The Investment Thread (11 Viewers)

[superchuck500]

Another thing I can’t explain. In mid March someone bought millions of short term call options at $800 for GME.

The theory on that one is it was Hedge Funds

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I sort of understand some of that (but still not most of it) - but I don't see how anyone can do anything with buying 173K calls on June 3 with a June 4 expiry and a strike price at 3x share price other than be betting on a big jump. If the idea is derivative value, I would think you would need some bit of time to make those dynamics work - not just one freakin' day.

I don't think it's a coincidence that $145 is the highest strike on the main platform chains (I don't know enough about whether higher strike price is available but those are the ones that display). And you make money on the option price not the strike, so as long as the option price is going up, you make money if you sell . . . it doesn't mean they think the stock will trade at $145, it just means that they think its going to go up enough that some trader out there thinks $145 is possible or at least possible enough to get another buyer as the day moves on.

But it just seems like huge gamble ($2.1 million to be exact) that there will even be a buyer - unless there really is a very big jump in the share price (without a buyer, your call is worth dick unless you plan on holding those shares you have the right to buy at a massive premium). To have $2M worth of confidence in that without knowledge of something seems unrealistic - but it's amazing how much leeway some of these spec traders have (b/c the payouts on the rare times they come through are enough to support all the times they don't).

Or maybe they do plan on exercising and buying those shares to then contract to short? But why $145?

 

[St. Geezy]

They're aggressively hedging (irony, right?) their forked up bets, I would think.

Yeah...setting themselves up to mitigate some losses by buying long shares and calls to ride the wave up on their own blunder.

 

[St. Geezy]

I sort of understand some of that (but still not most of it) - but I don't see how anyone can do anything with buying 173K calls on June 3 with a June 4 expiry and a strike price at 3x share price other than be betting on a big jump. If the idea is derivative value, I would think you would need some bit of time to make those dynamics work - not just one freakin' day.

I don't think it's a coincidence that $145 is the highest strike on the main platform chains (I don't know enough about whether higher strike price is available but those are the ones that display). And you make money on the option price not the strike, so as long as the option price is going up, you make money if you sell . . . it doesn't mean they think the stock will trade at $145, it just means that they think its going to go up enough that some trader out there thinks $145 is possible or at least possible enough to get another buyer as the day moves on.

But it just seems like huge gamble ($2.1 million to be exact) that there will even be a buyer - unless there really is a very big jump in the share price (without a buyer, your call is worth dick unless you plan on holding those shares you have the right to buy at a massive premium). To have $2M worth of confidence in that without knowledge of something seems unrealistic - but it's amazing how much leeway some of these spec traders have (b/c the payouts on the rare times they come through are enough to support all the times they don't).

Maybe they're banking on upward momentum increasing the value on them, knowing full well they will eventually be selling worthless contracts at some point in the day?

Interesting you mention the $145 strikes being the limit...I did find it curious that on this past Sunday, the highest strike price was $73, and when we had our big run up on Tuesday, the high was $71.56 and I don't think we ever went much further beyond that during this week, so you may be onto something there.

Perhaps next week's number is $145?

 

[superchuck500]

Maybe they're banking on upward momentum increasing the value on them, knowing full well they will eventually be selling worthless contracts at some point in the day?

Theoretically I suppose, but sell to whom? Who's going to buy at $145 June 4 call at 2pm on June 4 when the stock is $55? Or even $75.

It's like when Charlie Kirk said sea-level rise wasn't really that worrisome for coastal residents because if it gets bad, they could always just sell their houses and move inland. Who's buying that?

 

[Saint_Ward]

Theoretically I suppose, but sell to whom? Who's going to buy at $145 June 4 call at 2pm on June 4 when the stock is $55? Or even $75.

It's like when Charlie Kirk said sea-level rise wasn't really that worrisome for coastal residents because if it gets bad, they could always just sell their houses and move inland. Who's buying that?

Stupid people. Always count on some stupid people.

 

[Saint_Ward]

I'm not sure it's a record high, since about two years ago, I don't recall what the in day high was, but HEI is in that very small ball park now.

I'm a long hauler (for obvious reasons), and I know a few of you bought in a long while back. Not sure if any of you sold off, or bought on the dip, but nice steady gains.

 

[St. Geezy]

Another day where crypto tanks overnight, and it coincides with steady upward rises in the share prices of the main two so-called "meme stocks."

 

[St. Geezy]

Theoretically I suppose, but sell to whom? Who's going to buy at $145 June 4 call at 2pm on June 4 when the stock is $55? Or even $75.

It's like when Charlie Kirk said sea-level rise wasn't really that worrisome for coastal residents because if it gets bad, they could always just sell their houses and move inland. Who's buying that?

Not at 2:00 pm. My theory implied they'd run the price high early in the morning, sell the contracts by mid-morning, then tank the price in the afternoon. Doesn't seem to be going that way though.

It's actually been a pretty flat day overall, trading within the same channel. It does seem to be trying to move up at the moment, though it could just be a bull trap being setup for lunch hour, something we have seen a lot of over the past few months.

 

[DaveXA]

Another day where crypto tanks overnight, and it coincides with steady upward rises in the share prices of the main two so-called "meme stocks."

Yeah, feels like your typical sector rotation of assets.

 

[St. Geezy]

Stupid people. Always count on some stupid people.

Yep...there is a reason they refer to retail as "Dumb Money." They get many to believe any information they put out. So many people don't realize just how scripted this game is on a day to day basis and/or who to trust or not trust.

 

[St. Geezy]

Yeah, feels like your typical sector rotation of assets.

It's amazing. I posted about this several weeks back (or maybe I just pointed it out to friends; can't remember), but it has become predictable, like clockwork. If you see a huge dip in Bitcoin, you know good things are coming to AMC within the next 1 or 2 trading sessions. The charts for the past five months reflect this in near-perfect harmony.

I think there is a reason we saw Bitcoin spike hard upwardly in December/January too, it's because they knew they were preparing it for this current war by pumping it, knowing they were essentially making it more attractive simply to enable them to take what amounts to "donations" from people.

 

[DaveXA]

It's amazing. I posted about this several weeks back (or maybe I just pointed it out to friends; can't remember), but it has become predictable, like clockwork. If you see a huge dip in Bitcoin, you know good things are coming to AMC within the next 1 or 2 trading sessions. The charts for the past five months reflect this in near-perfect harmony.

I think there is a reason we saw Bitcoin spike hard upwardly in December/January too, it's because they knew they were preparing it for this current war by pumping it, knowing they were essentially making it more attractive simply to enable them to take what amounts to "donations" from people.

Yep, it's generally the same group of people moving around like a herd of sheep to the next thing, but the next thing options are moving from bitcoin to meme stocks or vice versa. It's a pretty narrow view, but when you have traders/investors looking at two main options, this is what you get. That may change with the next new meme trend at some point, but what it is now is pretty predictable. Might as well strike the iron while it's hot.

 

[St. Geezy]

Yep, it's generally the same group of people moving around like a herd of sheep to the next thing, but the next thing options are moving from bitcoin to meme stocks or vice versa. It's a pretty narrow view, but when you have traders/investors looking at two main options, this is what you get. That may change with the next new meme trend at some point, but what it is now is pretty predictable. Might as well strike the iron while it's hot.

Yeah, once this play is over, I definitely plan to go back to regular ol' traditional diversification and being happy with the 8% to 10% annual rises - blue chip stocks, stocks spread across multiple sectors, real estate, etc...with a very very small kitty set aside for roll-the-dice type bets.

The only reason my risk factor meter is turned up to the max currently is because I came to the conclusion that the only way to have a chance to get to the next level with this would be to acquire the start-up capital with riskier but well-calculated moves, and thus far, since January (with OCGN, AABB, and XSPA being the big early wins to get me to this stage with AMC), it's worked.

 

[Turfie]

Completely natural movement on AMC and GME at exactly 3 pm EST. Either every day trader decided to sell at that exact moment in unison. Or hedges shorted aggressively again to push it down before power hour.

 

[DaveXA]

Completely natural movement on AMC and GME at exactly 3 pm EST. Either every day trader decided to sell at that exact moment in unison. Or hedges shorted aggressively again to push it down before power hour.

Predictable, really.