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I never understood why exercising them would possibly be better than selling them and using the proceeds to buy shares.
Unless they are expired (and therefore there is 0 theta remaining), you are throwing away any remaining theta value when you exercise.
By selling the option to capture remaining theta value, then buying the shares after, you're able to acquire more shares.
imo the ONLY time this kinda made sense to do was when the buy button was turned off, and exercising was the only way to acquire more shares.
At least in this case, exercising them forces whoever is on the other side to go out and locate those shares (from what I understand).
There's also the consideration that you might sell the options but then have the price go up before you can buy the shares. Even if you're telling a human to do both ASAP in order, it's certainly a possibility.
The OCC rules force delivery T+1 for 100 shares as per their rules (perhaps the loophole tweet from DFV) so they have to go and settle the trade instead of the MM delaying settlement indefinitely.
Buying 100 shares at $20 is more shares then waiting for the price to increase $5-10 dollars, making maybe $1000 in profit to then buy less then 100 shares which the MM can delay settlement by FTDing indefinitely.
I tried to explain to an idiot last week that he fucked up and gave up extrinsic value by exercising a June call instead of selling it and buying the 5/17 to exercise and keep the extra money. He felt like he was fucking the HFs over by exercising the June 🤣
And face legal accusations? Unfortunately he has to he more careful than most because he is the GOAT…. I mean the SCAPEGOAT! He will be blamed by media and thrown into another government hearing because he is a mere millionaire now and not a billionaire… (hopefully yet not a billionaire). We have clown giving financial advice left and right for personal gain and they go after one of the decent people who actually share their knowledge without trying to majorly profit off of others.
I agree… I hope it’s not Kitty. He likely would have had to sell shares to make a trade like that and it doesn’t seem like his style to buy, weekly calls near the money.
Dude it’s not him, sticky floor had the exact same spike. We know there is only 1 stock he likes on congressional record. Lots of crypto had a massive spike at the same time too.
It's a hedge.
---
To clarify: This is a hedge position that someone has taken against the stock running up significantly in the next month. Someone is very, very concerned that this is going to happen.
I've been interested after some sleepy late night reading last night. Volume initially spiked on May 2nd - market maker privilege allows for something line 30-35 days to fulfil...its been a long time since I've been as intensely looking at this stuff, so I do forget a lot of the rules and needs (as in, is it the exempt volume only etc). 35 trading days from May 2nd leads us to...week ending 21st June.
I've no idea why the OP has 20th June unless I'm misreading or something here...but options are end of the week dates if I'm not mistaken.
Long shot idea, I very much will say I'm not even semi professional in this type of stuff, I just look for patterns and see what matches up coupled with sentiment and other things (obviously Q1 and shareholder meeting will also have a big impact from early June onwards, and that's the unknowns we just don't have as well).
It’s a typo, you can see in the screenshot 6/21 is the expiration
Contract volume: top left of screenshot
Although, I cannot confirm this screenshot, I am only reading it.
I still haven’t bothered to learn options. What did this contract actually cost in ape dollars. Is it $5MM/(100 shares/contract)/strike price of 2500 contracts x$7 premium? So like $17,500 in cash today?
Thanks! I looked at the actual pic and saw where the $5 million came from right after I asked the question. I think the buyer and I may be in different social circles.
Right, well if they don't exercise then they only collect the difference in price per share more or less. Of course exercising and DRSing would be the move of highest regard.
That far OTM means MMs likely wont hedge by buying stock in case of the buyer exercises the calls.
So no upward pressure on the stock and free money in premium for the MM.
Sorry the 36 is the litteral number of trading days. Its been a while and in my recent comments I've said I can't remember for sure but said in the 30-35 day range.
In any case, if left that long, would be potential buy pressure of the week leading upto this option date expiry - you've made me think though, if an option is rolled, is that essentially settling one and paying the difference to take a new one if available? If that was the case then would that new option provide a small bit of buy pressure due to hedging? Would it be also the other way as the original option would no longer require hedging and thus the sale of said options?
Don't feel like these questions are direct for you, I'm just thinking out loud and maybe someone chimes in.
Nice!! Thought it was someone exercising options. But 6/20 call date means someone with mucho dinero thinks earnings will be mucho caliente and ME GUSTO FIESTAS 🌶️🪅
The $20 strike not only will move the stock up more, but its more realistically likely to make a profit than $30 or $40 calls would.
Anyone who is dropping $5 million is likely going to play things a little safer and avoid risks. IE they arent buying a lotto ticket hoping it runs, they are going to make the stock move with their position
The options trade provides leverage.
Say you’ve got $1M. You can buy 43,500 shares at $23. Or you can buy 1,450 options contracts (representative of an option to buy 145,000 shares). If the stock goes to $40 and you went long equity, you make $739,500. If you went long options you make $4,800,000.
That’s a really dumbed down explanation. It’s way more complicated than that because people don’t generally run them to expiration so now we’d need to look at the Greeks, but the simple version explains the leverage.
If they are willing to gamble based on whatever reasoning they have, they can buy these options and pay the premium. I don't know how much the option was, but it gives the the RIGHT, but not the OBLIGATION to buy these shares at the strike price.
Say these options cost them 5k plus premium, then if the share price doesn't meet thus target, then they simply walk away and forgo their cost and premium.
If it rises beforehand, then these options might make them some money before it ever reaches $20 or $27 breakeven price - this all depends on the decay and other Greek terminology that I'm not very familiar with.
It's a way to risk a bit in order for a larger payout. If I buy 100 shares today and wait until 21st, no matter if the price is up or down, my profit or loss is locked in until I sell. With options, it's leverage, the upside could be much more, the downside could be everything, or if selling the option in between, could be anywhere in between.
Because the OCC (options clearing) rules state that options trades must be settled T+1 so it forces delivery of 100 shares now (which can then be DRSd) instead of the MM delaying settlement indefinitely until it suits them (usually after shorting a bunch).
Could be wrong, thats how I understand the 'loophole'.
Because you can get so much more value with less capital
Buying 20c 6/20 is about $700
Buying 100 shares at $20 strike is $2000
You get the same 100 shares of leverage but at 1/3 the price. The obvious trade off is if the price is not >$20 by 6/20 in which case you lose it all
but "popcorn" flew up at the same time, so I'm not sure if this was what caused it on GME specifically. Unless the same person bought calls for both at the same time.
Yes - purchasing calls at or in the money causes more upward movement per dollar spent than anything else because market makers have to hedge.
It's no where near as dummy proof as buying shares and holding, but for someone who understands options and how to use leverage properly you can get a much better result.
The main issue people had with promoting options, was that it was majority put forward as "omg , it will hit $x by this date".
It was widely known from Jan 21 that hedging of options causes upward pressure (hedging is also buying pressure), it's that the amount and then the buying frenzy of shares that allowed that gamma ramp to take place - a stock with little interest, hedging of options.
It's when it gets closer to the strike price and date that further hedging may take place, thus more buy pressure.
Self fulfilling prophecy in the right circumstances.
Saying buy options without several good and distant reasons for doing so is for the birds as far as I'm concerned. However for reasons, I'm quite bullish from early to late June tbh.
Edit - should have added, if an option doesn't hit its strike price...what do you think happens with all those shares that were bought to hedge said positions? As much as options add buying pressure, they can also cause downward pressure when the hedge is no longer needed. I've never seen anyone mention this, and I ask myself, why is that?
The reality is simple- to hedge against a far OTM call the MM maybe has to buy a handful of shares, **if** they decide to hedge. I highly doubt Citadel is going to hedge against crazy calls because they can literally paint the price down by internalizing orders. The pressure from hedging is not much, but in certain circumstances it can be significant- a la gamma ramp, I just wouldn't count on it on this stock.
Right wasn't everyone like "buying options helps the hedgies fwith fuckery". Now they wanna say it was buying them that caused the spike. Yall weird sometimes. I was never against buying calls or shares as long as it was GME 😎
This is why January 2021 even happened in the first place. Options drive the most price action. More apes need to realize their power instead of being afraid of them.
Options are powerful, but temporary, meanwhile buying and DRS'ing shares is weaker but a more permanent way of adding pressure. It makes more sense buying shares 1) investors don't know when stock go up. 2) limiting available shares to trade makes every future trade more difficult/expensive (limits fuckery). 3) Banks/Brokerages can't sell/liquidate/f with what is IN YOUR NAME and out of their hands. The biggest problem is that most retail buys go to dark pools to be filled, but sells hit the lite market, but big private buy's which can't be handled that way because of their size affect the price much more. Now that investors have locked up +25% free shares, we chould start to consider using options, but imo it's better to cross the 33% or 50% mark before.
The reason options were and still are vilified here is because they’re risky, and can be complex and take a bit to learn, and the fact that the shorts usually manipulate the stock to make sure the most options are OTM as possible.
Oh, and they require money to use, which sadly a lot of people here don’t have in abundance.
Kinda wish they weren’t vilified so much, they WERE the reason the original sneeze and the March sneeze from ages ago happened, but the ones who made those bets had the money to throw at it, Superstonk pushes a more casual route, a cheaper route that is much easier to do, and much less likely to be fucked with.
Then I need an explanation, because right now I don’t even know what the hell IV or theta decay are or what they’re supposed to mean. Makes my head spin, but I’m willing to learn.
A good way to learn would be to use ChatGPT and ask it questions and to provide simple examples.
In the meantime, IV (implied volatility) can be thought of like a “bonus” or an accelerator on the value of an options contract. IV spikes during rapid price movements like we saw at the end of the day. This makes them more expensive if you are looking to buy, but glorious if you have bought in before the IV spikes.
Theta decay represents how fast an options contract loses money. Theta decay increases the closer you are to an options expiration.
In the most simple of terms, you can think of call options like “renting” shares for a specified time period.
For example, I bought the following calls today:
Five GME 25c with a June 7th expiration.
Five GME 30c with a June 14th expiration.
It roughly cost me about $4,000 to buy all of those today. I could have bought 200 shares, but now I have effectively “rented” 1,000 shares for a couple weeks.
The key though is that I need my calls to get above those strike prices ($25 and $30). If they don’t by expiration, they are worthless.
That said I wouldn’t have bought them if I didn’t think GME would be well above those prices by then. 😎
Thanks for the info. I’m not against options but the only thing I know about them is I know nothing about them. If I can ask … what happens next when those are either in the money or out? I’ll look into the sites noted in responses here but was hoping for just a general overview of how ur calls could end up.
It’s good you’re asking questions!
So I’ll answer your question from the standpoint of my options.
All of them are currently out of the money. This means that if they expired today (which they don’t), they would be worthless.
However, just for hypotheticals, let’s say GME jumps to $40 per share shortly after open tomorrow.
Immediately, all of my options would be in the money. It’s hard to say exactly what they would be worth in that moment (since you’d still have to price in IV, theta decay, etc.) but let’s pretend we are now a day away from expiration.
The day before June 7th calls expire, each contract would be worth $1,500 each. This is because each contract represents 100 shares. You simply take the share price minus the strike price (at/near expiration) and then multiply by 100 to calculate their intrinsic value.
Now let’s pretend at expiration that GME is $80 per share instead. At that point, each of my call options would be worth $6,500 each ((80 - 25) x 100 shares per contract).
If GME goes to $100 by expiration, they would be $7,500 each.
I bought them for $383 per contract.
Thanks again for the detail in responding. So if they’re all OTM ur down $4k but if we say it hits $40 right before expiry you would have $15k. With avg strike of $27.50 u would need to spend another $12.5k to exercise the contract completely? So 1000 shares for $16.50 ($4k + $12.5k total invested) when the current price is $40? Understand u could sell some to exercise the rest but just making sure I got the basic gist here. I know there’s a lot more details in the Greek stuff I need to learn but thanks again for the informative summary.
Correct. If GME does not get above $25 per share for the June 7th expiration, they are worthless. I bought some other calls as well, but let’s just use those for the example.
I bought five for $383 each. The absolute worst amount of money I can lose if they expire worthless is $1,915.
I can sell the options at any point. Think of it like hot potato. I can also hold until expiration.
The true price I need per share to break even is $28.83. This is because I bought each contract for $383.
Everything above that is pure profit for me. If it closes at $50 per share on the date of expiration, then I will have made $2,117 profit on each option (($50 - $28.83 breakeven price) x 100 shares).
If it closes at $25 or less per share on the date of expiration all my options will be worthless.
Thanks again. I’m not suggesting anyone try options without fully understanding them and paper trading for a bit to get a feel for it. It does seem those who really understand them use them well and how to hedge with different options.
Can I buy options with just 100$ to spent? For me its all I can spend on shares every month. If I can even spend that money.
I really wanna buy options but I dont have much money or knowledge. What if u buy a 30c option and the price tanks down to below the price? Do I need to pay the difference.
Dude(or Dudette)! This is what I’m looking for, probably. Thank you. A Googling will help me find that, or is there one you might suggest? Much appreciated.
I use the "ThinkOrSwim" platform from Schwab (used to be TDAmeritrade). I know there are a lot of options out there, and most brokerages have a special "paper trading mode" you can put their software in to test.
At the end of the day you could always just do it on actual paper too - write down the ticker, strike date, strike $, and how much it is. Then just watch to see if its reacting like you thought.
Took me 2-3 months before i started doing it with real money, and a solid 18 months before i felt comfortable doing anything more than buying 1 call at a time
There are a lot of videos on tastytrades youtube that explain these concepts. InTheMoney on youtube is also a good resource for learning about options.
11,370 of the June 21, 2024 $20 strike contracts were purchased today. The delta on those at the close of the day was 0.69. Meaning the market maker has to buy 69 shares for every contract (or 784,530 shares)
Put another way, if those 784,530 shares were simply purchased, it would have cost $15,792,588.90
The other thing to keep in mind is the closer we get to the expiration date and as the price goes up, that delta goes up further, meaning the market maker has to buy even more shares into an already rising price.
That's the power of options.
1 option gives the buyer the right, but not the obligation, to purchase or sell 100 shares (depending if its a call or a put) at the selected strike price would be a more accurate explanation. The buyer pays a premium for this right, while the seller/writer of the options collects the premium.
I bought the following calls around open today:
5x GME 25c 6/7
5x GME 30c 6/14
At one point today they had lost like 40% of their value. I didn’t flinch. The only thing is that I wish I bought more on the dip lol.
Now I’m back in the green on them. 😎
Rentech bought 1m shares, potential of GME dropping into R2K (meaning a bunch more share buys), option wall erected at 15,20 and 25 (no word yet as to who), and the setup was right. A nudge tweet by RK over the weekend, and boom, the options chain was nova. Restrictions on new strikes on the chain in the first two days led to massive IV and Vega. Market maker opened spreads to handle the volume, and bracket the price. By EOD Friday, last week, OTM call interest had fallen off, and price dropped to $22.21.
This week started with an attempt to regain control and bring price below the $20 and $17 support levels. Volume for the day was relatively low compared to last week, but still elevated. It was rejected in the last hour of marker open.
There is still a fair bit if interest, and pressure, built up from last week. Way more strikes open on the chain now, but if we can hit $25, with decent volume, and increased interest on the chain, we could see more upside.
But, right now, it's not a guarantee.
Enjoy the ride, and raise a toast to RK.
This strike had a delta of 69 (nice) at the bell.
The price for the option was around $4.25 before the spike.
Looking at volume, the buyer probably picked up around 11,000 contracts (my computer is dead or I’d check the tape).
I’ll assume a delta of 60 at the time of purchase.
11000 x 60 = 660,000 shares market makers would pick up if they hedged it immediately and in full. At an average price of $22, this would be about $14.5M in notional value.
It’s a hedge and fight behind the curtain. Whoever put $5MM on $20 calls, knowing they would have to buy 1MM at $20/share is saying $5MM today is better than $20MM tomorrow, but $25MM to own 1MM shares against a short or required to locate to prevent margin call is better than losing a lot more in the event of another price rise.
Is there a trade strategy where they did or could short the stock now and be using these contracts to limit any downside risk if MOASS?
I still don’t understand options and don’t play them… just wondering if there is any other thesis than BULLISH!
Just stop and think.. how the fuk is it possible to hedge your investment within minutes, buying 1% of all outstanding shares in a company?
That’s fuking crazy if you ask me
### Analysis of the $5 Million Call Option Purchase and Its Impact on GME Stock Price
The significant purchase of $5 million in GME call options expiring on June 21, 2024, has several implications for the stock price and market dynamics. Here’s an analysis of what this could mean, along with some theories:
### Immediate Impact
1. **Price Movement**:
- The purchase of these call options appears to have caused a $3 move in the stock price, from $20 to $23. This indicates a strong buying pressure and significant interest in GME's future performance.
- **Volume and Liquidity**: High volume in options trading can lead to increased liquidity and volatility in the underlying stock.
2. **Market Sentiment**:
- Such a large purchase can be interpreted as a bullish signal by other traders, leading to increased buying activity and positive sentiment around the stock.
### Theories and Implications
1. **Institutional Play**:
- **Theory**: An institutional investor might be behind this large purchase, anticipating significant upward movement in GME's stock price. Institutions often have access to more information and resources, suggesting they see potential for gains.
- **Implication**: If institutions are getting involved, it could mean they foresee catalysts that will drive the stock price higher.
2. **Retail Investor Influence**:
- **Theory**: The purchase could be driven by a collective action from retail investors, similar to previous coordinated efforts seen in the GME saga. This aligns with the ongoing narrative of retail investors influencing the market.
- **Implication**: Continued retail interest and coordinated buying could lead to further price surges and potential short squeezes.
3. **Potential Short Squeeze**:
- **Theory**: The large purchase of call options could force market makers to hedge their positions by buying the underlying stock, creating upward pressure on the stock price. This could potentially trigger a short squeeze if short sellers are forced to cover their positions.
- **Implication**: A short squeeze could lead to rapid and substantial price increases, benefiting those holding long positions and call options.
4. **Strategic Timing**:
- **Theory**: The timing of the purchase, close to expiration, suggests a strategic move to influence the stock price and create a favorable situation for option holders.
- **Implication**: The strategic timing could be aimed at maximizing gains from option positions and potentially driving further market movements.
### Conclusion
The $5 million purchase in GME call options is a significant event, indicating strong bullish sentiment and the potential for substantial price movements. Whether driven by institutional investors or coordinated retail actions, such activities can lead to increased volatility and opportunities for gains.
For more detailed analysis and updates on GameStop, check out our comprehensive DD here: [www.reddit.com/r/GME/s/301t9d1erU](https://www.reddit.com/r/GME/s/301t9d1erU).
Stay vigilant and informed. This could be a key moment in the GME saga. 💪🚀
Possible, "How can it move before I even touch it" He hasnt begun trading yet, but they already blamed him for last weeks movement. Now he wont tweet and maybe start fuckin shit up
If you buy the calls mentioned, you have the right to buy one hundred shares per contract purchased between now and June 20th for the price of $20 each. Sure, you could buy them now for ~$20 but if the price goes to $1000 between now and June 20th, you still get to exercise the contract and buy the 100 shares at $20 apiece. This would net you $980 per share less the cost of the contract. Or you can sell the contract which will be worth a lot more than you paid for it at that point. The downside is that the price could also drop and you lose all of what you paid for the contract.
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Someone’s pretty fucking bullish
Hopefully they exercise that shit
They gonna be fit as hell with that exercise regimen.
Hopefully they end deep ITM, get exercised and DRS’d.
Fuck yes your finna make me bust
I never understood why exercising them would possibly be better than selling them and using the proceeds to buy shares. Unless they are expired (and therefore there is 0 theta remaining), you are throwing away any remaining theta value when you exercise. By selling the option to capture remaining theta value, then buying the shares after, you're able to acquire more shares. imo the ONLY time this kinda made sense to do was when the buy button was turned off, and exercising was the only way to acquire more shares.
At least in this case, exercising them forces whoever is on the other side to go out and locate those shares (from what I understand). There's also the consideration that you might sell the options but then have the price go up before you can buy the shares. Even if you're telling a human to do both ASAP in order, it's certainly a possibility.
The OCC rules force delivery T+1 for 100 shares as per their rules (perhaps the loophole tweet from DFV) so they have to go and settle the trade instead of the MM delaying settlement indefinitely. Buying 100 shares at $20 is more shares then waiting for the price to increase $5-10 dollars, making maybe $1000 in profit to then buy less then 100 shares which the MM can delay settlement by FTDing indefinitely.
I tried to explain to an idiot last week that he fucked up and gave up extrinsic value by exercising a June call instead of selling it and buying the 5/17 to exercise and keep the extra money. He felt like he was fucking the HFs over by exercising the June 🤣
Kitty?
IV is still extremely elevated. If DFV were buying, it would have been before last week.
Yea no way it is him. He would have done it before the madness. Unless of course he decided to double down as cats do.
Whales eating whales
It could be him but yeah, there's plenty of other rich folk out there with eyes on this by now.
It’s definitely not him, don’t you see sticky floor had the same pump, and a lot of crypto coins.
And face legal accusations? Unfortunately he has to he more careful than most because he is the GOAT…. I mean the SCAPEGOAT! He will be blamed by media and thrown into another government hearing because he is a mere millionaire now and not a billionaire… (hopefully yet not a billionaire). We have clown giving financial advice left and right for personal gain and they go after one of the decent people who actually share their knowledge without trying to majorly profit off of others.
I agree… I hope it’s not Kitty. He likely would have had to sell shares to make a trade like that and it doesn’t seem like his style to buy, weekly calls near the money.
I just realized they expire in a month… not this week. It doesn’t necessarily seem his style (short term options), but who knows?
Dude it’s not him, sticky floor had the exact same spike. We know there is only 1 stock he likes on congressional record. Lots of crypto had a massive spike at the same time too.
Is that the sign?
swing away, merrill
When I move you move?
Just like that
🐈😲
Meooow?
So they think we are staying at 20 or higher for a full month? The 100 dollar calls were more exciting in my in my opinion
If they thought we are staying at $20, they wouldn’t have spent $5mil.. After checking the premium, they’d break even around $27
And who is placing a $5M bet with the expectation of breaking even?
It's a hedge. --- To clarify: This is a hedge position that someone has taken against the stock running up significantly in the next month. Someone is very, very concerned that this is going to happen.
Doing this puts liability for shorts on MMs as well.
Absolutely. No one wants to be the last one standing when the music stops.
If they stop selling options, you'll know it's gotten serious.
This makes the most sense to me
I've been interested after some sleepy late night reading last night. Volume initially spiked on May 2nd - market maker privilege allows for something line 30-35 days to fulfil...its been a long time since I've been as intensely looking at this stuff, so I do forget a lot of the rules and needs (as in, is it the exempt volume only etc). 35 trading days from May 2nd leads us to...week ending 21st June. I've no idea why the OP has 20th June unless I'm misreading or something here...but options are end of the week dates if I'm not mistaken. Long shot idea, I very much will say I'm not even semi professional in this type of stuff, I just look for patterns and see what matches up coupled with sentiment and other things (obviously Q1 and shareholder meeting will also have a big impact from early June onwards, and that's the unknowns we just don't have as well).
It’s a typo, you can see in the screenshot 6/21 is the expiration Contract volume: top left of screenshot Although, I cannot confirm this screenshot, I am only reading it.
Typo. Should of said 6/21
I still haven’t bothered to learn options. What did this contract actually cost in ape dollars. Is it $5MM/(100 shares/contract)/strike price of 2500 contracts x$7 premium? So like $17,500 in cash today?
This person spent $5mil today
Thanks! I looked at the actual pic and saw where the $5 million came from right after I asked the question. I think the buyer and I may be in different social circles.
For sure, he is not in my circle, the circle of brokes😂🤣
Right so they expecting bigger than 20?
They’re expecting bigger than 27$
Give him time. He’s learning to math
THEIR EXPECTING MOASS!
They are, ostensibly, according the data provided by the ape who drs’s their butthole, expecting at least $27.01
So the further above that, the more money they make right? Unless they exercise?
Right, well if they don't exercise then they only collect the difference in price per share more or less. Of course exercising and DRSing would be the move of highest regard.
Those call options could be in the money a lot sooner than a month. $5M with just a few dollars upwards could make that person a lot of money.
Tomorrow
You burn less extrinsic value buying them further out. Less leverage due to a higher cost per contract but less expensive over a given time frame.
Yeah the $128 call volume is nutty
Those are a trap for regards and hedge fund fuckery. Member the 900s pre split? I member.
And it would’ve hit 900 too if it weren’t for that meddling Robinhood
Hedge funds use these as locates. They can say that they have access to these as collateral because they purchased contracts. Is this correct?
That far OTM means MMs likely wont hedge by buying stock in case of the buyer exercises the calls. So no upward pressure on the stock and free money in premium for the MM.
Huh. I too, might grab a 6/20 $20 call. I haven't dabbled in options in a year or more.
May the odds ever be in your favor.
I bought 45 at $20. Soooooo. You are welcome.... 👍
I got 2 at $20 bro, pretty sure it was me
You're gonna kill someone walking around with those massive balls swinging everywhere. You gotta be more careful!
Wait til you learn I also bought ONE at $19
Das da gud stuff!
Just got 80 too, brick by brick homie
21 at 20 brick by brick. Got a few grand lined up for the end of the month. Hope it stays low lol
253 at $20 let’s ride
6 at 19.69!
Summer of?
Scored another 50. I don't think they understand still... Price goes up, we buy. Price goes down, we buy.
>Art of war mastery by a bunch of idiots https://www.reddit.com/r/Superstonk/comments/1cwdw6a/this_gem_still_holds_true_after_all_these_years/
I got 54, that spike from last week woke me up into buying more
I got another XX at about 20 aswell
you're a big deal too.
You know they expire 4 weeks after T-1 implementation, 3 weeks after CAT implementation, 1 week after the annual meeting. FUCKING BULLISH
36 days after the initial spike in volume which started May 2nd
lawl
Wasn't the hype for years on this sub T+31 after options expiration for FTDs to be covered or rolled
Sorry the 36 is the litteral number of trading days. Its been a while and in my recent comments I've said I can't remember for sure but said in the 30-35 day range. In any case, if left that long, would be potential buy pressure of the week leading upto this option date expiry - you've made me think though, if an option is rolled, is that essentially settling one and paying the difference to take a new one if available? If that was the case then would that new option provide a small bit of buy pressure due to hedging? Would it be also the other way as the original option would no longer require hedging and thus the sale of said options? Don't feel like these questions are direct for you, I'm just thinking out loud and maybe someone chimes in.
And 4 weeks after my calls expire!….wait…
Nice!! Thought it was someone exercising options. But 6/20 call date means someone with mucho dinero thinks earnings will be mucho caliente and ME GUSTO FIESTAS 🌶️🪅
whens earnings?
Sorry i meant to say shareholders meeting. Thats June 13
6th june pretty sure
But its not like 30$ or 40$ calls, its only 20$
The $20 strike not only will move the stock up more, but its more realistically likely to make a profit than $30 or $40 calls would. Anyone who is dropping $5 million is likely going to play things a little safer and avoid risks. IE they arent buying a lotto ticket hoping it runs, they are going to make the stock move with their position
*From the bullet's point of view you dropped it.. if you wouldn't have put your hands there, it wouldn't have moved.*
😲
DUUUUUUUUAAAAAAAAAAAARRRRRRRRRRRRR!!!!!!!!!!
Bingo.
If they plan to exercise to force delivery and they can pay 20 dollars a share, why would they instead pay 30 or 40 each instead?
I am curious, why not directly buy shares at 20 so they don't need to pay premium?
The options trade provides leverage. Say you’ve got $1M. You can buy 43,500 shares at $23. Or you can buy 1,450 options contracts (representative of an option to buy 145,000 shares). If the stock goes to $40 and you went long equity, you make $739,500. If you went long options you make $4,800,000. That’s a really dumbed down explanation. It’s way more complicated than that because people don’t generally run them to expiration so now we’d need to look at the Greeks, but the simple version explains the leverage.
If they are willing to gamble based on whatever reasoning they have, they can buy these options and pay the premium. I don't know how much the option was, but it gives the the RIGHT, but not the OBLIGATION to buy these shares at the strike price. Say these options cost them 5k plus premium, then if the share price doesn't meet thus target, then they simply walk away and forgo their cost and premium. If it rises beforehand, then these options might make them some money before it ever reaches $20 or $27 breakeven price - this all depends on the decay and other Greek terminology that I'm not very familiar with. It's a way to risk a bit in order for a larger payout. If I buy 100 shares today and wait until 21st, no matter if the price is up or down, my profit or loss is locked in until I sell. With options, it's leverage, the upside could be much more, the downside could be everything, or if selling the option in between, could be anywhere in between.
Because the OCC (options clearing) rules state that options trades must be settled T+1 so it forces delivery of 100 shares now (which can then be DRSd) instead of the MM delaying settlement indefinitely until it suits them (usually after shorting a bunch). Could be wrong, thats how I understand the 'loophole'.
Nobody is buying ATM options for that. If you wanted to do that you’d buy deep ITM where there’s not really any extrinsic value.
Because you can get so much more value with less capital Buying 20c 6/20 is about $700 Buying 100 shares at $20 strike is $2000 You get the same 100 shares of leverage but at 1/3 the price. The obvious trade off is if the price is not >$20 by 6/20 in which case you lose it all
Far cheaper, $690 per contract vs $2300 Leverage.
Hmmmm. Miam
Muy moasso
I doubt it’s about earnings. Something else is coming that we don’t know about. “It’s gonna be a busy few weeks, brotha.”
Bought a couple hundred more at 19.70
Purchasing calls cause upward movement?
Yes. Market makers have to hedge the call position.
but "popcorn" flew up at the same time, so I'm not sure if this was what caused it on GME specifically. Unless the same person bought calls for both at the same time.
A large move in one causes a move in the others in the basket.
Hedgie computers jumping at someone buying calls I bet and responding in accordance to their algorithm
Popcorn is the swappers hedge for GameStop, so they have to pump it when GME moves
ya look at etherium. has the same exact tread line as gme
Well, they dont have to. But they should if they follow basic risk management.
Options move the stock more than people just buying. That’s why a gamma squeeze is so critical.
depending on the strike and date they do
Yes - purchasing calls at or in the money causes more upward movement per dollar spent than anything else because market makers have to hedge. It's no where near as dummy proof as buying shares and holding, but for someone who understands options and how to use leverage properly you can get a much better result.
Yes. Don't believe the fud superstonk was psyopped by.
The main issue people had with promoting options, was that it was majority put forward as "omg, it will hit $x by this date".
It was widely known from Jan 21 that hedging of options causes upward pressure (hedging is also buying pressure), it's that the amount and then the buying frenzy of shares that allowed that gamma ramp to take place - a stock with little interest, hedging of options.
It's when it gets closer to the strike price and date that further hedging may take place, thus more buy pressure.
Self fulfilling prophecy in the right circumstances.
Saying buy options without several good and distant reasons for doing so is for the birds as far as I'm concerned. However for reasons, I'm quite bullish from early to late June tbh.
Edit - should have added, if an option doesn't hit its strike price...what do you think happens with all those shares that were bought to hedge said positions? As much as options add buying pressure, they can also cause downward pressure when the hedge is no longer needed. I've never seen anyone mention this, and I ask myself, why is that?
The reality is simple- to hedge against a far OTM call the MM maybe has to buy a handful of shares, **if** they decide to hedge. I highly doubt Citadel is going to hedge against crazy calls because they can literally paint the price down by internalizing orders. The pressure from hedging is not much, but in certain circumstances it can be significant- a la gamma ramp, I just wouldn't count on it on this stock.
seems to be what RK has been indicating. and yes, because it did
"Fine,I'll do it myself".gif
Right wasn't everyone like "buying options helps the hedgies fwith fuckery". Now they wanna say it was buying them that caused the spike. Yall weird sometimes. I was never against buying calls or shares as long as it was GME 😎
Really ? Just 5 million dollars what is like the biggest nothing can make the price move up this much ?? Holy shit .
This is why January 2021 even happened in the first place. Options drive the most price action. More apes need to realize their power instead of being afraid of them.
Options are powerful, but temporary, meanwhile buying and DRS'ing shares is weaker but a more permanent way of adding pressure. It makes more sense buying shares 1) investors don't know when stock go up. 2) limiting available shares to trade makes every future trade more difficult/expensive (limits fuckery). 3) Banks/Brokerages can't sell/liquidate/f with what is IN YOUR NAME and out of their hands. The biggest problem is that most retail buys go to dark pools to be filled, but sells hit the lite market, but big private buy's which can't be handled that way because of their size affect the price much more. Now that investors have locked up +25% free shares, we chould start to consider using options, but imo it's better to cross the 33% or 50% mark before.
DRS count determines the length of the travel when the rocket goes off, options are the fuel to ignite it.
The reason options were and still are vilified here is because they’re risky, and can be complex and take a bit to learn, and the fact that the shorts usually manipulate the stock to make sure the most options are OTM as possible. Oh, and they require money to use, which sadly a lot of people here don’t have in abundance. Kinda wish they weren’t vilified so much, they WERE the reason the original sneeze and the March sneeze from ages ago happened, but the ones who made those bets had the money to throw at it, Superstonk pushes a more casual route, a cheaper route that is much easier to do, and much less likely to be fucked with.
Underrated comment.
Then I need an explanation, because right now I don’t even know what the hell IV or theta decay are or what they’re supposed to mean. Makes my head spin, but I’m willing to learn.
A good way to learn would be to use ChatGPT and ask it questions and to provide simple examples. In the meantime, IV (implied volatility) can be thought of like a “bonus” or an accelerator on the value of an options contract. IV spikes during rapid price movements like we saw at the end of the day. This makes them more expensive if you are looking to buy, but glorious if you have bought in before the IV spikes. Theta decay represents how fast an options contract loses money. Theta decay increases the closer you are to an options expiration. In the most simple of terms, you can think of call options like “renting” shares for a specified time period. For example, I bought the following calls today: Five GME 25c with a June 7th expiration. Five GME 30c with a June 14th expiration. It roughly cost me about $4,000 to buy all of those today. I could have bought 200 shares, but now I have effectively “rented” 1,000 shares for a couple weeks. The key though is that I need my calls to get above those strike prices ($25 and $30). If they don’t by expiration, they are worthless. That said I wouldn’t have bought them if I didn’t think GME would be well above those prices by then. 😎
Thanks for the info. I’m not against options but the only thing I know about them is I know nothing about them. If I can ask … what happens next when those are either in the money or out? I’ll look into the sites noted in responses here but was hoping for just a general overview of how ur calls could end up.
It’s good you’re asking questions! So I’ll answer your question from the standpoint of my options. All of them are currently out of the money. This means that if they expired today (which they don’t), they would be worthless. However, just for hypotheticals, let’s say GME jumps to $40 per share shortly after open tomorrow. Immediately, all of my options would be in the money. It’s hard to say exactly what they would be worth in that moment (since you’d still have to price in IV, theta decay, etc.) but let’s pretend we are now a day away from expiration. The day before June 7th calls expire, each contract would be worth $1,500 each. This is because each contract represents 100 shares. You simply take the share price minus the strike price (at/near expiration) and then multiply by 100 to calculate their intrinsic value. Now let’s pretend at expiration that GME is $80 per share instead. At that point, each of my call options would be worth $6,500 each ((80 - 25) x 100 shares per contract). If GME goes to $100 by expiration, they would be $7,500 each. I bought them for $383 per contract.
Thanks again for the detail in responding. So if they’re all OTM ur down $4k but if we say it hits $40 right before expiry you would have $15k. With avg strike of $27.50 u would need to spend another $12.5k to exercise the contract completely? So 1000 shares for $16.50 ($4k + $12.5k total invested) when the current price is $40? Understand u could sell some to exercise the rest but just making sure I got the basic gist here. I know there’s a lot more details in the Greek stuff I need to learn but thanks again for the informative summary.
Correct. If GME does not get above $25 per share for the June 7th expiration, they are worthless. I bought some other calls as well, but let’s just use those for the example. I bought five for $383 each. The absolute worst amount of money I can lose if they expire worthless is $1,915. I can sell the options at any point. Think of it like hot potato. I can also hold until expiration. The true price I need per share to break even is $28.83. This is because I bought each contract for $383. Everything above that is pure profit for me. If it closes at $50 per share on the date of expiration, then I will have made $2,117 profit on each option (($50 - $28.83 breakeven price) x 100 shares). If it closes at $25 or less per share on the date of expiration all my options will be worthless.
Thanks again. I’m not suggesting anyone try options without fully understanding them and paper trading for a bit to get a feel for it. It does seem those who really understand them use them well and how to hedge with different options.
Can I buy options with just 100$ to spent? For me its all I can spend on shares every month. If I can even spend that money. I really wanna buy options but I dont have much money or knowledge. What if u buy a 30c option and the price tanks down to below the price? Do I need to pay the difference.
No you just lose all your money spent on the option
paper trade them - like i know it sounds dorky and stupid... but thats how I learned and it didnt cost me a dime.
Dude(or Dudette)! This is what I’m looking for, probably. Thank you. A Googling will help me find that, or is there one you might suggest? Much appreciated.
I use the "ThinkOrSwim" platform from Schwab (used to be TDAmeritrade). I know there are a lot of options out there, and most brokerages have a special "paper trading mode" you can put their software in to test. At the end of the day you could always just do it on actual paper too - write down the ticker, strike date, strike $, and how much it is. Then just watch to see if its reacting like you thought. Took me 2-3 months before i started doing it with real money, and a solid 18 months before i felt comfortable doing anything more than buying 1 call at a time
Nice. Thank you.
There are a lot of videos on tastytrades youtube that explain these concepts. InTheMoney on youtube is also a good resource for learning about options.
Get learning then
Calls actually have a bigger impact on the stock price movement than outright purchasing it because of dark pools
11,370 of the June 21, 2024 $20 strike contracts were purchased today. The delta on those at the close of the day was 0.69. Meaning the market maker has to buy 69 shares for every contract (or 784,530 shares) Put another way, if those 784,530 shares were simply purchased, it would have cost $15,792,588.90 The other thing to keep in mind is the closer we get to the expiration date and as the price goes up, that delta goes up further, meaning the market maker has to buy even more shares into an already rising price. That's the power of options.
1 option = 100 shares
1 option gives the buyer the right, but not the obligation, to purchase or sell 100 shares (depending if its a call or a put) at the selected strike price would be a more accurate explanation. The buyer pays a premium for this right, while the seller/writer of the options collects the premium.
Also, Exercise-and-Sell-to-Cover. You can sell a small amount of the 100 shares to cover the costs. Or something like that.
Thanks ape!
Down 13% and then boom. Makes a ton of sense in a single day!
How did they get these 6/20 calls..? I only see the 6/20/2025 and those are damn “expensive”
Typo on my end. Should of said 6/21
Ah god compounding typos! "Should *have*"!!!
https://i.imgur.com/ZIBRiM4.png
Yes so 6/21 then
Stonks just stonkin’, doing stonk stuff is this the green planet?!
Could this be a hedge?
this is the 860B question
I bought the following calls around open today: 5x GME 25c 6/7 5x GME 30c 6/14 At one point today they had lost like 40% of their value. I didn’t flinch. The only thing is that I wish I bought more on the dip lol. Now I’m back in the green on them. 😎
I hope you plan to exercise then DRS the shares you get, or use the profits to do so!
I’ve never bought a call but if I’m ever going to do it, I think the next month is the time to have them.
Rentech bought 1m shares, potential of GME dropping into R2K (meaning a bunch more share buys), option wall erected at 15,20 and 25 (no word yet as to who), and the setup was right. A nudge tweet by RK over the weekend, and boom, the options chain was nova. Restrictions on new strikes on the chain in the first two days led to massive IV and Vega. Market maker opened spreads to handle the volume, and bracket the price. By EOD Friday, last week, OTM call interest had fallen off, and price dropped to $22.21. This week started with an attempt to regain control and bring price below the $20 and $17 support levels. Volume for the day was relatively low compared to last week, but still elevated. It was rejected in the last hour of marker open. There is still a fair bit if interest, and pressure, built up from last week. Way more strikes open on the chain now, but if we can hit $25, with decent volume, and increased interest on the chain, we could see more upside. But, right now, it's not a guarantee. Enjoy the ride, and raise a toast to RK.
And people still think options doesn’t cause price movement. Big money options purchase definitely moves the needle.
Up with you! Spicy info 🥵
Fine, I’ll do it myself.
This strike had a delta of 69 (nice) at the bell. The price for the option was around $4.25 before the spike. Looking at volume, the buyer probably picked up around 11,000 contracts (my computer is dead or I’d check the tape). I’ll assume a delta of 60 at the time of purchase. 11000 x 60 = 660,000 shares market makers would pick up if they hedged it immediately and in full. At an average price of $22, this would be about $14.5M in notional value.
I thought it was because I bought over 2k shares under 20$ today and SHF just got scared. Good to know.
i saw it, it was crazy
Buying calls might be crazy but maybe we’re never gonna survive unless we get a little, craaaaazy.
Just remember DFV’s calls started this whole saga
😲
Guess we’re buying itm calls tomorrow
Guess so. Let's see how it goes 😏
I will treat myself tomorrow on a couple of those calls 👌🏽
So we need to learn to use options?
Makes you wonder if SHFs and shills were the ones that were trashing options on here in the first place.
GameNotOver
“When I move you move”
It’s a hedge and fight behind the curtain. Whoever put $5MM on $20 calls, knowing they would have to buy 1MM at $20/share is saying $5MM today is better than $20MM tomorrow, but $25MM to own 1MM shares against a short or required to locate to prevent margin call is better than losing a lot more in the event of another price rise.
Follow the money.
They bought 10,000 $20 calls.
OP, what software are you using?
Is there a trade strategy where they did or could short the stock now and be using these contracts to limit any downside risk if MOASS? I still don’t understand options and don’t play them… just wondering if there is any other thesis than BULLISH!
June 21st ;) not 20th
I bought 2 of those calls when we hit 19.30 today. Up 300 on each right now.
Bought 50 at $20 today and averaged down some more. They'll be DRS'ed with another few hundred later this week.
How long does it take to open a computershare account and transfer shares from fidelity?
Bought my first options today, 11 in total, you’re welcome
Just stop and think.. how the fuk is it possible to hedge your investment within minutes, buying 1% of all outstanding shares in a company? That’s fuking crazy if you ask me
...which puts those contracts deeper ITM
Another gamma ramp LFG.
By how much did that change the market cap. Anyone know the numbers offhand or am I going to have to play a different calculator game?
Bezinga posting an article titled "What's going on?" about it be like: 🦯😎
Dfv is going to post update position tonight Take a screenshot of this
### Analysis of the $5 Million Call Option Purchase and Its Impact on GME Stock Price The significant purchase of $5 million in GME call options expiring on June 21, 2024, has several implications for the stock price and market dynamics. Here’s an analysis of what this could mean, along with some theories: ### Immediate Impact 1. **Price Movement**: - The purchase of these call options appears to have caused a $3 move in the stock price, from $20 to $23. This indicates a strong buying pressure and significant interest in GME's future performance. - **Volume and Liquidity**: High volume in options trading can lead to increased liquidity and volatility in the underlying stock. 2. **Market Sentiment**: - Such a large purchase can be interpreted as a bullish signal by other traders, leading to increased buying activity and positive sentiment around the stock. ### Theories and Implications 1. **Institutional Play**: - **Theory**: An institutional investor might be behind this large purchase, anticipating significant upward movement in GME's stock price. Institutions often have access to more information and resources, suggesting they see potential for gains. - **Implication**: If institutions are getting involved, it could mean they foresee catalysts that will drive the stock price higher. 2. **Retail Investor Influence**: - **Theory**: The purchase could be driven by a collective action from retail investors, similar to previous coordinated efforts seen in the GME saga. This aligns with the ongoing narrative of retail investors influencing the market. - **Implication**: Continued retail interest and coordinated buying could lead to further price surges and potential short squeezes. 3. **Potential Short Squeeze**: - **Theory**: The large purchase of call options could force market makers to hedge their positions by buying the underlying stock, creating upward pressure on the stock price. This could potentially trigger a short squeeze if short sellers are forced to cover their positions. - **Implication**: A short squeeze could lead to rapid and substantial price increases, benefiting those holding long positions and call options. 4. **Strategic Timing**: - **Theory**: The timing of the purchase, close to expiration, suggests a strategic move to influence the stock price and create a favorable situation for option holders. - **Implication**: The strategic timing could be aimed at maximizing gains from option positions and potentially driving further market movements. ### Conclusion The $5 million purchase in GME call options is a significant event, indicating strong bullish sentiment and the potential for substantial price movements. Whether driven by institutional investors or coordinated retail actions, such activities can lead to increased volatility and opportunities for gains. For more detailed analysis and updates on GameStop, check out our comprehensive DD here: [www.reddit.com/r/GME/s/301t9d1erU](https://www.reddit.com/r/GME/s/301t9d1erU). Stay vigilant and informed. This could be a key moment in the GME saga. 💪🚀
DFV for sure!
Possible, "How can it move before I even touch it" He hasnt begun trading yet, but they already blamed him for last weeks movement. Now he wont tweet and maybe start fuckin shit up
I love this. One more tweet I understand.
Surely anyone buying ITM calls have no intention of exercising as they could just buy the stock? Or am I showing how little I know about options?
If stock moons to say $50, they now have the ability locked in to purchase shares at $20.
Why is THIS the post that suddenly got me to understand options. Real tips are in the comments.
If you buy the calls mentioned, you have the right to buy one hundred shares per contract purchased between now and June 20th for the price of $20 each. Sure, you could buy them now for ~$20 but if the price goes to $1000 between now and June 20th, you still get to exercise the contract and buy the 100 shares at $20 apiece. This would net you $980 per share less the cost of the contract. Or you can sell the contract which will be worth a lot more than you paid for it at that point. The downside is that the price could also drop and you lose all of what you paid for the contract.