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  • My Not So Short Story on GME


    Eastwood

     

      

    On 1/25/2021 at 10:18 AM, Storm the Field said:

    GME at 9:10 $88.60

    9:50 $144.42

    10:10 $88.09

    What in the hell was that all about?

     

    On 1/25/2021 at 10:38 AM, Eastwood said:

    I'll post a recap of everything when the dust settles on this. It's been an interesting ride and it has caused me some concerns over contagion in the broader market.

    I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the length because this post is me spiking the football and other than banter about the moves GME makes in the future, this is the last time I ever dig into the fundamentals of the GME trade.

    What we saw today was covering either due to what is called a gamma squeeze or a short squeeze. Maybe a mix of both. We won't really know until later, possibly at the end of close Wednesday when brokerages like TD update their short interest. A gamma squeeze occurs as the price moves up, crossing the thresholds of strike prices of calls that will soon be expiring. Market Makers use the Delta of an option to determine how many shares of a stock they should purchase in preparation of possibly covering the calls when they are exercised, either by the buyer of the call or upon expiring in the money. As the share price goes up, combined with the days getting closer to expiry, up goes the Delta, up goes the amount of shares the MMs buy. Last Friday, every call on the board for GME was in the money at expiry. I'll repeat: EVERY CALL ON THE BOARD WAS ITM AT EXPIRY. I don't know if that's ever happened in the history of the market. That means that if every call was exercised, 11.7 million shares would need to be transferred over to the new owners today and tomorrow. Now, as the Delta on a lot of the lower strikes were already at 1 and the shares already (hopefully for the call seller) purchased, it shouldn't be a big deal. However, the big pop happened ON Friday, not before. That caused a mad scramble in the after hours Friday, today, and possibly tomorrow for those who are gambling on the price decreasing further before they fill those calls. So, that's a gamma squeeze. Price creeps up, MMs who sell calls end up buying shares to cover, causing the price to climb higher, and then creating essentially a feedback loop spiking the price when combined with buying from retail or pops on positive news.

    What is happening, and may continue to happen, is the result of hedge funds and possibly Bank of America rampantly shorting GME over the course of a year hoping that it goes zero and they then get to pocket everything and give nothing back. The short float on December 31st was 140% and the institutional ownership was 117%. But how is such a thing possible? They borrowed shares to either 1.) sell, never intending to buy them back and return them because they were hell bent on bankrupting GME, or 2.) lent out those already borrowed shares that they never intended to give back anyway to collect the premium, creating a borrowed share of a borrowed share. They would also buy dips incrementally, amassing large positions, sell calls and buy puts with a quick expiry, then dump all of the shares they accumulated at once while simultaneously shorting to tank the price and pocket the premiums on the options they bought and sold. Then, when that wasn't enough, they sold naked shorts. They sold shares they didn't even have or even exist. They injected "synthetic shares" into the market. Synthetic, fugazi, fogazi. It's a wazi, it's a woozi. They're fairy dust. They don't exist. They're not fucking real.

    ispWN9.gif

    But the people and institutional investors they sold them to bought the right to own the shares. And those banks and hedge funds are obligated to deliver them. But now there aren't enough shares to go around. There's an infinite demand for shares, but a finite supply. In a total share recall event, the lenders of the shorted shares could recall every share on borrow and still be 21 MILLION shares short of demand. The banks and hedge funds that created that SHOULD be on the hook. It SHOULD be illegal. Think of how depressed the price was because of it. Think of the loss of market cap, which led to lowered credit ratings, which led to higher interest rates and less borrowing power, and the layoffs and store closures that followed. Awful. The price should go to infinity because the demand the banks and hedge funds created will become infinity.

    Boomers can bitch and moan about RH and college kids dumping their stimmy into GME all they want, but the reality is that a bunch of boomer bankers and hedge funds created a situation that should be legally, economically, and financially impossible. Boomers want to call what retail investors are doing "market manipulation." However, anyone who dug into the situation enough saw the writing on the wall. Honest to goodness due diligence combined with simple supply/demand economics combined with paying attention to the new market trend of retail investors told anyone interested all they needed to know.

    This was me back in September:

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    I know for the bulk of you guys in here that it is too much of a leap of faith to go long on GME, but there is profit to be made on it in the last quarter, being console launch and holiday season. Especially if it hits $10 and the Robinhood millionaires show up. Even more so if another round of direct stimulus is announced.

    The price hadn't even hit $10, yet, when I said that. The house of cards had already been built. A fan had been placed in front of it. And everyone told me that I was crazy for thinking the house of cards would fall over. It wasn't a secret. It was in plain fucking sight. And we are finding out it is everywhere. Wall Street and old guys in banking and finance can harumph all they want about how a bunch of dumb wage earners are gaming their system to make a buck, but I think the reality is that the curtain has started getting pulled back on Old Man Oz. Take me, for example. I've given a detailed breakdown and have proof in this very thread that I had produced this investment thesis MONTHS before it was mainstream and materialized. I gave my credentials above. Want to know how long I've been actively investing? Since March. Same as all the Robinhood punks. All it takes for a large chunk of the population to be competent in anything is 1. Time 2. Education/training, and 3. Financial resources. In March, there was the perfect storm of 1. COVID lockdowns, 2. The internet and educational resources on the various trading platforms, and 3. Stimulus - The ultimate Other People's Money. Millions of $3k hedge funds popped up all over the nation and had the time, education, and money to be just dangerous enough. I traded in a paper account on Think Or Swim for 30 days and was then off to the races. I developed a momentum trading strategy where I combined candlestick patterns, moving average patterns, the RSI, and the Elliot Wave. Not only that, I also voraciously consumed anything I could get my hands on about market history, valuations, and trends. I bought and sold stocks, bought options, and sold covered calls and generated a 10% return over the course of about a month. Then I stumbled on GME, halted all active trading, liquidated any outstanding options, sat on my KO, XOM, and PFE (which was my worst trade) shares and positioned myself into GME. My return is now over 1000%. Either I'm some kind of wonder boy who picked all this up quickly because I'm a high functioning autistic person...

    SparklingOfficialAtlasmoth-max-1mb.gif

    Or maybe this shit just ain't as hard as Wall Street wants us to think it is. And maybe Wall Street was so habitually comfortable with how little people knew about their industry in the past that they didn't even bother concealing their moves because they didn't think retail investors would know how to play the other side. Well, the secret's out. This new batch of retail investors spent the last decade learning how to min/max various economic systems in video games. They are accustomed to dumping hours of time learning how to maximize returns on digital assets. They went from watching hours of YouTube videos on how to mine diamonds and make a Fortune 3 pick axe in Minecraft to watching hours of how to turn a couple grand into 5 figures. In some cases, 6 or 7 figures.

    As I stated earlier, I sold half of my position in GME today, but I still firmly believe in the trade I executed. I am now concerned about two things, one being specific to GME. I think the invisible hand of the free market is about to get absolutely doomfisted by either the government or big banks. I think a lot of institutions out there are shook. When GME hit $150 and other short squeezes were popping, a huge market sell-off occurred. I think funds were liquidating to cover their losses because margin calls were going out. In GME alone today, short sellers lost $1.6 billion according to Business Insider. Melvin Capital, supposedly the biggest short seller of GME out there, is down a whopping 30% for 2021, so far. They manage billions. We learned in 2008 that these banks and funds actually interweave into a structural support for the entire financial system. If a multi-billion dollar part of that support structure fails, it increases the strain on the others, and then another fails, and then we have a cascade failure. I think GME and the big shorts come together and negotiate a share purchase of newly issued shares under the condition that they are immediately transferred to the rightful owners to get the short float below 100%. This is actually extremely bullish for GME. They erase their remaining debt, buy out of all of their bad leases, and increase their cash long enough for the turn around. That's why I only sold half of my position. I'm long GME. In Ryan Cohen I trust. But I also think the government steps in and does something to try to fix the rest of the market. As history has shown us, this doesn't mean punishing the banks who created the situation in the first place. No, they're going to increase the regulations on the retail investors. That could also have grave, unintended consequences when retail cashes out all at once.

    So, I feel really good about today, but there may be grave consequences in future. I'll end with the cringiest thing possible: be a retail trader who uses a scene from The Big Short in one of his posts.

     

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    The fact that gme only had 15m in volume while amc had almost 800m and bb 340m should be very telling....they let all these other "meme" stocks pop because its manageable to them.

    Now if my belief is true(hunch) that someone started covering today(forced or cave??) Then we hopefully see dominoes start falling

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    Just now, Bone3421 said:

    The fact that gme only had 15m in volume while amc had almost 800m and bb 340m should be very telling....they let all these other "meme" stocks pop because its manageable to them.

    Now if my belief is true(hunch) that someone was started covering today(forced or cave??) Then we hopefully see dominoes start falling

    Shareholders meeting is rocket fuel IMO

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    On 6/2/2021 at 8:29 PM, Eastwood said:

    My whopping one whole share that I bought at $190 coming back into my portfolio:

    tenor.gif

    That dude has been my hero since I first saw the clip years ago.  That is a man that’s confident in his lifestyle. 

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    I have a question for you GME/AMC diamond apes...

     

    I've seen people (mostly on other sites) claiming they are holding until ridiculous prices like $500K.  Assuming these hedge funds start getting margin called and forced to cover their positions and the price skyrockets, isn't there a price point where the hedge funds don't have the money to cover the positions?  If they are short tens of thousands of shares, where do they come up with the capital to cover if the prices hits $10K, $50K, $100K, etc.?  What happens then?

     

    Next question, if all the short positions are forced to cover and the price does shoot up to $500K, how do the retail holders cash out?  Every transaction needs 2 sides, and who is paying $500K for a single share of a company not currently turning a profit?  Isn't the smart move to sell some shares on the way up, and not hold out for an astronomical price point like $500K?

     

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    11 minutes ago, Angry Gorilla said:

    I have a question for you GME/AMC diamond apes...

     

    I've seen people (mostly on other sites) claiming they are holding until ridiculous prices like $500K.  Assuming these hedge funds start getting margin called and forced to cover their positions and the price skyrockets, isn't there a price point where the hedge funds don't have the money to cover the positions?  If they are short tens of thousands of shares, where do they come up with the capital to cover if the prices hits $10K, $50K, $100K, etc.?  What happens then?

     

    Next question, if all the short positions are forced to cover and the price does shoot up to $500K, how do the retail holders cash out?  Every transaction needs 2 sides, and who is paying $500K for a single share of a company not currently turning a profit?  Isn't the smart move to sell some shares on the way up, and not hold out for an astronomical price point like $500K?

    It creates market havoc; see Archegos hedge fund collapse circa March 2021. In the end, if the fund runs out of money to cover the short, then the brokers/banks that lent them the shares are on the hook to replace the shares that were shorted but that their customer was not able to cover.

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    I have a question for you GME/AMC diamond apes...
     
    I've seen people (mostly on other sites) claiming they are holding until ridiculous prices like $500K.  Assuming these hedge funds start getting margin called and forced to cover their positions and the price skyrockets, isn't there a price point where the hedge funds don't have the money to cover the positions?  If they are short tens of thousands of shares, where do they come up with the capital to cover if the prices hits $10K, $50K, $100K, etc.?  What happens then?
     
    Next question, if all the short positions are forced to cover and the price does shoot up to $500K, how do the retail holders cash out?  Every transaction needs 2 sides, and who is paying $500K for a single share of a company not currently turning a profit?  Isn't the smart move to sell some shares on the way up, and not hold out for an astronomical price point like $500K?
     
    Well first of all for the 2nd point...a short position has to be closed at some point. That's why squeezes work, a short is obligated to buy shares to close position.

    For the first point.. Berkshire trades at 434k currently, there is plenty of money in the market to cover.
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    3 minutes ago, Bone3421 said:

    Well first of all for the 2nd point...a short position has to be closed at some point. That's why squeezes work, a short is obligated to buy shares to close position.

    For the first point.. Berkshire trades at 434k currently, there is plenty of money in the market to cover.

    How do the people that don't sell before the last short position covers cash out?

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    How do the people that don't sell before the last short position covers cash out?
    That would be problematic but you would have to be dumb to be in that spot. If you read up on other squeezes(Volkswagen, overstock,etc) you will see it's not a quick event. So you should be able to sell close to the peak, hopefully.

    We will know more after votes are announced in a week or so. Will give idea to how many shorts are still floating around out there
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    1 hour ago, Angry Gorilla said:

    I have a question for you GME/AMC diamond apes...

     

    I've seen people (mostly on other sites) claiming they are holding until ridiculous prices like $500K.  Assuming these hedge funds start getting margin called and forced to cover their positions and the price skyrockets, isn't there a price point where the hedge funds don't have the money to cover the positions?  If they are short tens of thousands of shares, where do they come up with the capital to cover if the prices hits $10K, $50K, $100K, etc.?  What happens then?

     

    Next question, if all the short positions are forced to cover and the price does shoot up to $500K, how do the retail holders cash out?  Every transaction needs 2 sides, and who is paying $500K for a single share of a company not currently turning a profit?  Isn't the smart move to sell some shares on the way up, and not hold out for an astronomical price point like $500K?

     

    Market chaos happens a lot sooner than $500k. I think somewhere around $9k a share would put GME worth of the actual shares issued at half a trillion dollars. With the way the stock was shorted, almost the entirety of that half a trillion would be shorted shares. That half a trillion shortfall would cause so much liquidation that a huge selloff would occur, triggering all kinds of other events like stop-losses, algorithms reacting, margin calls that have nothing to do with GME, and so on. When GME tickled $500 a share, the market had a brief 15-30 minute selloff. It didn't recover until after the halts on buying started being implemented, which crashed the price through panic selling. I believe that we saw market support shuddering under the coming weight of a runaway price spike and the effects it would have on the market as a whole.

    The situation is still very perilous. I've said several times that I don't know how they could possibly ever unwind this situation without paying GME directly to issue enough shares. My concern is that it will be taxpayers that have to do it, when in reality, hedge funds and other financial institutions defrauded the system to create this situation and directly harmed GME in the process. But those with the power to fix the situation really have just decided to look the other way while others continue to operate around it clueless as to the true possible fallout. It's the financial equivalent of the Beirut explosion.

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    15 hours ago, Angry Gorilla said:

    I've seen people (mostly on other sites) claiming they are holding until ridiculous prices like $500K.  Assuming these hedge funds start getting margin called and forced to cover their positions and the price skyrockets, isn't there a price point where the hedge funds don't have the money to cover the positions?  If they are short tens of thousands of shares, where do they come up with the capital to cover if the prices hits $10K, $50K, $100K, etc.?  What happens then?

     

    Next question, if all the short positions are forced to cover and the price does shoot up to $500K, how do the retail holders cash out?  Every transaction needs 2 sides, and who is paying $500K for a single share of a company not currently turning a profit?  Isn't the smart move to sell some shares on the way up, and not hold out for an astronomical price point like $500K?

    1. that's the hedge fund's (prime) brokerage's problem to worry.  at some point, they will liquidate their clients to prevent further catastrophe.  it happened with archegos capital.

     

    2. we've already seen it play out on GME twice, and with now-recent many many other short squeezes - at some point, people start jumping off the ship to take profits.  further, not all of the price action is due to speculators buying up shares.  MUCH of the buying is by the counterparty of options contract (=market makers) buying long shares to hedge their short calls.  as the people sell their calls for profit AND/OR as the calls decay time value, the market makers will start to sell their long shares because to reduce their hedge.   

    this selling action can also move price down and catalyze retail stock holders to sell to lock in their gains.  will also trigger stop losses and etc.

     

    the zoomed out view is not that these stocks can ramp up interminably... the zoomed out view is that these stocks move very violently due to all these reflexive mechanics

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    $300 seems to be the magic number for now. 

    i'm under no illusions of $500k, but $500 should not be too far out of order, imo.

    i bought at $252, so i'm just happy to see it back above that level. i ain't getting rich on this, it's just kind of a surreal kind of fun.

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    $300 seems to be the magic number for now. 
    i'm under no illusions of $500k, but $500 should not be too far out of order, imo.
    i bought at $252, so i'm just happy to see it back above that level. i ain't getting rich on this, it's just kind of a surreal kind of fun.
    500, pfft....once the 8k comes out and we see the votes we'll find out how high this goes
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    https://news.gamestop.com/node/18956/html
    image.png.2e3e1d3edea5c56308c8ce35a97dceba.png
    was the popular theory that there would be more votes then official  shares outstanding? 
    That was the theory being thrown around...so not the best news for that. I'm on free shares so I'll hold a bit longer and see what happens.

    If it drops to far guess I'll be stuck with shares until the transformation is complete and it takes off
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    55 minutes ago, Bone3421 said:

    That was the theory being thrown around...so not the best news for that. I'm on free shares so I'll hold a bit longer and see what happens.

    If it drops to far guess I'll be stuck with shares until the transformation is complete and it takes off

    Well, my guess is there will immediately be a host of WSB theories to explain away the vote tally, along with a few new theories to keep the fish on the hook. Its why I mentioned the comparison to Q earlier in the thread. There are simply too many unsophisticated investors that are deeply emotionally and financially invested in this idea of spectacular GME riches on the horizon. Not much will change their minds at this point.  Unsophisticated in the “retail” sense, with access to far less capital, information, and connections than wall street.

    And just like there’s plenty of money to be made manipulating people who desperately want a different political reality, there’s plenty of money to be made to be made manipulating the price between $100 and $300 now that the stock has captured the fancy of the reddit crowd. If you can figure out who’s pulling the strings, you can make money right along with them. But “them” isn’t the masses HODLing on reddit.  

    The only thing I know for sure is that it’s CURRENTLY a shit company that is wildly overvalued, but also heavily manipulated. Can mgmt turn it around in a few years? Sure, won’t be easy, but its possible. Nothing else about this makes much sense to me, so I sit on the sidelines until I can figure out an angle. I have no skin in this game but find it to be a fascinating case study on herd behavior.

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    Well, my guess is there will immediately be a host of WSB theories to explain away the vote tally, along with a few new theories to keep the fish on the hook. Its why I mentioned the comparison to Q earlier in the thread. There are simply too many unsophisticated investors that are deeply emotionally and financially invested in this idea of spectacular GME riches on the horizon. Not much will change their minds at this point.  Unsophisticated in the “retail” sense, with access to far less capital, information, and connections than wall street.
    And just like there’s plenty of money to be made manipulating people who desperately want a different political reality, there’s plenty of money to be made to be made manipulating the price between $100 and $300 now that the stock has captured the fancy of the reddit crowd. If you can figure out who’s pulling the strings, you can make money right along with them. But “them” isn’t the masses HODLing on reddit.  
    The only thing I know for sure is that it’s CURRENTLY a shit company that is wildly overvalued, but also heavily manipulated. Can mgmt turn it around in a few years? Sure, won’t be easy, but its possible. Nothing else about this makes much sense to me, so I sit on the sidelines until I can figure out an angle. I have no skin in this game but find it to be a fascinating case study on herd behavior.


    I would say the "currently shit company" is not accurate. They paid off debt, refreshed board with top talent from Amazon,chewy and announced new CEO and CFO. I would say currently they are looking pretty strong.
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    52 minutes ago, Bone3421 said:


     

     


    I would say the "currently shit company" is not accurate. They paid off debt, refreshed board with top talent from Amazon,chewy and announced new CEO and CFO. I would say currently they are looking pretty strong.

     

    Relative to market cap, I should say. 5 yrs ago, GME did twice what they do today  in sales and actually made money. Now they lose plenty of money and need to completely revamp their entire business to remain relevant. Yet their market cap is 10X what it was 5 years ago. There is no way to justify their current market cap as a retail operation. Its just market fuckery, which will have to last for years until they create a new identity. 

    On average, successful retail stocks typically trade at 1X sales. GME is currently trading at about 5X sales. They are basically priced today as if they have already turned the business around completely  and conduct 100% of sales online. But they don't. I remember when JCP hired the apple retail chief as CEO to turn around their business....it didn’t go well. Just hiring new people doesn’t mean shit. Maybe Chewy and friends succeed, maybe they don’t. 

     

     

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    1 hour ago, Blotto said:

    Relative to market cap, I should say. 5 yrs ago, GME did twice what they do today  in sales and actually made money. Now they lose plenty of money and need to completely revamp their entire business to remain relevant. Yet their market cap is 10X what it was 5 years ago. There is no way to justify their current market cap as a retail operation. Its just market fuckery, which will have to last for years until they create a new identity. 

    On average, successful retail stocks typically trade at 1X sales. GME is currently trading at about 5X sales. They are basically priced today as if they have already turned the business around completely  and conduct 100% of sales online. But they don't. I remember when JCP hired the apple retail chief as CEO to turn around their business....it didn’t go well. Just hiring new people doesn’t mean shit. Maybe Chewy and friends succeed, maybe they don’t. 

    It seems to me that the better comparable is that they are being valued like they are a start-up, and everyone is hoping that the "new" business model really dazzles and attracts VC, hedgies or a buy-out. 
    I gave up on believing in an efficient market theory years ago; the market is irrational and can stay that way for a very long time

     

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    On 6/8/2021 at 1:15 PM, Angry Gorilla said:

    Next question, if all the short positions are forced to cover and the price does shoot up to $500K, how do the retail holders cash out?  Every transaction needs 2 sides, and who is paying $500K for a single share of a company not currently turning a profit?  

     

    I think all other parts of your post have been addressed except this one. Yes, every transaction needs two sides. The price doesn't just go from $300 to $500K instantly. Somebody is purchasing them on the way up. That's why it goes up. It doesn't come down until there are no buyers willing to pay the $500K (or whatever it peaks at). In the case of shorts, eventually they don't have a choice. Somebody has to cover them. If the HF goes tits up, somebody else covers them. That's as far as my knowledge goes though. I have no idea what happens if everybody in the chain goes bankrupt, but I assume insurance and/or bailouts eventually come in to play.

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    Dangit. I'd sold a handful of GME the other day at $310, which covered my initial investment leaving me with house money on my last 15 shares. Had buy orders in at $206 (with all the money I'd pocketed with the sales at $310) and woulda gotten a few free shares out of the swing. Looks like I missed the bottom of this dip by $5. So close!

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    3 hours ago, Angry Gorilla said:

    Thanks for the explanation.  I meant more when all the shorts are covered and there are no more forced covers.  

    That's when the price would begin settling back to a proper valuation because there won't be many willing to buy at that price (other than FOMO, but that only lasts so long). 

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    1 hour ago, SquishMitten said:

    If i had a time machine, I would've gone back much farther than yesterday

    If I had a time machine and went back to when I first discovered this in May '20 and dumped all that I could have safely parted with into April 16 2021 options, I would have netted $3.5 million.

    I think it has more to drop before it finds level. It's still losing momentum, a bunch of bearish candlestick patterns, still hasn't dropped to the 50 day moving average, and there aren't many supports left on the chart between here and the 100s. We'll see, though. As long as the short interest is what it is, the stock will act outside of the traditional market analysis tools.

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    Price today $166, TTM revenue  $5.35B (May 21)

    Price one year ago $4, TTM revenue  $5.95B (May 20)

    everywhere i look shows short interest of roughly 13%. 

    I DON'T GET IT - Tom Hanks - I Dont Get It - quickmeme

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    check out this trade on AMC, using Nov 19th expiring options:  Buy 50-strike put + Sell 45-strike put.

    pricing right now at 3.50 per contract = $350 deduction from your account.  max loss is losing the entire $350.  max profit is $150. 

     

    here is a plot of profit-loss curve at the expiration date in November, with stock price in X.  stock price at 46.50 your position is breakeven.  below 45 you get the max gain.  above 50 is max loss.

    image.thumb.png.f8aa4861f8d4478f857293a5110b81e8.png

     

    this is the profit-loss curve at an arbitrary time -- i set for next month at September 24th.  e.g. at stock price 38, your position is +$25  (which you'd rather ride until November).

    by the way, if you change the volatility parameter, the slope of this curve will change, but not by very much

    image.thumb.png.1cab2633f57b8e5934b486e8a1ac06e3.png

     

    AMC has been in a range of $30-40 for most of recent months, after slowly deflating from the squeeze

    image.png.23f5b43381bd3507023a8120446f1ec4.png

     

     

    basically, for a $350 expenditure, you have a good chance of turning a %50 profit by november, and your total risk is capped to that $350.  no margin calls.

     

    you could also drag out the expiration to December 17th and the play is largely the same.  could tweak the strikes if its your fancy.  long 55P short 50P costs $365 for max gain $135

     

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    check out this trade on AMC, using Nov 19th expiring options:  Buy 50-strike put + Sell 45-strike put.
    pricing right now at 3.50 per contract = $350 deduction from your account.  max loss is losing the entire $350.  max profit is $150. 
     
    here is a plot of profit-loss curve at the expiration date in November, with stock price in X.  stock price at 46.50 your position is breakeven.  below 45 you get the max gain.  above 50 is max loss.
    image.thumb.png.f8aa4861f8d4478f857293a5110b81e8.png
     
    this is the profit-loss curve at an arbitrary time -- i set for next month at September 24th.  e.g. at stock price 38, your position is +$25  (which you'd rather ride until November).
    by the way, if you change the volatility parameter, the slope of this curve will change, but not by very much
    image.thumb.png.1cab2633f57b8e5934b486e8a1ac06e3.png
     
    AMC has been in a range of $30-40 for most of recent months, after slowly deflating from the squeeze
    image.png.23f5b43381bd3507023a8120446f1ec4.png
     
     
    basically, for a $350 expenditure, you have a good chance of turning a %50 profit by november, and your total risk is capped to that $350.  no margin calls.
     
    you could also drag out the expiration to December 17th and the play is largely the same.  could tweak the strikes if its your fancy.  long 55P short 50P costs $365 for max gain $135
     
    Sir this a gme thread
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    10 minutes ago, Bone3421 said:
    6 hours ago, 52-80 said:
    check out this trade on AMC, using Nov 19th expiring options:  Buy 50-strike put + Sell 45-strike put.
    pricing right now at 3.50 per contract = $350 deduction from your account.  max loss is losing the entire $350.  max profit is $150. 
     
    here is a plot of profit-loss curve at the expiration date in November, with stock price in X.  stock price at 46.50 your position is breakeven.  below 45 you get the max gain.  above 50 is max loss.
    image.thumb.png.f8aa4861f8d4478f857293a5110b81e8.png
     
    this is the profit-loss curve at an arbitrary time -- i set for next month at September 24th.  e.g. at stock price 38, your position is +$25  (which you'd rather ride until November).
    by the way, if you change the volatility parameter, the slope of this curve will change, but not by very much
    image.thumb.png.1cab2633f57b8e5934b486e8a1ac06e3.png
     
    AMC has been in a range of $30-40 for most of recent months, after slowly deflating from the squeeze
    image.png.23f5b43381bd3507023a8120446f1ec4.png
     
     
    basically, for a $350 expenditure, you have a good chance of turning a %50 profit by november, and your total risk is capped to that $350.  no margin calls.
     
    you could also drag out the expiration to December 17th and the play is largely the same.  could tweak the strikes if its your fancy.  long 55P short 50P costs $365 for max gain $135
     

    Sir this a gme thread

    Do similar for GME in October, long 200P short 195P

     

    cost 315$ per contract. Max profit $185 

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    Reddit crowd talking about how/why sears and blockbuster had big increases today...tons of naked shorts finally get closed with new sec rules in place?

    Seems weird to me but I did find on Google that blockbuster also had a 2000% increase back in January when everything was crazy

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