. Thoughts on how this plays out? Link to comment Share on other sites More sharing options...
EdWatchesBoxing Posted January 24, 2021 Share Posted January 24, 2021 FWIW, the fintwit options crowd is talking a lot about a gamma squeeze. In general, I do believe a dealer will take on short gamma risk by writing options to institutional clients. I am guessing a MM could also hedge by buying a higher strike/OTM of the money call. I read on wsb that all call strikes are current ITM. If true, lol. I think DFV saw an opportunity of a lifetime. He said it himself when he talked about the extreme asymmetry of this bet on youtube. Good for him. Yes, it appears everything available is in the money: https://www.barchart.com/stocks/quotes/GME/options?moneyness=allRows&expiration=2021-01-29-w What prevents a new $70/80/90+ strike price from being offered in a given expiration? https://www.cboe.com/exchange_traded_stock/equity_options_spec/ Should be new strikes on Monday. I imagine the market makers would be driving/requesting this, but I don't really know. Seems like a pretty crazy situation. Thoughts on how this plays out? https://www.ivolatility.com/options/GME/NYSE/ What a melt up situation! With Implied vol @ their highs, it is an uphill battle for the wsb gang, especially the late comers buy calls next week. At these levels, realized vol should drop which MM's will be making money on. It's going to be a crazy ride. WSB gang will likely buy these new calls regardless of the greeks. Will be interesting to see how this plays out. Would also be interesting to know if there's anyone with actual option MM experience on this board. Link to comment Share on other sites More sharing options...
EdWatchesBoxing Posted January 24, 2021 Share Posted January 24, 2021 https://nope-its-lily.medium.com/gamestop-power-to-the-market-players-part-1-d8863f2f8604 Link to comment Share on other sites More sharing options...
Spekulatius Posted January 24, 2021 Share Posted January 24, 2021 In the end, this is a Snowball so all that matter is if the snowball gets bigger (more people and capital sucked in) or smaller (capital moves out). By definition, not everyone can be profitable and as a whole, this locust swarm will get decimated because in the end, GME just isn’t worth $60/ share just as Kodak wasn’t worth $40 (or what ever the peak was). It is always important to keep in mind, that feedback loops work just as well in reverse as they work on the way up. They work perhaps even better in reverse because fear is stronger than greed once it kicks in. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 24, 2021 Share Posted January 24, 2021 Thoughts on this? Is it really an infinite gamma squeeze happening? I actually buy the argument that what we've witnessed so far IS a gamma squeeze. There's been no appreciable drop in shares short from what I can tell (would love anyone with access to a BB terminal to confirm). So either every short that was covered, new shirts have stepped in OR it's been retail buyers flooding the stock/options to drive it higher which results in a gamma squeeze which forces the stock even higher which forced more retail to buy stock/options and so on. I doubt that they could trigger an "infinite gamma" squeeze - but could retail continue to push this higher in the near term with additional share and options purchases? Yes. Does the fact that we're out of options strikes mean that this goes in forever? Or is about to exhaust itself because retail investors can no longer to force the market's hand with hundreds of times leverage and will have to put up real cash to enter positions? My vote is on the latter. And this is exactly how people lose more on the way down than in the way up. Their first positions were probably in calls that cost pennies and it worked. Now they're all about to flood calls that cost $5+/share which will be the last hurrah. Link to comment Share on other sites More sharing options...
formthirteen Posted January 25, 2021 Share Posted January 25, 2021 https://nope-its-lily.medium.com/gamestop-power-to-the-market-players-part-1-d8863f2f8604 Thanks. It's interesting to follow Burry's "Big Long" from the sidelines and this article did quite a good job of explaining how it's possible for the Short % of Float (Dec 30, 2020) to be 260.91% and Short % of Shares Outstanding (Dec 30, 2020) 102.08% even though naked short selling is "illegal". Keeping track of shorted and borrowed shares is also a problem and could be exploited: Despite being made illegal after the 2008–09 financial crisis, naked shorting continues to happen because of loopholes in rules and discrepancies between paper and electronic trading systems. https://www.investopedia.com/terms/n/nakedshorting.asp The thundering herd of social media clowns is a problem for both governments and Wall Street or anyone else that is relying on the status quo, brands for example. Link to comment Share on other sites More sharing options...
ratiman Posted January 25, 2021 Share Posted January 25, 2021 This is hilarious. I can't wait for the WSB documentary where they're all driving Lambos but still living with their parents. Link to comment Share on other sites More sharing options...
Gregmal Posted January 25, 2021 Share Posted January 25, 2021 91 pre market Link to comment Share on other sites More sharing options...
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