Quote:
Originally Posted by sabotai
I lied, my hands are totally made of paper. I tapped at earlier today at $120. I'll take my $300 loss and I will not be doing anything this stupid again this week.
The only surprising thing is that the price didn't immediately shoot up to $300 after I sold.
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You can still get back in buddy...
So the analysis here that makes sense to me is that it truly is a war surrounding call options (which expire every Friday EoD, but can also be exercised earlier in the week if the stock closes above the target price on any given day). That's why there was a MASSIVE fight with high volume at EoD over whether the price would finish over or under $100. The "Longs" won, it did, and that put 4.722 million shares in the money & meant Chicago option writers need to find them by EoD Monday for that strike price alone.
https://www.marketbeat.com/stocks/NYSE/GME/options/ (I don't know what the Failure to Deliver punishment is on option calls, it sounds a lot more severe than Shorting where you can basically get a slap on the wrist & put it off for 14 days by paying 5% or less of the price, but we're in uncharted waters here.)
There were about 10 million shares that hit ITM today and are due Monday. There are about 15 million that will hit next Friday up to $100, about double that by the time you hit $200, and that mad lad DFV (probably) dropped $2.4 million on 2,000 250c options that expire next Friday 3/5. Not like he'll get $2.4 if it hits that price, rather he spent $2.4m for the right to buy 200,000 shares for $50m next Friday regardless of the price it's actually at, and he can either pocket the difference if it's above that, or just sit on the shares. But what's creating the feedback loop is that the options writers need to actually buy the shares each Monday & transfer them, which is what led to the gamma squeeze late on Wednesday & could very well do so on Monday.
Either way, once you start realizing the sheer numbers involved here it becomes obvious selling (at least OTM) options should probably be capped at float or at least total "available" shares, that Plotkin wasn't lying when he told Congress it was really the options activity not shorts getting out that caused the first huge spike, and the fact that that MF'er DFV is literally putting up $2.4m on a bet it should be at or above $250 by next Friday is a pretty good sign. And if I don't sound like a complete rambling lunatic by now check out the 3/19 option calls numbers...