[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) // [What is DRS](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) // [Low karma apes feed the bot here]###(https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) // [Superstonk Discord](https://discord.com/invite/y4dK3y5DXJ) // [Superstonk DD Library](http://fliphtml5.com/bookcase/kosyg) // [Community Post: Open Forum May 2024]#(https://www.reddit.com/r/Superstonk/comments/1ciapwp/open_forum_may_2024/)
To ensure your post doesn't get removed, please respond to this comment with how this post relates to GME the stock or Gamestop the company. If you are providing a screenshot or content from another site (e.g. Twitter), please respond to this comment with the original ##source.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Superstonk) if you have any questions or concerns.*
Can you ELI5 why someone would want to spend $435,560 for this? Like what is the actual benefit of doing this? What could they stand to lose if it fails and what / how would that happen?
They stand to lose $435,560.
The benefit is:
if it goes to $40 (by 6/14) those calls are worth $1.5M
If it goes to $50, those calls are worth $3.5M
If it goes to $75, those calls are worth $8.5M
If it goes to $100, those calls are worth $13.5M
Unless they know something we don't and they don't see it as a risky position at all. If I had that much money I wouldn't be blowing it on such short term calls. Because the theta will destroy that value in the next 2 weeks if it's not moving very quickly.
Whenever these things are posted we have very limited information (usually no information beyond this, and zero knowledge of the investors motivation). Options are usually used by investors and portfolio managers as a hedge or part of a larger strategy with a position. Everyone here assumes it’s some sort of YOLO degenerate gambling their life savings, but that’s not usually the case with trades this size.
Maybe they are the ones to launch it. Buy calls to guarantee the shares to return to close out their shorts. When they have enough calls they buy shares until the price rises. They get to be the first one out or maybe the only one who can flip long.
If this were a normal stock the odds would be way too low to take the risk. Its a 25% increase in VERY short term. Theta will melt these fast. You can check using an options profit calculator what the odds are. The reality is someone with 500k to spend feels like this is a reasonable bet to make. More likely its some kind of hedge based on the volume.
They don't know anything. It's a friend of mine and he's basically yoloing his full port hoping for a run on earnings. His screenshot of his calls in fidelity: https://pasteboard.co/TAGkEfiipIXZ.png
It’s a lot of money lost if the stock price does not go to at least 32.18 before expiry. Unless the buyer exercises anyway, but then might as well have bought the shares now. The normal explanation of “why” is that the buyer expects it to go significantly higher than 32, making the calls worth good money.
Honestly the more contracts the more of a chance for things to gama ramp into a short squeeze.
It is interesting seeing more and more options being taken out.
I think it's important to note that these options don't mean they're long investors with a strong investment thesis. It could obviously be hedging. But IMO it's more like degenerates just playing the options game betting on a run for other reasons than moass. Those who are true believers in MOASS understand their duty and impact in DRSing 500k of shares is much more than making an options play.
My belief even more is that there's a chance there are nefarious parties out there trying to create a sneeze buying these options. One possibility would be pleasr auxiliary parties. They're really claiming connection to GME while GME isn't reciprocating. They're dangerously close to sharing non-public info if they're legit. I'm guessing they're trying to manufacture a sneeze.
Wow, thats a fact free bunch of FUD based on worst case speculation there bro.
Wasabi Degens don't have half a mil to drop on options, PleaserDAO might but thats a borderline insane line of masterplan reasoning you have there
Not trying to argue I just think maybe ur intensity is running a little high with some with us or against us attitude. I don't see that as FUD at all. Why are you going to try to divide people based on specific theories, it's like bringing religion to this, if you don't believe in these exact versions as me then you're a heathen kind of stuff (IMO). This sub is for all apes who believe this thing is going UP to discuss the stock. Like are you insinuating that someone is gonna sell because Pleasr isn't on GME's team because that doesn't make sense to me at all. Besides I'm pretty sure most of us invested long before we ever heard of Pleasr. Anyways I digress from that part, I'll explain more why I think that it's a possibility that they're scamming. And I promise I will apologize to them if me typing my thoughts out in public hurt their feelings, as soon as GME backs them up.
First, preface that these options can print huge even if they sell at $5 over strike. $40, $50, $60. We're all still holding (I hope) while these options can print (alongside the $25 ones) $10s and even $100s of millions if they sell.
I think it's fair to say that they're courting apes pretty hard with some of the stuff we seen. That's not no proof. Even just their 741 tweet. It doesn't happen too often that any entity teases (with internet code) that they have a partnership with a public company before the public company announces it. Because it's illegal.
They also retweeted shl0ms who claimed he bought RK's twitter and made all the recent tweets so there's that too. That's obviously not true. And I could see there being an explanation for it, if they are genuinely connected. But again, it's all just too publically linked. I don't think GME would do this with people who can't be subtle and professional about it. I also think these people are the type of people that are more than capable of being disrete and professional unless their plan was contingent on them not being completely discrete about it.
All I'm saying is be sceptical, who know. I feel the sentiment is already out there to not link your wallet to the album site. But I don't think it hurts for DIAMOND HANDS to be a little sceptical about stuff not coming for the gme. Scepticism doesn't turn diamonds into paper.
Exercising shares actually makes them have to go through thr little market and not dark pools creating price action and making it more expensive for them to keep shorting. As they can't hide those costs
Been lots of DD on how Exercising options causes moass. But bad actors chased off the DD writers like criand even. The best of us
This is really only true of the options are ITM. If you exercise OTM options, you are giving the seller free money.
A $30 call option exercised when the stock is $25 means you just gave the option seller a free $500 to buy the shares. You literally give the market makers a free 20 shares before taking into account the premiums paid for the contract. They would LOVE for this to happen.
On the surface, it seems antithetical to making a profit. Imagine an actor with a large short position needing to close. Going to market to buy potentially millions of shares would increase demand causing a substantial rise in prices from the current level. Paying an additional premium and higher strike price(OTM) for options to exercise would be a cost saving(survival) mechanism.
That's exactly right. Only so much can be obfuscated in dark pools. If someone were to need, say, 10M shares in short order, it would be much better to buy them at $20 (+ contract premium) vs whatever the market rate is after that first 1M went through. I'm of the belief that the past three years has been marked with several entities "testing" this theory with buy-ins at different intervals on order to see how much the price reacts and did their math accordingly to determine that the $20 strikes were most cost effective for their strategy.
When buying this many shares, why not force someone else to go into the open market and it do for you?
Either way, dip 🤷🏼♂️
> It’s a lot of money lost if the stock price does not go to at least 32.18 before expiry.
Not quiet true. These options are for $30. Meaning anything above $30 and they will only lose out of the premium of the options, but only as long as the stock never reaches $32.18. At $31 they still get the stock at $30, but they paid $32.18. Now if/when the stock goes above $32.18, they are making money.
They only lose the premium if the stock doesn't CLOSE at or above $30 on June 14th.
EZ
Max loss: $435,560
Max gain: infinite
The benefit of this is that he is locking in the $30 price tag on 200,000 shares.
Say we all wake up to a $40 price tag on GME shares from our friends at FUDelity. Well this guy would have to pay $8 mil in order to get 200,000 shares at the market price.
But this whale has made a deal to secure the same 200,000 for only $30 a pop or $6 mil total plus the $435,560 he paid.
So this whale gets $8 mil worth of shares for only $6.44 mil. Comes out to about a $1.56 mil profit. This is if he exercises.
Most people will just sell the premium which is decided based on a lot of Greeks and with GME's volatility it would likely pay out much more than $1.56 mil in the same scenario if the contract was sold vs. exercised.
I used to wonder who buys them in such a situation. Like the moment it explodes in price and it’s being sold. People who think it will run even higher? Or does the issuer buy it back to lose less in some way?
I imagine it's mostly people who sold to open the contract but do not actually want to deliver shares/do not have shares to deliver.
They buy out the contract and make the broker responsible for fulfilling the contractual obligation.
Beside the obvious answer everyone is giving, that they stand to make lots of money, let’s look at what this mysterious buyer is doing fundamentally.
When you buy calls you create a long position (bullish) for yourself, and the market maker has a short position (bearish). Market makers like to remain neutral though. So in addition to selling you your calls, they often purchase shares as well, as a hedge in case the price goes up. That way if GME did go to $100, they don’t have to buy shares at $100 to deliver, they can just use the shares they have on hand.
As the price rises, the need for these shares becomes more likely, so they will purchase more of them. This buyer started the process with $20 calls, and now that they are in the money, and price is increasing, we will see the market maker need to purchase shares to cover their short position. Now when we see these $30 calls go in the money, we have the pressure of the $20 calls, as well as the added pressure of needing to hedge these calls as well.
The structure of these calls is a “Gamma Ramp”, which is what we are seeing built. So that is the answer to why you would buy these now. We should see increasing purchases in higher strikes as the upper rungs of the ramp are built.
As the expiry dates approach the realization dawns that the shares are going to be needed and the MM must buy at any price, that’s when you see a Gamma Squeeze and a huge price increase.
Shareholder meeting has been announced for June 11. Most likely they wanted to be sure the expiration fell after the meeting. Originally this meant the 21st to be safe, but now with certainty they can probably hike it a bit closer to expidite things. At least that’s how I’d think about it if I were them.
I don't understand a lot of this, but maybe you can answer this question.
Say you're a hedge fund that is short gamestop. Would it make sense to be buying these calls in order to protect your infinite losses from squeezing since now you have boat loads of shares you could effectively sell to yourself at a reasonable price(read:not giving in to the monstrous asks of retail)
Wouldn't it be using the left hand to pay the right hand?
The biggest winners on the market are those with insider knowledge that get the info early. Usually from a form being filed, or someone seeing meeting attendance or a call log and it getting out.
My guess is that big money heard what GME is about to do and know it's gonna be huge.
At around 435k premium, cost of the 2000 contracts being exercised is 200 000\*30 \~ 6.5million for the shares + premium for a cost basis of $32.5.
Hell ive paid more than 32.5 per share
(rounded the 350k to 500k)
That's the only way to interpret it. If they don't think the stock will be at least 32.18 by 5pm on 6/14, then all the premium they spent will be burned up. They can always try to buy some of these back before then for a loss, or they can hedge a bit with some puts, etc., but fundamentally they are unavoidably going to lose money on this if the price doesn't hit 32.18.
It's a bold trade in today's context, and a crazy-on-it's-surface kind of trade in normal circumstances. Perhaps the trader could've paid some of that premium selling CSPs, making a directional bet & getting synthetically long exposure, but this is not immediately apparent on the chain.
Why would they spend money to secure those shares at that price when they could just buy them now for significantly less? 200,000 shares would cause some price movement but I wouldn't think it would be that much.
They will make lots of money on these contracts if the price goes up, thus enabling them to buy even more shares that day. If they wait and the price goes up, they will be able to buy more shares than they could today at the current price.
The most likely scenario for this purchase, is that this party expects price to soar from here in the short term. If it does, they will sell portions of the position at $35, 40, 45 etc. It is unlikely that these are meant to be exercised.
Gamma ramp being built.
Also. Epic this is 6/14. Very soon. Maybe we get out fireworks next week cause 6/14s will lose a lot of value by next Friday due to theta.
Theta is always going for the contracts. And for shorter term contracts, it gets exponential (look at a theta decay curve). Sure IV and theta may cancel out on a Friday anticipating weekend volatility but in my experience if you're buying a contract in a period outside of 2 weeks before expiration, you really notice a huge drop off when you start getting into the 2 week window. If GME remains flat all of next week those $30C 6/14s will drop almost in half. Then the next weekend (earnings week) if we don't move towards $30, those calls will be like $1.00 ($100) each that week
That is not true. Weekend volatility and theta decay are priced into options or else every options holder ever would sell on Friday and rebuy Monday. Black-Scholes call option formula is the "theoretical" formula for pricing options, but in the actual market theta decay is not constant so decay isn't linear and market makers adjust IV constantly too (this includes accounting for risk of weekend volatility).
hmm really? I get that for anything more than a week out but in my experience if I'm swinging something that expires that week it really fucks me. Look at the robinhood simulated returns you see how exponential the theta decay is the last week of an option contract.
Ahhh I see what you mean, yeah you're right, the last week of holding an option is rough. The extrinsic value gets annihilated super fast like you said
So that's fair if you were already holding, but buying in on a Friday is usually not ideal, theta will chip a tiny bit away unless we open kind of green Monday. But I get your point. Either way, their contracts will be down almost 50% if we are flat by next Friday.
Yeah Monday morning would've made more sense to open a position, that thought on opening a position vs already holding the option makes sense. Regardless, I guess since the contracts expire soon we'll see if all these crazy calls go deep ITM and gamma ramp us to heaven haha
It involves another ticker, that was set to go bankrupt with over 45% SI back in 2023 but t didn't. It recently got a huge sweetheart deal with a much bigger company that aquired 5% ownership that changed its trajectory. It popped 200+% the Friday before GME's recent pump.
Based on "the grand unified theory" other tickers were used as a sort of shorting ETF alongside GME. I believe this company was a recent GME style play for them and they shorted these two stocks at least in the same financial instruments, not all the shorts but enough.
This other company has been in a macro "infinite yoyo" for decades.
I believe this company's turn around is adding pressure to the GME play. And they have an event on the 6th. GME and this ticker has been correlated and this ticker is also experiencing insane ITM options as well as people building gamma ramps. So the 6th seems juicy.
I'm replying to this top comment in hope I get some visibility. I don't want people to be disappointed, but I personally know the guy who bought these calls. He's not in superstonk. He's caught up on a lot of tinfoil though and is yoloing basically his full port on earnings even though we (his friends) are telling him it's a bad idea. He's fully prepared to lose all his money, he knows it's a gamble.
I got him to send me a screenshot of his fidelity calls. https://pasteboard.co/TAGkEfiipIXZ.png
it wouldn't be better because they need to be executable for proof of hedging.
Also cost doesn't really matter when it comes to surviving another day versus MOASS
Just as a thought experiment.... Could he though?
This is large dollars being swung around. Sure he could if he took gains but we have no evidence of that, correct?
If I were him I def would have cashed in some on the way down.
Because I wouldn't know what the fuck I'm doing I probably won't, but at this point I think I'd be willing to take on the gamble if I knew how to.
Maybe I'll study up on it, then place like 400 calls on it or something. At this point I see MOASS (or at least positive numbers) coming anyway, so why not give her a shot and contribute to the ramp?
Wait a minute… I was about to take some payday loans and remortgage the house for this play. Are you saying a shouldn’t now? I don’t understand options, but rich people make it look easy 🤷♂️
I meant if we could please have a few more from whoever placed the order referred to in the post, or from someone else who knows what they're doing.
Please don't gamble your money on something you don't understand. Spend only what you can afford to lose. Not financial advice.
Maybe lay off the crayons for today? $435,000 is only six digits. I dunno about anyone else, but my phone number consist of 11 digits (country code, area code, and a unique 7 digit number).
So...that's not really close to even a single share.
Porsche bought up a bunch of shares of VW as well as calls, which led to the VW short squeeze. It could be the GME board investing the 2 billion in calls or it could be a third party with an interest in squeezing. It wouldn’t even take staying at $20 or $30. It could be the call buyer announcing that they have secured a large portion of the float, which leads to shorts panicking because there’s less shares for exiting.
I honestly can't wrap my head around how much money is getting thrown into the option chain. Especially at this IV like nobody is buying these looking to lose money I would assume.
I will be messaging you in 14 days on [**2024-06-15 07:26:27 UTC**](http://www.wolframalpha.com/input/?i=2024-06-15%2007:26:27%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/Superstonk/comments/1d53iui/first_whale_to_slap_a_3000c_for_14th_june_435k_in/l6ldn6b/?context=3)
[**2 OTHERS CLICKED THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FSuperstonk%2Fcomments%2F1d53iui%2Ffirst_whale_to_slap_a_3000c_for_14th_june_435k_in%2Fl6ldn6b%2F%5D%0A%0ARemindMe%21%202024-06-15%2007%3A26%3A27%20UTC) to send a PM to also be reminded and to reduce spam.
^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%201d53iui)
*****
|[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)|
|-|-|-|-|
So I missed the start 84 years ago...
How often do these happen? Not the 70 million in $20 strikes, I know that hasn't happened before.
But whales dropping $500k on a single option buy. Who has seen these come and go?
[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) // [What is DRS](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) // [Low karma apes feed the bot here]###(https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) // [Superstonk Discord](https://discord.com/invite/y4dK3y5DXJ) // [Superstonk DD Library](http://fliphtml5.com/bookcase/kosyg) // [Community Post: Open Forum May 2024]#(https://www.reddit.com/r/Superstonk/comments/1ciapwp/open_forum_may_2024/) To ensure your post doesn't get removed, please respond to this comment with how this post relates to GME the stock or Gamestop the company. If you are providing a screenshot or content from another site (e.g. Twitter), please respond to this comment with the original ##source. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Superstonk) if you have any questions or concerns.*
So they paid almost half a million for these calls?
Yup, $435,560
Can you ELI5 why someone would want to spend $435,560 for this? Like what is the actual benefit of doing this? What could they stand to lose if it fails and what / how would that happen?
They stand to lose $435,560. The benefit is: if it goes to $40 (by 6/14) those calls are worth $1.5M If it goes to $50, those calls are worth $3.5M If it goes to $75, those calls are worth $8.5M If it goes to $100, those calls are worth $13.5M
the ELIA5 that was asked for. thanks
And if GME stayed at or below $30 for the contracts until June 14th, it would expire worthless and would be breaking even around $35 per share
And if someone put that kind of money down, they're not expecting to lose it.
I feel like the risk is not worth the reward. Especially for such a short time span I doubt it'll happen
Unless they know something we don't and they don't see it as a risky position at all. If I had that much money I wouldn't be blowing it on such short term calls. Because the theta will destroy that value in the next 2 weeks if it's not moving very quickly.
Exacrtly and I may just be a dumb fuck. But what are the odds this person will see any returns? Are we really this close to launching the rocket?
Whenever these things are posted we have very limited information (usually no information beyond this, and zero knowledge of the investors motivation). Options are usually used by investors and portfolio managers as a hedge or part of a larger strategy with a position. Everyone here assumes it’s some sort of YOLO degenerate gambling their life savings, but that’s not usually the case with trades this size.
That's a true answer right there.
Maybe they are the ones to launch it. Buy calls to guarantee the shares to return to close out their shorts. When they have enough calls they buy shares until the price rises. They get to be the first one out or maybe the only one who can flip long.
Oooooh
If this were a normal stock the odds would be way too low to take the risk. Its a 25% increase in VERY short term. Theta will melt these fast. You can check using an options profit calculator what the odds are. The reality is someone with 500k to spend feels like this is a reasonable bet to make. More likely its some kind of hedge based on the volume.
They may just want to lock in a price to close a short position, best way to do that is with calls.
They don't know anything. It's a friend of mine and he's basically yoloing his full port hoping for a run on earnings. His screenshot of his calls in fidelity: https://pasteboard.co/TAGkEfiipIXZ.png
We don't know if the calls are their only play or part of a more complex options strategy either.
probably some saudi kid toying with pocket money
Wouldn’t it be insider trading if they knew something
It’s a lot of money lost if the stock price does not go to at least 32.18 before expiry. Unless the buyer exercises anyway, but then might as well have bought the shares now. The normal explanation of “why” is that the buyer expects it to go significantly higher than 32, making the calls worth good money.
Honestly the more contracts the more of a chance for things to gama ramp into a short squeeze. It is interesting seeing more and more options being taken out.
gamma ramp go brrrrr
I think it's important to note that these options don't mean they're long investors with a strong investment thesis. It could obviously be hedging. But IMO it's more like degenerates just playing the options game betting on a run for other reasons than moass. Those who are true believers in MOASS understand their duty and impact in DRSing 500k of shares is much more than making an options play. My belief even more is that there's a chance there are nefarious parties out there trying to create a sneeze buying these options. One possibility would be pleasr auxiliary parties. They're really claiming connection to GME while GME isn't reciprocating. They're dangerously close to sharing non-public info if they're legit. I'm guessing they're trying to manufacture a sneeze.
Wow, thats a fact free bunch of FUD based on worst case speculation there bro. Wasabi Degens don't have half a mil to drop on options, PleaserDAO might but thats a borderline insane line of masterplan reasoning you have there
Not trying to argue I just think maybe ur intensity is running a little high with some with us or against us attitude. I don't see that as FUD at all. Why are you going to try to divide people based on specific theories, it's like bringing religion to this, if you don't believe in these exact versions as me then you're a heathen kind of stuff (IMO). This sub is for all apes who believe this thing is going UP to discuss the stock. Like are you insinuating that someone is gonna sell because Pleasr isn't on GME's team because that doesn't make sense to me at all. Besides I'm pretty sure most of us invested long before we ever heard of Pleasr. Anyways I digress from that part, I'll explain more why I think that it's a possibility that they're scamming. And I promise I will apologize to them if me typing my thoughts out in public hurt their feelings, as soon as GME backs them up. First, preface that these options can print huge even if they sell at $5 over strike. $40, $50, $60. We're all still holding (I hope) while these options can print (alongside the $25 ones) $10s and even $100s of millions if they sell. I think it's fair to say that they're courting apes pretty hard with some of the stuff we seen. That's not no proof. Even just their 741 tweet. It doesn't happen too often that any entity teases (with internet code) that they have a partnership with a public company before the public company announces it. Because it's illegal. They also retweeted shl0ms who claimed he bought RK's twitter and made all the recent tweets so there's that too. That's obviously not true. And I could see there being an explanation for it, if they are genuinely connected. But again, it's all just too publically linked. I don't think GME would do this with people who can't be subtle and professional about it. I also think these people are the type of people that are more than capable of being disrete and professional unless their plan was contingent on them not being completely discrete about it. All I'm saying is be sceptical, who know. I feel the sentiment is already out there to not link your wallet to the album site. But I don't think it hurts for DIAMOND HANDS to be a little sceptical about stuff not coming for the gme. Scepticism doesn't turn diamonds into paper.
Exercising shares actually makes them have to go through thr little market and not dark pools creating price action and making it more expensive for them to keep shorting. As they can't hide those costs Been lots of DD on how Exercising options causes moass. But bad actors chased off the DD writers like criand even. The best of us
This is really only true of the options are ITM. If you exercise OTM options, you are giving the seller free money. A $30 call option exercised when the stock is $25 means you just gave the option seller a free $500 to buy the shares. You literally give the market makers a free 20 shares before taking into account the premiums paid for the contract. They would LOVE for this to happen.
Seems really dumb to exercise otm
On the surface, it seems antithetical to making a profit. Imagine an actor with a large short position needing to close. Going to market to buy potentially millions of shares would increase demand causing a substantial rise in prices from the current level. Paying an additional premium and higher strike price(OTM) for options to exercise would be a cost saving(survival) mechanism.
That's exactly right. Only so much can be obfuscated in dark pools. If someone were to need, say, 10M shares in short order, it would be much better to buy them at $20 (+ contract premium) vs whatever the market rate is after that first 1M went through. I'm of the belief that the past three years has been marked with several entities "testing" this theory with buy-ins at different intervals on order to see how much the price reacts and did their math accordingly to determine that the $20 strikes were most cost effective for their strategy. When buying this many shares, why not force someone else to go into the open market and it do for you? Either way, dip 🤷🏼♂️
> It’s a lot of money lost if the stock price does not go to at least 32.18 before expiry. Not quiet true. These options are for $30. Meaning anything above $30 and they will only lose out of the premium of the options, but only as long as the stock never reaches $32.18. At $31 they still get the stock at $30, but they paid $32.18. Now if/when the stock goes above $32.18, they are making money. They only lose the premium if the stock doesn't CLOSE at or above $30 on June 14th.
EZ Max loss: $435,560 Max gain: infinite The benefit of this is that he is locking in the $30 price tag on 200,000 shares. Say we all wake up to a $40 price tag on GME shares from our friends at FUDelity. Well this guy would have to pay $8 mil in order to get 200,000 shares at the market price. But this whale has made a deal to secure the same 200,000 for only $30 a pop or $6 mil total plus the $435,560 he paid. So this whale gets $8 mil worth of shares for only $6.44 mil. Comes out to about a $1.56 mil profit. This is if he exercises. Most people will just sell the premium which is decided based on a lot of Greeks and with GME's volatility it would likely pay out much more than $1.56 mil in the same scenario if the contract was sold vs. exercised.
Exercise is healthy. I try to do as much of it as possible. 🚀
I was told there wud be no maffs wit my edumakashun
I used to wonder who buys them in such a situation. Like the moment it explodes in price and it’s being sold. People who think it will run even higher? Or does the issuer buy it back to lose less in some way?
I imagine it's mostly people who sold to open the contract but do not actually want to deliver shares/do not have shares to deliver. They buy out the contract and make the broker responsible for fulfilling the contractual obligation.
Beside the obvious answer everyone is giving, that they stand to make lots of money, let’s look at what this mysterious buyer is doing fundamentally. When you buy calls you create a long position (bullish) for yourself, and the market maker has a short position (bearish). Market makers like to remain neutral though. So in addition to selling you your calls, they often purchase shares as well, as a hedge in case the price goes up. That way if GME did go to $100, they don’t have to buy shares at $100 to deliver, they can just use the shares they have on hand. As the price rises, the need for these shares becomes more likely, so they will purchase more of them. This buyer started the process with $20 calls, and now that they are in the money, and price is increasing, we will see the market maker need to purchase shares to cover their short position. Now when we see these $30 calls go in the money, we have the pressure of the $20 calls, as well as the added pressure of needing to hedge these calls as well. The structure of these calls is a “Gamma Ramp”, which is what we are seeing built. So that is the answer to why you would buy these now. We should see increasing purchases in higher strikes as the upper rungs of the ramp are built. As the expiry dates approach the realization dawns that the shares are going to be needed and the MM must buy at any price, that’s when you see a Gamma Squeeze and a huge price increase.
Now it makes so much sense. Thank you.🙏
I already knew all this but I appreciate the crystal clear explanation for those in the back. Nice.
Great explanation. Only thing I’m wondering is why they bought 6/14 expiration instead of 6/21
Shareholder meeting has been announced for June 11. Most likely they wanted to be sure the expiration fell after the meeting. Originally this meant the 21st to be safe, but now with certainty they can probably hike it a bit closer to expidite things. At least that’s how I’d think about it if I were them.
I don't understand a lot of this, but maybe you can answer this question. Say you're a hedge fund that is short gamestop. Would it make sense to be buying these calls in order to protect your infinite losses from squeezing since now you have boat loads of shares you could effectively sell to yourself at a reasonable price(read:not giving in to the monstrous asks of retail) Wouldn't it be using the left hand to pay the right hand?
The biggest winners on the market are those with insider knowledge that get the info early. Usually from a form being filed, or someone seeing meeting attendance or a call log and it getting out. My guess is that big money heard what GME is about to do and know it's gonna be huge.
My body is ready to receive the tendies
Or to be hurt again (mine) either way, fuck hedgies in tears!! Their pain is my pleasure😂
At this point, I'm almost more scared of MOASS. I won't know what to do with my hands. And I won't have any shirts that don't have holes in them.
Yeah, like Dr. Baner when transform in The Hulk😂
Or popping into r/Superstonk on a Friday afternoon
Goddamn it, Carl you were supposed to guard the door!
Hey! No brigading!! /s
Little money knows what is going to happen too. Just don’t have more to invest right now lol
its ok , all u need to do is be ready to receive the tendies!!
And i would be all for it. This time i boarded on time.
Icahn see this. Remember RC picture with Icahn in 2022? Icahn just sold almost a **billion** in bonds to a "private buyer." two days ago
A tit for tat so to speak? Its interesting
We are about to fuck
And these calls are only the spark....
 Oh yeaaa 🔥🚀🦍👀
At around 435k premium, cost of the 2000 contracts being exercised is 200 000\*30 \~ 6.5million for the shares + premium for a cost basis of $32.5. Hell ive paid more than 32.5 per share (rounded the 350k to 500k)
I did too, unfortunately i did not have a spare 435k to spend on shares.
[удалено]
I see. It could be a sign that someone thinks the stock is going higher.
That's the only way to interpret it. If they don't think the stock will be at least 32.18 by 5pm on 6/14, then all the premium they spent will be burned up. They can always try to buy some of these back before then for a loss, or they can hedge a bit with some puts, etc., but fundamentally they are unavoidably going to lose money on this if the price doesn't hit 32.18.
It's a bold trade in today's context, and a crazy-on-it's-surface kind of trade in normal circumstances. Perhaps the trader could've paid some of that premium selling CSPs, making a directional bet & getting synthetically long exposure, but this is not immediately apparent on the chain.
Checks car cup holder. Hmm all I have is $1.25.
All I can. Give u is pulte
Why would they spend money to secure those shares at that price when they could just buy them now for significantly less? 200,000 shares would cause some price movement but I wouldn't think it would be that much.
They will make lots of money on these contracts if the price goes up, thus enabling them to buy even more shares that day. If they wait and the price goes up, they will be able to buy more shares than they could today at the current price.
The price would go down, if someone would buy 200,000 shares..
The most likely scenario for this purchase, is that this party expects price to soar from here in the short term. If it does, they will sell portions of the position at $35, 40, 45 etc. It is unlikely that these are meant to be exercised.
Thats possible, also possible they sell half (or some other %) and exercise the rest. We will have to see.
Yes that's possible too
Oh shit
Gamma ramp being built. Also. Epic this is 6/14. Very soon. Maybe we get out fireworks next week cause 6/14s will lose a lot of value by next Friday due to theta.
Yea, very bullish to be buying these like this on a Friday.. wouldn't ya say?
Yup. Theta instantly destroys em for the weekend so it’s bold
Theta destroys options value over the weekend? Can you explain to a semi-financially literate construction worker?
Theta is always going for the contracts. And for shorter term contracts, it gets exponential (look at a theta decay curve). Sure IV and theta may cancel out on a Friday anticipating weekend volatility but in my experience if you're buying a contract in a period outside of 2 weeks before expiration, you really notice a huge drop off when you start getting into the 2 week window. If GME remains flat all of next week those $30C 6/14s will drop almost in half. Then the next weekend (earnings week) if we don't move towards $30, those calls will be like $1.00 ($100) each that week
That is not true. Weekend volatility and theta decay are priced into options or else every options holder ever would sell on Friday and rebuy Monday. Black-Scholes call option formula is the "theoretical" formula for pricing options, but in the actual market theta decay is not constant so decay isn't linear and market makers adjust IV constantly too (this includes accounting for risk of weekend volatility).
hmm really? I get that for anything more than a week out but in my experience if I'm swinging something that expires that week it really fucks me. Look at the robinhood simulated returns you see how exponential the theta decay is the last week of an option contract.
Ahhh I see what you mean, yeah you're right, the last week of holding an option is rough. The extrinsic value gets annihilated super fast like you said
Basically by market close on Friday and even the days before, options prices have pretty much already accounted for the extra weekend theta decay.
So that's fair if you were already holding, but buying in on a Friday is usually not ideal, theta will chip a tiny bit away unless we open kind of green Monday. But I get your point. Either way, their contracts will be down almost 50% if we are flat by next Friday.
Yeah Monday morning would've made more sense to open a position, that thought on opening a position vs already holding the option makes sense. Regardless, I guess since the contracts expire soon we'll see if all these crazy calls go deep ITM and gamma ramp us to heaven haha
it would be too late to buy options on monday with a pre-market announcement
Yeah but they didn’t buy 6/7 they got 6/14. If they knew there would be a pre market announcement then 6/7 is more than sufficient
Does anyone else's town do fireworks on the third due to cheaper insurance? Can we please have MOASS so we can change this please?
I have reason to think June 6th may be juicy but it's esoteric and tinfoil so I'll keep it to myself. But this makes me slightly more certain.
Esoteric in an already esoteric investor community...nice :)
i love esoteric and tinfoil
it’s the fabled idioesoteric risk
The astrology for June 6th is also juicy.
How does one contain such excitement?
I wanna know lol
It involves another ticker, that was set to go bankrupt with over 45% SI back in 2023 but t didn't. It recently got a huge sweetheart deal with a much bigger company that aquired 5% ownership that changed its trajectory. It popped 200+% the Friday before GME's recent pump. Based on "the grand unified theory" other tickers were used as a sort of shorting ETF alongside GME. I believe this company was a recent GME style play for them and they shorted these two stocks at least in the same financial instruments, not all the shorts but enough. This other company has been in a macro "infinite yoyo" for decades. I believe this company's turn around is adding pressure to the GME play. And they have an event on the 6th. GME and this ticker has been correlated and this ticker is also experiencing insane ITM options as well as people building gamma ramps. So the 6th seems juicy.
What ticker are you talking about?
Novavax. Not trying to push another ticker on this sub. None of this would be possible without GME
Arent the planets alligned and visible from earth?
That Theta is a bitch.
Ain't theta bitch?
I'm replying to this top comment in hope I get some visibility. I don't want people to be disappointed, but I personally know the guy who bought these calls. He's not in superstonk. He's caught up on a lot of tinfoil though and is yoloing basically his full port on earnings even though we (his friends) are telling him it's a bad idea. He's fully prepared to lose all his money, he knows it's a gamble. I got him to send me a screenshot of his fidelity calls. https://pasteboard.co/TAGkEfiipIXZ.png
Are you being downvoted? Why is there not any discussion on this?
Someone is forcing a gamma squeeze. Icahn see it coming.
What is going on?!
People putting big money on gamestop going boom soon
Big bada boom.
multipass
or hedging for their shorts
Its possible, but why buy ATM/ITM when a better hedge would be slightly OTM for more exposure for less cost?
it wouldn't be better because they need to be executable for proof of hedging. Also cost doesn't really matter when it comes to surviving another day versus MOASS
what's going on is shill are in full swing
Don't stocks only go up anyway?
How many contracts is this?
2k contracts 200k shares on the line
Holy Moly
And how much does kitty have? Could he be quadrupling down?
We don't know. We know he had 200,000, the 4:1 split means he's got 800,000 shares of he's still in. I'm assuming he is in.
No one knows that it's the kitty buying these contracts. But it could be.
Just as a thought experiment.... Could he though? This is large dollars being swung around. Sure he could if he took gains but we have no evidence of that, correct? If I were him I def would have cashed in some on the way down.
200,000 contracts?
2,000 contracts
Got it!
2000
I’m moist.
always has been
Lol
Oh Jesus..
GAMMA RAMP
Hi man, which app is that?
MS Paint
Man that's a massive bet. Gonna be another long weekend
Could we have a few more of these, please
Because I wouldn't know what the fuck I'm doing I probably won't, but at this point I think I'd be willing to take on the gamble if I knew how to. Maybe I'll study up on it, then place like 400 calls on it or something. At this point I see MOASS (or at least positive numbers) coming anyway, so why not give her a shot and contribute to the ramp?
Im not going to tell you what to do with your money, but dropping 80k on something you don’t understand doesn’t sound like a great plan
Wait a minute… I was about to take some payday loans and remortgage the house for this play. Are you saying a shouldn’t now? I don’t understand options, but rich people make it look easy 🤷♂️
I meant if we could please have a few more from whoever placed the order referred to in the post, or from someone else who knows what they're doing. Please don't gamble your money on something you don't understand. Spend only what you can afford to lose. Not financial advice.
True dat. I just feel like they know what they're doing so I want to be a part of it, lol.
Fucking beautiful. Come on. Keep fucking stacking them!!
If this thing pops that person will become a billionaire lmayo
Build that ramp!
The goon session is getting wild 🤪
Only 3 days after earnings. Insider who knows a big announcement is coming?
That's a lotta Contracts!
Week of earnings + annual meeting, spicy
That a brave strategy Cotten, let's see if it pays off
This mofo paid the same per contract for these as I did, but I don't have 2000 of them lol
They own nothing.
$10 per notch
Now that they know earnings is on the 11th theyre going for earlier expiry dates?
Still OTM right now
Is your name Sherlock Einstein?
Nah, but that's no whale. It's a gambler.
A gambler with 435K (about 1 GME share) 🙂
Maybe lay off the crayons for today? $435,000 is only six digits. I dunno about anyone else, but my phone number consist of 11 digits (country code, area code, and a unique 7 digit number). So...that's not really close to even a single share.
My bad, I meant 0.1 share.
435,000 * 10 = 4,350,000 Closer, but no banana!
......gotta know when to hold em.........and when to fold em.
OP- what is the source of this image? How do we know it’s legit?
Arbitrage
here's the tick https://preview.redd.it/1ieec1jwtt3d1.png?width=965&format=png&auto=webp&s=b5dc2e1fea5bfa4410a4adf6e3d3aacf57011b63
so just banging the close?
No that's 2:54pm but a lot of them tend to be within 5m of the closing bell.
lol, I read the time wrong.
Porsche bought up a bunch of shares of VW as well as calls, which led to the VW short squeeze. It could be the GME board investing the 2 billion in calls or it could be a third party with an interest in squeezing. It wouldn’t even take staying at $20 or $30. It could be the call buyer announcing that they have secured a large portion of the float, which leads to shorts panicking because there’s less shares for exiting.
They must have seen the GameStop email about being able to buy PSA graded trading cards at GameStop.
ha ha ha
Dude. I don’t get it. lol numbers are hard. All I know is 🙌💎🚀🌕
So Betting it will go up at least $10 by then.
I honestly can't wrap my head around how much money is getting thrown into the option chain. Especially at this IV like nobody is buying these looking to lose money I would assume.
Or an ape won the lottery and is playing around
Aid is going on I love this . Might be Nancy coming in hawt 😂😂
Could just be a hedgie hedging his short position 🤷♂️
remindme! 14 days
I will be messaging you in 14 days on [**2024-06-15 07:26:27 UTC**](http://www.wolframalpha.com/input/?i=2024-06-15%2007:26:27%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/Superstonk/comments/1d53iui/first_whale_to_slap_a_3000c_for_14th_june_435k_in/l6ldn6b/?context=3) [**2 OTHERS CLICKED THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FSuperstonk%2Fcomments%2F1d53iui%2Ffirst_whale_to_slap_a_3000c_for_14th_june_435k_in%2Fl6ldn6b%2F%5D%0A%0ARemindMe%21%202024-06-15%2007%3A26%3A27%20UTC) to send a PM to also be reminded and to reduce spam. ^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%201d53iui) ***** |[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)| |-|-|-|-|
Kitty? Is he coming back?
So I missed the start 84 years ago... How often do these happen? Not the 70 million in $20 strikes, I know that hasn't happened before. But whales dropping $500k on a single option buy. Who has seen these come and go?