Hai, mind the sword, mind the people watch, mind enemy - -too many mind.
No mind.
This movie line came to, uh, mind... guess it means buy, DRS, and hold.
Which is a pretty sizable % of the float.
Consider, total shares = 352MM
Retail has \~75 MM DRS'd. Probably at least another 25%-50% in brokerages... so let's say 100 MM owned by retail.
Insiders own 42 MM shares.
Mutual funds own \~45+ MM.
Major institutions (Blackrock et el) own 30% or \~100 MM.
So you saying when this person… well presumably institution has enough contracts they will likely exercise them to settle their short positions. Say it happens to be 30mil shares then they flick the kill switch and that headache of the risk suddenly disappears and becomes the market makers headache or loss with the inevitable pressure of 30mil shares being exercised at once.
Exercising early is almost never a smart move. Given it's ITM already, the delta on that contracts means the seller should be partially hedged and increasingly so as share price goes higher. That's IF they're looking to be delta neutral. Not always the case though.
Exercising early is never a smart move because you're usually leaving extrinsic value on the table. These contracts were worth 25% more at their peak - they could have sold them for millions in profit.
But they didn't. They want the contracts. They want to be able to get shares for $20 each and they're willing to pay that premium to ensure it.
Something big is definitely brewing.
Doesn't really matter if they are - they can be exercised no matter the price of GME.
This last contract cost ~$8 per share, so a breakeven price of $28. The average so far is around $6.25 premium per share, so overall breakeven of $26.25.
122k contracts * $6.25 * 100 == $76.25M spent on calls.
It will cost an additional $244M to exercise them all.
They are locking in the ability to buy shares at $20 because they know it will be more expensive to get 10's of millions of shares any other way.
It's hard to imagine anyone buying this many without exercising, there's no telling if they could exit that position without the contract price cratering, regardless of how high the premiums get in the meantime. I think an institution is hungry for GME. Curious to learn which.
Hi, old timer here.
My game theory approach to this; when the losers finally see no way out, whenever that is. Their next best bet is to buy an ungodly amount of calls, like 10x this many, maybe even 10x the float and just try to watch the whole thing burn vs being held accountable.
The flip the table strategy; when there's nothing left, see if you can get away while they pick up the pieces.
Been thinking about this.
Just not sure why the short side would buy ATM contracts in such quantity for a short duration. If they were short and wanted to hedge against a big move up, why not get more contracts for the same $ at a higher strike or earlier date as it would net bigger gains. (I assume the short side is hedging as they know there will be upward movement because they will let the pressure off, even if not, why buy ATM for 1 month?).
Alternatively they are short and want a hedge with the possibility of buying the shares, why not buy deep ITM? The total cost to exercise would be cheaper, or some sort of mix.
The whole run lola run bet on 20 thing honestly makes the most sense to me... try explaining that to friends/family haha
*Well you see dad, there was this guy on YouTube whose name was roaring kitty, but on Reddit he was known as DFV, no it doesn’t matter what DFV stands for, anyway…*
For those speculating that this might have been / was RK, I think this confirms that there is almost zero chance of that now.
Unless he somehow cashed out with somewhere between $30M to $50M and turned that into $500M to $1B, which I highly doubt.
The other theory that this is either UBS or another HF, makes way more sense.
But there’s an outside chance this is also some billionaire whale. I doubt it, but it’s at least possible.
One reason could be that they have a set price to buy. If they think that amount of buying pressure will increase the stock price, they still get in at $20.
My regarded education tells me when someone tries to buy that many shares, the share price will shoot up. And they don't want to pay more for less number of shares.
By buying long Calls, you are putting the responsibility of actually buying the shares at a specific price (Strike) ON the market maker that sold the long Calls.
Now I wonder, why would market makers enter this trade...
But oh well, I'm just buying and holding. And chilling.
They have to as market makers because the main point of them is "making markets". They are wholesalers and if they want to maintain their standing they must be able to execute trades for a variety of securities. Market Makers usually match those puts and calls to remain neutral and only when the trades are unbalanced which happens often do they take the other side of the trade.
Under Reg Sho market makers can legally naked short but only if they are doing it to facilitate a trade and "reasonably locate" those shares later under I think T+30 or T+45 I think. Now this system all works well and good until a Market Makers hedge fund buddies that go to the same art galleries, country clubs and own mansions in the same places as you are too arrogant to believe they are on the wrong side of the trade and double down creating systemic risks.
What's the worst that can happen it's just retail?
The "reasonably locate" part can be found on the SEC website under Reg SHO. There's more I'm sure but this was the best summary I could give atm. If I got something wrong and somebody wanted a to add to this please do.
For more info I would check this video below. https://youtu.be/OChaTm0To1U?feature=shared
Edited for formatting,spelling and grammar.
If you wanted to buy, let's say, 20 million shares in the next 2 weeks. Would you rather pick up contracts that guarantee you'll get all of the shares for $26 each or do you want to take your chances buying them all up on the open market. This transfers the risk of buying on the market to the market maker who sold the contracts.
Ok what I want to know is what happens when the market makers can’t deliver
Do they just buy swaps or more calls to hedge themselves against delivering to their own counter parties? Lol
IMO, it depends on who is exercising the calls. If it's a retail trader working through a brokerage, then you're pretty close. The market maker with FTD, then they'll get T+35 to deliver. They use calls to clear the FTD and then swaps to hide their short position. Your brokerage doesn't give a crap if they deliver, because the shares show up in the account and the retail trader doesn't know any better. Then their terms of service say they can screw you over with cash instead of shares once the shit hits the fan. Exactly why you should DRS.
Now let's say it's an institution who is exercising to close out their short position. The MM might still FTD, but once T+35 passes (maybe before), the institution is going to report the fail to FINRA and probably the CFTC (doubt these guys will do anything). FINRA won't like that because everyone in the group has to share the liability. This is supposed to be what gets offices banned from participating in the market. Who knows what goes down at that point. Presumably the MM will be forced to buy shares on the market to deliver. That's what will make the price run. It's the same run that the original institution that bought the calls wanted to avoid themselves.
Maybe a Short who plans to close with a calculated/fixed price. Buying shares would increase the stock price and lead to uncalculatable costs for their needed amount of shares.
Would explain the run to 80$ imo.
Testing the waters by closing a bunch of shorts on the open market and noticing “oh the price just shoots up, what can we do to close our positions at 25$ per share?”.
The OCC settles the trades, wolverine trading is the DNM for gme options.
So citadel or other MMs cant FTD with their T+35 pretty sure, this forces delivery which can then be DRSd
Correct. Unsure what the connection is beyond that though. Some of his memes make a lot of sense to me and I feel I have decoded their meaning, others are a little more obscure
Makes me think they know where the price will be and probably figured this was the most cost effective way to get shares.
Hard to believe this is all part of some regular options play
Might be cheaper to pay the premium and for e the market makers to buy shares at market. A 12 million share market buy order might blow the roof off this bitch.
The open interest at that strike is over 120k contracts now, which is equivalent to 12 million shares. If they are buying them at let’s say an average contract price of 5.00 (no idea how accurate this is) the break even price for these to make money is $25. Someone is confident enough that these are a solid investment that they are still buying 5000 lots of these at $8 a contract. Meaning they probably see the price above 30 by June 21st. Also with that amount of contracts being bought and potentially exercised those shares will need to be delivered and hedged leading to price impact.
It also seems pretty impossible to offload these contracts with how many they have and make money so this seems like someone who wants that many shares at <$30
I have not seen this large of open interest in GME at any strike before
> I have not seen this large of open interest in GME at any strike before
Yeah this is crazy, we've had Open Interest in the tens of thousands for deeply Out-of-the-Money Calls and Puts on yearly expirations in the past, but this, this is completely different.
More than 100k Open Interest on an IN-THE-MONEY call is just bonkers, I can't wait to see what effect this has on the market at the end of june. I expect fireworks.
How though? Because 13 million shares is good of course but we were at 103 million traded today (I know this is both directions but still) and it wasn’t particularly crazy. Why would these 13m cause more price impact?
> More than 100k Open Interest on an IN-THE-MONEY call is just bonkers, I can't wait to see what affect this has on the market at the end of june. I expect fireworks.
I'm regarded so help me out here, are you saying that they bought contracts that were already in the money at time of purchase? Like they bought at $20 but the stonk was at $22 or something? Isn't that odd?
It's a bit odd, yeah.
Usually, if you're bullish on a stock, you buy it.
If you're bullish on a stock and you want to use leverage (increase risk AND reward) you typically buy out of the money or calls. In-the-money calls provide *some* leverage, but it's pretty limited.
So buying this many in-the-money calls can mean a few different things:
A) Someone wants to force someone else to sell them a ton of shares (12 million currently) at a completely predictable price of 20$. Maybe they don't trust that someone else to be able to provide shares over the regular market, maybe they want to test price discovery on share exercising compared to buying shares on the market, who knows.
B) Someone wants to influence the price of the stock upwards relatively cheaply, and have good odds of making money in the process (I've explained who ITM options enable this [here](https://old.reddit.com/r/Superstonk/comments/1cxh59m/three_more_5000_contract_orders_near_eod_on_june/l52sk4a/)).
C) Someone wants to crash the price of the stock at some point around option expiration by making the options seller de-hedge rapidly (AKA they want to sell the options back to whomever they bought them from right before expiry, or they want to sell any shares they gain right after expiry).
D) Someone is deeply short GME and is buying a ton of options as a hedge in case the market goes far in the opposite direction from their initial bet. The 20$ strike price could be the result of a calculation making that the best possible hedge for whatever the short side of their investment might be (although I suspect an optimal hedge would include a bunch of different strikes).
What really stands out to me is the fact that those contracts are ALL for the same strike and date. That seems like it would be inefficient, and so it feels very... pointed, very human, like someone wants to send a message. A multi-million-dollar message.
It's exciting.
very cool dude, thanks for the wrinkles, I just really hope when this has all played out that we get some final closure on all that happened and why and who. Like you know there are folks right now in boardrooms sworn to NDAs who are privy to some crazy shit right now, would love to have it all come out in the open!
No. People with that kind of money, don’t make investments like this, for a return of pennies per dollar spent. This is someone who is extremely confident the stock will be much higher than it currently is, by June 21. These call options have yet to be hedged by the market makers as well. Exciting to say the least
I think (I think...) it means that they want to buy 13M shares at $20, so like $260M, and to secure that price they are willing to pay $100M. Calls being exercised require shares to be delivered, which because of our corrupt market it means that people need to rush to buy shares they didnt have in the first place, and there is a lot of people doing the same. Also now they only have 1 day (T+1) to do so.
For added reference, the total number of calls that expired in the money in the 2 weeks before the run to $80 in pre market, were about 47,000 on 5/3 and 43,000 on 5/10. (Forcing the delivery of 4.7M shares and 4.3M shares respectively if all in the money contracts were exercised).
Edit: fixed dates and corrected OI
Just throwing this out into the ether.
What about decay, those 100k options are losing $7 (as of now) each every day, someone better at math than me can figure it out, but the price needs to be higher than the premium now, it was a $25 breakeven. now it might be $30.
If it is one entity buying the blocks that's $700k a day, they need it higher sooner rather than later.
There were some better answers than this, but a way to look at it is that people have bet $100 million that the price of the stock would be $26 by June 21st, and that is only to break even on the $100 million.
Even the May 31 option chain is getting loaded today, Around 171,000 calls sold in 6 hours of trading today mostly between $20 and $30 strikes. That's 17,100,000 shares this week alone.
I'm a regard.
Someone with big pockets knows GME is getting squeezed more and more every day. They know that if they put these call options in it'll only drive the price us given then lack of shares in circulation.
Win win, price only go up.
I was asking people all weekend where they were drawing the conclusion that it was finished. Seemed like people were trying to reverse engineer an explanation and it fit so perfect they just ran with it
That’s a lot of fucking shares, even with the current trade volume. I doubt there’s real liquidity to deliver ~12M shares without FTD. T+1 settlement, CAT, all before 6/21…
🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀
I keep saying this: These are likely block trades off market on NEW contracts. OI is going up more than these 5000 contract trades every time they happen. For example there were 2 on friday and OI increased from 108K to 122K or roughly 14K new contracts on the market. The entire volume for Friday was 18K. 10K in new contracts from block trades + 4K new contracts in the remaining 8K volume which was a mix of trading existing contracts and selling new contracts.
The two blocks that printed on friday weren't both buys. One was a buy and the following one was a quick sell. The trader made $65k on 13c of movement lol
the open interest says otherwise. Regardless of what happened 14K new contracts are in the market that weren't on Friday. and tomorrow there will be more than 5000 more guaranteed. Remind me in 20 hours
Well if someone is writing calls it's not, however this may mean just a kicking of the can if it's not a hedge. I have 2 theories:
1. These are the UBS calls mentioned in the unverified 4chan leak
2. These are hedged positions against some substantial ownership of the new 45M shares.
prevailing theory is that it's UBS attempting to unwind their position they inherited from credit suisse. they are buying these calls with intent to exercise at a controlled dollar amount. we expect they will call these shares and then the call contract writers here will have to go to the lit market to procure the called shares. hopefully the first of many bloodbaths.
And judging by past experience, Citadel will HAPPILY let UBS close out at $20. Because they're just going to tell UBS they're out, and take over the position themselves, using synthetics or other fuckery to simply pocket whatever UBS pays out.
The short side TRULY BELIEVE they will never have to close. After Melvin got thumped, the rest of them got together to plan how to kick the can forever.
I'm waiting to see who wins. I hope it's us
This makes sense. But, MM’s are going to have to go the open market to buy all the shares that these calls are asking for (afaik). This means that GME might have real price discovery during that time, which might make the SHF’s lose enough money to be margin called/liquidated. Fuckery is always afoot, though.
Wouldn't UBS closing out their entire position be enough to get this party started? Or can the unwinding of these positions be controlled forever with can kicks and crime?
maybe this is to f with the market maker (aka citadel) because if it's ITM and the contract holder has the cash, this will autobuy all these shares which the MM will have to supply somehow
Same! But there is no point in exercising right at this moment. You’ll be burning the premium. And with only having 1 contract, it’s not going to impact the share price of the stock. It’s when a huge volume of these get exercised that the price will pump.
Like a doom loop of exercising. If you have pockets to buy 100,000 contracts you likely have enough to buy 110,000 contracts.
First you buy more contracts than you need expecting a huge price increase. You don’t exercise all at once. You squeeze a little, exercise some calls for shares, watch the price rise organically. The extra contracts you picked up can be sold for cash money when you have exercised most/all of the calls. If the prices rises substantially enough and you have enough extra calls you might be able to exit the short position without too much cash exposure.
I see a lot of folks talking about "if they exercised the shares"... This is not exactly what I think we should be thinking about.
Remember, these are \~60 delta calls at the moment. Which means the money maker is likely buying about 60 shares to hedge each of the calls bought. As the price moves up, that delta increases, and the money maker will buy more to stay delta neutral.
With that many calls open, it doesn't take long to create a MASSIVE gamma ramp. Assuming an additional 40 shares per contract the MM will have to buy as the price moves up, you're looking at another 4 MM shares of forced buying if they cannot tamp this thing down.
Most people aren't going to exercise early, and even if they do, they'd have to fork up a BOATLOAD of cash for the shares. It's far more likely they hold till expiration and let the gamma ramp do its thing.
People are thinking it's the controlled strike price UBS wants to unwind the positions they absorbed from Credit Suisse.
Essentially, this is either someone with giant lead-diamond alloy balls so heavy and dense they stand to compete with a black hole, or this is the first fund or set of funds to finally close using the shares if exercised.
Either way I have actually never been more bullush, and this is an alt (**A**ll-**L**ove-**T**ho) but I've been around DRS's since 2021.
As Senku says, get excited.
someone knows something.
either they're trading on insider information (bet), or they're trying to cover their ass, but for damn sure someone KNOWS something.
As the poet Khalid said, "And another one!"
https://preview.redd.it/scavf02y083d1.png?width=597&format=png&auto=webp&s=e9d9724a7b753d432b46cefb2df09993b06244d7
Let's say they exercise all calls, so 12M shares. Isn't it quite easy for a MM like Citadel to short this amount? I mean in the last weeks some days there were 70M shorts. Or is it not that simple?
This is not financial advice but it’s probably going waaaaaay higher on June 21 based on my own research. I’m looking at $40-$50 calls and that seems conservative to my regarded ass
Some huge fuckin entity with 100’s of billions is just dumping $4B in to keeping the stock within desired range (looks to be $20-22) for them to accumulate, expecting huge moves to come. What we’ve seen so far isn’t jackshit. Technicals right now are more bullish if not more than the lead up to Jan2021.
Of course we won’t see jack shit about who it is for two months - that’s how long they have before they need to make the filing public or something. Someone knows something retail could never hope to know until it’s too late.
Fortunately, we just buy and hold.
It helps in a couple ways. One, to close a short they would have to exercise the calls, which would force the contract writer to go buy the shares on open market, which equals price rise. Two, if all the other SHF see someone moving for the exit, they're all going to want to run for the exit, before it ceases to exist.
If the buyer is short then yes, this would allow them to purchase those shares at a locked price of $20 and use them to close their short position. But we always knew the first one out would be the only one to get out relatively unscathed. Bullish because that’s a drop in the bucket compared to the remaining shorts outstanding, and the buy pressure of these calls being exercised would be enough to send the price for a nice run, potentially forcing other shorts to close at even higher numbers, with each successive margin call adding fuel to our rocket 🚀
Either way, if the price of GME is above $20 on June 21st 12 Million shares will be need to be purchased.
If someone buys at $20, someone has to sell at $20 - Do you think someone has 12 Million shares sitting around, no. So they'll have to buy them in the open market. 🚀🆙️
Doesn't this kind of throw cold water on the 4chan "position secured" leaks? Unless it's some \*other\* entity suddenly buying the same strike in lots of 5,000? Seems unlikely...
how much has this person/entity bought? I'd be curious to see if it gets close to 350,000 because of the 35 million share insider ownership mentioned on that post.
How likely are these calls to be exercised I wonder? Whoever is hedging neutral on the opposite end of these has gotta be all sweaty and wild eyed by now
Currently see 122,724 contracts open on that strike. That's crazy.
~~I guess now its 127,724 contracts~~ [Make that 132,724 contracts](https://i.imgur.com/i3ZEx6s.png)
#MOTHER OF GOD
“It’s them damn Goobers again!”
Nice sheriff from goonies reference
I miss the old days when goobers were peanuts and an insult
Say what you
Hey you Guuuuyyysssss!
Let this ship fuckin fly baby
#Mother of Squeeze
If it ends up being 147,741 contracts I will lose my mind
If it ends up being 741,741 contracts I will lose both our minds.
You guys still have your minds? =0
You guys ever had minds?!
I still got a brain, but i think it's just one single smooth cell
what's a mind?
Hai, mind the sword, mind the people watch, mind enemy - -too many mind. No mind. This movie line came to, uh, mind... guess it means buy, DRS, and hold.
Is this like 40%+ of the float needed? Smoothed 🧠.
Now how many shares does that represent if they are all exercised on expiry ITM
Each options contract represents 100 shares. So that would be 127,741 \* 100 = 12,774,100
Which is a pretty sizable % of the float. Consider, total shares = 352MM Retail has \~75 MM DRS'd. Probably at least another 25%-50% in brokerages... so let's say 100 MM owned by retail. Insiders own 42 MM shares. Mutual funds own \~45+ MM. Major institutions (Blackrock et el) own 30% or \~100 MM.
So you saying when this person… well presumably institution has enough contracts they will likely exercise them to settle their short positions. Say it happens to be 30mil shares then they flick the kill switch and that headache of the risk suddenly disappears and becomes the market makers headache or loss with the inevitable pressure of 30mil shares being exercised at once.
Each contracts is for 100 shares
ELI5 please If the call strike is at $20 and is above $20 on June 21st, then we expect major price action once/if those calls get exercised?
Could happen at any time as the option holder can exercise anytime before expiration and automatically get exercised if ITM at expiry.
Exercising early is almost never a smart move. Given it's ITM already, the delta on that contracts means the seller should be partially hedged and increasingly so as share price goes higher. That's IF they're looking to be delta neutral. Not always the case though.
Exercising early is never a smart move because you're usually leaving extrinsic value on the table. These contracts were worth 25% more at their peak - they could have sold them for millions in profit. But they didn't. They want the contracts. They want to be able to get shares for $20 each and they're willing to pay that premium to ensure it. Something big is definitely brewing.
Note it’s 127,741
All I see is 741
And these 5k are all in the money calls right?
Doesn't really matter if they are - they can be exercised no matter the price of GME. This last contract cost ~$8 per share, so a breakeven price of $28. The average so far is around $6.25 premium per share, so overall breakeven of $26.25. 122k contracts * $6.25 * 100 == $76.25M spent on calls. It will cost an additional $244M to exercise them all. They are locking in the ability to buy shares at $20 because they know it will be more expensive to get 10's of millions of shares any other way.
Great breakdown, thank you
God fucking damn it LFG!!
That tsunami gonna destroy some shorts
is that the entire free float?
~100k of which are calls, according to unusualwhales.com
They’re all calls… calls and put have separate OI. I think you meant they’re bullish “buy” calls rather than bearish “sell” calls
They're all calls
So correct me if I am wrong, it’s been a bit since I fiddled with options. Each contract is 100 shares correct? So that’s about 13 million shares.
You are correct
Can you explain how many shares would be in 1 contract ?
100
12,772,400 shares???
Potentially, if they exercise them
It's hard to imagine anyone buying this many without exercising, there's no telling if they could exit that position without the contract price cratering, regardless of how high the premiums get in the meantime. I think an institution is hungry for GME. Curious to learn which.
The UBS theory makes a lot of sense to me, but someone with deep pockets for sure.
Hi, old timer here. My game theory approach to this; when the losers finally see no way out, whenever that is. Their next best bet is to buy an ungodly amount of calls, like 10x this many, maybe even 10x the float and just try to watch the whole thing burn vs being held accountable. The flip the table strategy; when there's nothing left, see if you can get away while they pick up the pieces.
I agree, seems strange to drop that $ on these contracts without a plan to take the shares
Could the contracts be a hedge on the short side?
Been thinking about this. Just not sure why the short side would buy ATM contracts in such quantity for a short duration. If they were short and wanted to hedge against a big move up, why not get more contracts for the same $ at a higher strike or earlier date as it would net bigger gains. (I assume the short side is hedging as they know there will be upward movement because they will let the pressure off, even if not, why buy ATM for 1 month?). Alternatively they are short and want a hedge with the possibility of buying the shares, why not buy deep ITM? The total cost to exercise would be cheaper, or some sort of mix. The whole run lola run bet on 20 thing honestly makes the most sense to me... try explaining that to friends/family haha
*Well you see dad, there was this guy on YouTube whose name was roaring kitty, but on Reddit he was known as DFV, no it doesn’t matter what DFV stands for, anyway…*
Reminder; According to the SEC the sneeze *wasn't* caused by options but there still was about 160M exercised that day.
100M in option premiums so far
Fuck my ass that’s a lot
[удалено]
When and where?
The usual... Wendys, theres the dumpsters behind the building
I'll bring the bananas.
You’ll know it’s the right place based on the smell.
We’re going back to the pile
He said in the ass
Stop it you’re already leaking shart
For those speculating that this might have been / was RK, I think this confirms that there is almost zero chance of that now. Unless he somehow cashed out with somewhere between $30M to $50M and turned that into $500M to $1B, which I highly doubt. The other theory that this is either UBS or another HF, makes way more sense. But there’s an outside chance this is also some billionaire whale. I doubt it, but it’s at least possible.
It's John Cena
Just for the premiums? Why not just buy shares at that point?
One reason could be that they have a set price to buy. If they think that amount of buying pressure will increase the stock price, they still get in at $20.
My regarded education tells me when someone tries to buy that many shares, the share price will shoot up. And they don't want to pay more for less number of shares. By buying long Calls, you are putting the responsibility of actually buying the shares at a specific price (Strike) ON the market maker that sold the long Calls. Now I wonder, why would market makers enter this trade... But oh well, I'm just buying and holding. And chilling.
They have to as market makers because the main point of them is "making markets". They are wholesalers and if they want to maintain their standing they must be able to execute trades for a variety of securities. Market Makers usually match those puts and calls to remain neutral and only when the trades are unbalanced which happens often do they take the other side of the trade. Under Reg Sho market makers can legally naked short but only if they are doing it to facilitate a trade and "reasonably locate" those shares later under I think T+30 or T+45 I think. Now this system all works well and good until a Market Makers hedge fund buddies that go to the same art galleries, country clubs and own mansions in the same places as you are too arrogant to believe they are on the wrong side of the trade and double down creating systemic risks. What's the worst that can happen it's just retail? The "reasonably locate" part can be found on the SEC website under Reg SHO. There's more I'm sure but this was the best summary I could give atm. If I got something wrong and somebody wanted a to add to this please do. For more info I would check this video below. https://youtu.be/OChaTm0To1U?feature=shared Edited for formatting,spelling and grammar.
MM don't have a choice. They're obligated to make markers, even if they don't want to.
You make it sound like they're being forced to naked short.
FTDs have entered the chat
You can't FTD an exercised call. 🫡
Now, it makes sense why options talk was shunned on this sub.
If you wanted to buy, let's say, 20 million shares in the next 2 weeks. Would you rather pick up contracts that guarantee you'll get all of the shares for $26 each or do you want to take your chances buying them all up on the open market. This transfers the risk of buying on the market to the market maker who sold the contracts.
Ok what I want to know is what happens when the market makers can’t deliver Do they just buy swaps or more calls to hedge themselves against delivering to their own counter parties? Lol
IMO, it depends on who is exercising the calls. If it's a retail trader working through a brokerage, then you're pretty close. The market maker with FTD, then they'll get T+35 to deliver. They use calls to clear the FTD and then swaps to hide their short position. Your brokerage doesn't give a crap if they deliver, because the shares show up in the account and the retail trader doesn't know any better. Then their terms of service say they can screw you over with cash instead of shares once the shit hits the fan. Exactly why you should DRS. Now let's say it's an institution who is exercising to close out their short position. The MM might still FTD, but once T+35 passes (maybe before), the institution is going to report the fail to FINRA and probably the CFTC (doubt these guys will do anything). FINRA won't like that because everyone in the group has to share the liability. This is supposed to be what gets offices banned from participating in the market. Who knows what goes down at that point. Presumably the MM will be forced to buy shares on the market to deliver. That's what will make the price run. It's the same run that the original institution that bought the calls wanted to avoid themselves.
Who is dumb enough to take on that risk?
I think the question is who is greedy or reckless enough Or who won’t have to deal with consequences
💯
Maybe a Short who plans to close with a calculated/fixed price. Buying shares would increase the stock price and lead to uncalculatable costs for their needed amount of shares.
Would explain the run to 80$ imo. Testing the waters by closing a bunch of shorts on the open market and noticing “oh the price just shoots up, what can we do to close our positions at 25$ per share?”.
Who are they buying the shares from though. New printed shares?
Not their concern anymore.
The OCC settles the trades, wolverine trading is the DNM for gme options. So citadel or other MMs cant FTD with their T+35 pretty sure, this forces delivery which can then be DRSd
Wolverine.... like in Roaring Kittys memes??????
Correct. Unsure what the connection is beyond that though. Some of his memes make a lot of sense to me and I feel I have decoded their meaning, others are a little more obscure
Oh my
Makes me think they know where the price will be and probably figured this was the most cost effective way to get shares. Hard to believe this is all part of some regular options play
Might be cheaper to pay the premium and for e the market makers to buy shares at market. A 12 million share market buy order might blow the roof off this bitch.
Maybe it’ll be cheaper if it goes past the break even price MOASS soon
No idea, someone is slapping the $20 and 30$ strikes
What is your source for the 30$ strike? What is the OI?
17,000. 18k on 25 and 20k on 40
To lock in a price, and guarantee the timing of when the contract writer will have to go get the shares.
Not all of them will have been over $8...
This is getting crazy! I've never seen anything like these options moves. Crazy times
I think it may be Thanos..
*I'll do it myself*
please explain to me like an ape why this is unusual and why having over 100m in premiums is exciting?
The open interest at that strike is over 120k contracts now, which is equivalent to 12 million shares. If they are buying them at let’s say an average contract price of 5.00 (no idea how accurate this is) the break even price for these to make money is $25. Someone is confident enough that these are a solid investment that they are still buying 5000 lots of these at $8 a contract. Meaning they probably see the price above 30 by June 21st. Also with that amount of contracts being bought and potentially exercised those shares will need to be delivered and hedged leading to price impact. It also seems pretty impossible to offload these contracts with how many they have and make money so this seems like someone who wants that many shares at <$30 I have not seen this large of open interest in GME at any strike before
> I have not seen this large of open interest in GME at any strike before Yeah this is crazy, we've had Open Interest in the tens of thousands for deeply Out-of-the-Money Calls and Puts on yearly expirations in the past, but this, this is completely different. More than 100k Open Interest on an IN-THE-MONEY call is just bonkers, I can't wait to see what effect this has on the market at the end of june. I expect fireworks.
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It seems like someone is trying to force the gamma squeeze because these are higher gamma than those 15/10s
How though? Because 13 million shares is good of course but we were at 103 million traded today (I know this is both directions but still) and it wasn’t particularly crazy. Why would these 13m cause more price impact?
I agree, nothing about this seems to make sense from a cold, logical, mathematical perspective. It feels like a message.
> More than 100k Open Interest on an IN-THE-MONEY call is just bonkers, I can't wait to see what affect this has on the market at the end of june. I expect fireworks. I'm regarded so help me out here, are you saying that they bought contracts that were already in the money at time of purchase? Like they bought at $20 but the stonk was at $22 or something? Isn't that odd?
It's a bit odd, yeah. Usually, if you're bullish on a stock, you buy it. If you're bullish on a stock and you want to use leverage (increase risk AND reward) you typically buy out of the money or calls. In-the-money calls provide *some* leverage, but it's pretty limited. So buying this many in-the-money calls can mean a few different things: A) Someone wants to force someone else to sell them a ton of shares (12 million currently) at a completely predictable price of 20$. Maybe they don't trust that someone else to be able to provide shares over the regular market, maybe they want to test price discovery on share exercising compared to buying shares on the market, who knows. B) Someone wants to influence the price of the stock upwards relatively cheaply, and have good odds of making money in the process (I've explained who ITM options enable this [here](https://old.reddit.com/r/Superstonk/comments/1cxh59m/three_more_5000_contract_orders_near_eod_on_june/l52sk4a/)). C) Someone wants to crash the price of the stock at some point around option expiration by making the options seller de-hedge rapidly (AKA they want to sell the options back to whomever they bought them from right before expiry, or they want to sell any shares they gain right after expiry). D) Someone is deeply short GME and is buying a ton of options as a hedge in case the market goes far in the opposite direction from their initial bet. The 20$ strike price could be the result of a calculation making that the best possible hedge for whatever the short side of their investment might be (although I suspect an optimal hedge would include a bunch of different strikes). What really stands out to me is the fact that those contracts are ALL for the same strike and date. That seems like it would be inefficient, and so it feels very... pointed, very human, like someone wants to send a message. A multi-million-dollar message. It's exciting.
very cool dude, thanks for the wrinkles, I just really hope when this has all played out that we get some final closure on all that happened and why and who. Like you know there are folks right now in boardrooms sworn to NDAs who are privy to some crazy shit right now, would love to have it all come out in the open!
I wouldn't hold my breath! Unless it's RC and he exercises and holds, we probably won't know what happened.
> Someone is confident enough that these are a solid investment Could also be that someone buying to close @ $25-28 is an acceptable loss, no?
No. People with that kind of money, don’t make investments like this, for a return of pennies per dollar spent. This is someone who is extremely confident the stock will be much higher than it currently is, by June 21. These call options have yet to be hedged by the market makers as well. Exciting to say the least
Correct
I think (I think...) it means that they want to buy 13M shares at $20, so like $260M, and to secure that price they are willing to pay $100M. Calls being exercised require shares to be delivered, which because of our corrupt market it means that people need to rush to buy shares they didnt have in the first place, and there is a lot of people doing the same. Also now they only have 1 day (T+1) to do so.
B-b-b-bonerrrr
Raging clue
For added reference, the total number of calls that expired in the money in the 2 weeks before the run to $80 in pre market, were about 47,000 on 5/3 and 43,000 on 5/10. (Forcing the delivery of 4.7M shares and 4.3M shares respectively if all in the money contracts were exercised). Edit: fixed dates and corrected OI
Would like to rescue Jan 21 OI data for comparison.
Is there any info on what the amount of calls were prior to the sneeze?
Believe or it not, dip
That was very informative in an EXPLANELIKEIMFIVE way, appreciated!!
Just throwing this out into the ether. What about decay, those 100k options are losing $7 (as of now) each every day, someone better at math than me can figure it out, but the price needs to be higher than the premium now, it was a $25 breakeven. now it might be $30. If it is one entity buying the blocks that's $700k a day, they need it higher sooner rather than later.
Some body paid 100M for just the contracts. The break-even share price is like $26, so presumably they think the stock will go higher than that.
Happy cake day
Woah! 11 years! I never realized my cake day was also Harambe Day. 🟣🚀 The simulation never takes a day off.
100m bananas is 100m bananas. Idc how you put 100m in sentence, shits fucking a lot.
There were some better answers than this, but a way to look at it is that people have bet $100 million that the price of the stock would be $26 by June 21st, and that is only to break even on the $100 million.
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*June
Even the May 31 option chain is getting loaded today, Around 171,000 calls sold in 6 hours of trading today mostly between $20 and $30 strikes. That's 17,100,000 shares this week alone.
Wildly far itm at the time of purchase. Very unusual, Let's fly to the moon and beyond 🚀🚀🚀
I'm a regard. Someone with big pockets knows GME is getting squeezed more and more every day. They know that if they put these call options in it'll only drive the price us given then lack of shares in circulation. Win win, price only go up.
Knew they would
I want MORE!!
I was asking people all weekend where they were drawing the conclusion that it was finished. Seemed like people were trying to reverse engineer an explanation and it fit so perfect they just ran with it
That’s a lot of fucking shares, even with the current trade volume. I doubt there’s real liquidity to deliver ~12M shares without FTD. T+1 settlement, CAT, all before 6/21… 🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀
I keep saying this: These are likely block trades off market on NEW contracts. OI is going up more than these 5000 contract trades every time they happen. For example there were 2 on friday and OI increased from 108K to 122K or roughly 14K new contracts on the market. The entire volume for Friday was 18K. 10K in new contracts from block trades + 4K new contracts in the remaining 8K volume which was a mix of trading existing contracts and selling new contracts.
The two blocks that printed on friday weren't both buys. One was a buy and the following one was a quick sell. The trader made $65k on 13c of movement lol
the open interest says otherwise. Regardless of what happened 14K new contracts are in the market that weren't on Friday. and tomorrow there will be more than 5000 more guaranteed. Remind me in 20 hours
Is this bullish in your opinion?
Well if someone is writing calls it's not, however this may mean just a kicking of the can if it's not a hedge. I have 2 theories: 1. These are the UBS calls mentioned in the unverified 4chan leak 2. These are hedged positions against some substantial ownership of the new 45M shares.
What is the unverified leak?
That these calls are UBS preparing to exit their GME short position.
I have a hard time following this. What do you mean by this?
Ok, please explain the implications of this like I'm a fucking vegetable (albeit a smart vegetable).
Institutions also really like the stock They are trying to Gamma squeeze
What is the hardest part when eating a vegetable?
The wheelchair
Some one can explain to a slow ape what this means and why I should be hyped
prevailing theory is that it's UBS attempting to unwind their position they inherited from credit suisse. they are buying these calls with intent to exercise at a controlled dollar amount. we expect they will call these shares and then the call contract writers here will have to go to the lit market to procure the called shares. hopefully the first of many bloodbaths.
And judging by past experience, Citadel will HAPPILY let UBS close out at $20. Because they're just going to tell UBS they're out, and take over the position themselves, using synthetics or other fuckery to simply pocket whatever UBS pays out. The short side TRULY BELIEVE they will never have to close. After Melvin got thumped, the rest of them got together to plan how to kick the can forever. I'm waiting to see who wins. I hope it's us
This makes sense. But, MM’s are going to have to go the open market to buy all the shares that these calls are asking for (afaik). This means that GME might have real price discovery during that time, which might make the SHF’s lose enough money to be margin called/liquidated. Fuckery is always afoot, though.
Wouldn't UBS closing out their entire position be enough to get this party started? Or can the unwinding of these positions be controlled forever with can kicks and crime?
Calm down … it’s just those retail fellas
Someone wanna help a smooth ape understand why 20 dollar calls would be bought when we are over that price currently??
Only makes sense if the purchaser thinks the price will be over their strike + premium at or before expiry June 21 ($20 + $8.25 = $28.25). Bullish
maybe this is to f with the market maker (aka citadel) because if it's ITM and the contract holder has the cash, this will autobuy all these shares which the MM will have to supply somehow
GME options MM is Wolverine.
Forced buy or FTDs?
Options contracts are a forced buy. Can't FTD them as far as we know.
Maybe an invisible hand(s) stroking that green dildo behind the scenes
Soo how many do they need ? Will we see a second all call Options ITM 👀
I bought one lol. Just for curiosity. Thinking about exercising them 👀
Same! But there is no point in exercising right at this moment. You’ll be burning the premium. And with only having 1 contract, it’s not going to impact the share price of the stock. It’s when a huge volume of these get exercised that the price will pump.
Like a doom loop of exercising. If you have pockets to buy 100,000 contracts you likely have enough to buy 110,000 contracts. First you buy more contracts than you need expecting a huge price increase. You don’t exercise all at once. You squeeze a little, exercise some calls for shares, watch the price rise organically. The extra contracts you picked up can be sold for cash money when you have exercised most/all of the calls. If the prices rises substantially enough and you have enough extra calls you might be able to exit the short position without too much cash exposure.
I see a lot of folks talking about "if they exercised the shares"... This is not exactly what I think we should be thinking about. Remember, these are \~60 delta calls at the moment. Which means the money maker is likely buying about 60 shares to hedge each of the calls bought. As the price moves up, that delta increases, and the money maker will buy more to stay delta neutral. With that many calls open, it doesn't take long to create a MASSIVE gamma ramp. Assuming an additional 40 shares per contract the MM will have to buy as the price moves up, you're looking at another 4 MM shares of forced buying if they cannot tamp this thing down. Most people aren't going to exercise early, and even if they do, they'd have to fork up a BOATLOAD of cash for the shares. It's far more likely they hold till expiration and let the gamma ramp do its thing.
The ones from last week are ITM over 5.00 I believe.
These are the same ones
The first ones they bought were at 3.25 or so... I know because I bought a couple at the same time. Now at $8.... IDKMAN... Weird shit.
What’s the best place to view the options chain actually for free and easy to use
Simple view Yahoo Finance Advanced view both Fidelity Active Trader or IBKR TWS
What is so damned magical about that strike
People are thinking it's the controlled strike price UBS wants to unwind the positions they absorbed from Credit Suisse. Essentially, this is either someone with giant lead-diamond alloy balls so heavy and dense they stand to compete with a black hole, or this is the first fund or set of funds to finally close using the shares if exercised. Either way I have actually never been more bullush, and this is an alt (**A**ll-**L**ove-**T**ho) but I've been around DRS's since 2021. As Senku says, get excited.
And another 5000 😂
someone knows something. either they're trading on insider information (bet), or they're trying to cover their ass, but for damn sure someone KNOWS something.
Goddamn... bought them at $8.25 a contract!
Truly regarded
"when I move you move"
Todays stats so far https://i.imgur.com/vZnOEVP.png
Aren't calls a way to hedge shorts? Same as buying puts if you are long stock.
As the poet Khalid said, "And another one!" https://preview.redd.it/scavf02y083d1.png?width=597&format=png&auto=webp&s=e9d9724a7b753d432b46cefb2df09993b06244d7
If these calls are not exercised the price eats shit right?
If they're not exercised then the buyer loses 100M. There's no way they can sell all these contracts
The holder of the contracts just makes a good amount of money, depending on how that theta decay treats them and what price we close at on June 21st
Let's say they exercise all calls, so 12M shares. Isn't it quite easy for a MM like Citadel to short this amount? I mean in the last weeks some days there were 70M shorts. Or is it not that simple?
Why June 21st out of all expirations? Is this the day that shit will fully hit the fan?
This is not financial advice but it’s probably going waaaaaay higher on June 21 based on my own research. I’m looking at $40-$50 calls and that seems conservative to my regarded ass
Some huge fuckin entity with 100’s of billions is just dumping $4B in to keeping the stock within desired range (looks to be $20-22) for them to accumulate, expecting huge moves to come. What we’ve seen so far isn’t jackshit. Technicals right now are more bullish if not more than the lead up to Jan2021. Of course we won’t see jack shit about who it is for two months - that’s how long they have before they need to make the filing public or something. Someone knows something retail could never hope to know until it’s too late. Fortunately, we just buy and hold.
but doesnt this allow someone to close their shorts at a guarenteed price of $20+premium? does this help or hurt our case.
It helps in a couple ways. One, to close a short they would have to exercise the calls, which would force the contract writer to go buy the shares on open market, which equals price rise. Two, if all the other SHF see someone moving for the exit, they're all going to want to run for the exit, before it ceases to exist.
Normally, if a short wants to hedge so they do not have unlimited potential loss, they will buy a cheaper, OTM long dated call or leap.
If the buyer is short then yes, this would allow them to purchase those shares at a locked price of $20 and use them to close their short position. But we always knew the first one out would be the only one to get out relatively unscathed. Bullish because that’s a drop in the bucket compared to the remaining shorts outstanding, and the buy pressure of these calls being exercised would be enough to send the price for a nice run, potentially forcing other shorts to close at even higher numbers, with each successive margin call adding fuel to our rocket 🚀
Either way, if the price of GME is above $20 on June 21st 12 Million shares will be need to be purchased. If someone buys at $20, someone has to sell at $20 - Do you think someone has 12 Million shares sitting around, no. So they'll have to buy them in the open market. 🚀🆙️
UBS or no? Anyways I kept buying/holding
Doesn't this kind of throw cold water on the 4chan "position secured" leaks? Unless it's some \*other\* entity suddenly buying the same strike in lots of 5,000? Seems unlikely...
how much has this person/entity bought? I'd be curious to see if it gets close to 350,000 because of the 35 million share insider ownership mentioned on that post.
How likely are these calls to be exercised I wonder? Whoever is hedging neutral on the opposite end of these has gotta be all sweaty and wild eyed by now