Author Topic: GME deathwatch - how to profit?  (Read 82846 times)

chasesfish

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Re: GME deathwatch - how to profit?
« Reply #150 on: February 07, 2021, 12:40:43 PM »
I viewed buying the puts as betting on a heavy favorite at the vegas sportsbook.

It looked like buying a 3-1 odds, the ones I looked at required a $7,000 purchase with an upside of $2,000 or so.  It was difficult for me to commit that much money for a capped upside

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #151 on: February 09, 2021, 12:16:30 AM »
In general if PUT options are too expensive, so are call options.  That's why I sold $800 strike calls expiring in July for $6/sh.  My short calls can be bought for $4.50/sh now, but I'm predicting $3/sh or less by Thursday.

A successful buying attack happened on Jan 22, with the stock up and kept up for two days.  Market makers who sold call options had to buy shares at much higher prices, and eat the loss.  That didn't happen this past Friday, with Monday's closing price below Friday's.

Each Friday, call options expire, so that's the timing of attacks on GME stock.  An attack requires buying whatever sell orders are on the market, and then profiting off call options based on stock price.  I suspect the 90% of Wall Street Bets that joined recently are greedy, and might only be purchasing call options.  If nobody buys the stock - too many freeloaders - then the call options don't profit.

I will be watching the "open interest" on $800 strike GME calls.  Last Friday those open contracts hit 23k.  For Feb 12, there's 7k contracts so far.  I predict weaker attacks, with fewer contracts sold at the $800 strike.  I'll be especially interested in where that stands on Thursday, before the buying attack starts.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #152 on: February 09, 2021, 09:53:29 AM »
A July GME strike $800 call just sold for $2.46/sh, reaching my prediction with 2 days to spare.  I plan to wait until Thursday to see how it goes.

One reason to avoid Friday: the open interest in Friday (2/12) $800 strike calls has almost doubled, to 13k contracts (yesterday it was 7k).  So while I suspect there's greedy freeloaders buying contracts - I have to assume some of them are preparing another buying attack on GME stock on Friday (when the call options expire).

ChpBstrd

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Re: GME deathwatch - how to profit?
« Reply #153 on: February 09, 2021, 10:42:41 AM »
My put options are down 4.65%, even though I bought them 5 days ago when GME was at about $105 and GME has since fallen to $50. I was 100% right on what would happen - the stonk lost over half its value within days - and I still didn't win LOL! Remember, time value increases as you move closer to in-the-money.

My theta (time decay) is about $125 a day and rising, so I'd like to make my exit with a bit of time remaining on the option. GME should be approaching breakeven price within the next couple of days unless GME announces something to do with cryptocurrency or SPACs, in which case it's all over! It'll be tempting to exit at that time with a modest gain rather than hold out until March.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #154 on: February 09, 2021, 11:02:15 AM »
If Elon Musk announces he's creating a blockchain SPAC to acquire GameStop, I'll be closing my positions immediately!

If you don't want to reveal your exact purchase (I usually don't), could you provide an expiration date and price with similar characteristics?

Looking at 2021 Mar 19 PUTs today and 5 days ago:
$50 strike, from $19.20 to $16.39 now (-14.6%) .. $30.80/sh breakeven
$100 strike, from $59.92 to $58.22 now (-2.8%) .. $40.08/sh breakeven
$200 strike, from $155 to $153 now (-1.3%) .. $45/sh breakeven

frugalnacho

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Re: GME deathwatch - how to profit?
« Reply #155 on: February 09, 2021, 11:58:33 AM »
Everyone holding onto their 1 share of GME:




BigMoneyJim

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Re: GME deathwatch - how to profit?
« Reply #156 on: February 09, 2021, 05:17:19 PM »
I have two shares, so I'll go twice as far!

But seriously, with almost no urgency I'm wondering if/how I want to exit. I'm in at around $230/share, and I'm not particularly hopeful on breaking even in my lifetime.

r/wsb is crazy...I guess I knew that, but it seems to have gone to the moon with craziness as a result of the viral nature of the GME story. So I'm not watching it or even GME price much anymore.

But neither am I particularly motivated to sell right now to keep $100 of what used to be $460. I might adjust my sell orders to break even just in case something happens. I no longer believe there is a plausible chance for me to have a reasonable opportunity to watch and jump on a spike for profit. Because I don't really think it will happen, and even if it does I won't be paying attention then.

Otherwise I may just let my 2 shares sit indefinitely for posterity.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #157 on: February 11, 2021, 07:56:21 AM »
BigMoneyJim - In another thread you "rick rolled" to prove some memes last awhile, and I encouraged it by saying I think too many people are using (that song) as their GameStop investment strategy.  Could you be rick rolling yourself, in that you're "never gonna give [GME] up"?

People have a bias towards loss aversion, and tend to hold losing positions when they should sell.  One way to spot it:  if you had $100 right now, would you buy 2 shares of GameStop?  If you would rather have the $100 than buy the stock, ask yourself why you won't sell the stock to get that $100.

I would also add before Covid hit, GME traded for $4/share, so you're getting 10x more than the market valued the company 12 months ago.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #158 on: February 11, 2021, 08:07:43 AM »
This morning I'm waiting to sell my lone July call on GME ($800 strike), but the buyers and sellers can't agree on a price.  The buyers won't pay more than $225 per contract, and the sellers are asking $340.

In my meager options experience, I pick a reasonable increment, and start my order above the lowest bid.  Maybe that's $2.30/sh ($230).  I might add $0.20/sh if that doesn't work... then another $0.20/sh.  Usually before I reach the ask price, a seller emerges out of nowhere and accepts my offer.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #159 on: February 11, 2021, 09:02:43 AM »
Just finished this little mini experiment:

I guess nobody is using my approach of selling calls at $800 strike, so I'll have to conduct the experiment.  I just sold one 2021 July call with an $800 strike for $6.00/share x 100 shares (total $600).

I predict these call options drop back to yesterday's price (!) of $3/sh, and I expect that to happen by Feb 10.  If the options are trading above $5/sh on Feb 10, I was wrong, and I'll wait to cover my position.
On Feb 5 (last Friday), I sold a call for $600 (expiring July for $800/sh strike).  I just closed that position for $289 ($2.89/sh x 100 sh).  Of the $600 premium for selling the call option, I kept 50% as a profit, and spent 50% to close my position.

Note I opened the position on a Friday, and closed it out before the next Friday.  Options expire each week on Friday, so there's a motivation for WSB or hedge funds to push the stock price up that day, carrying their option prices up with it.

ChpBstrd

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Re: GME deathwatch - how to profit?
« Reply #160 on: February 11, 2021, 09:34:54 AM »
Just finished this little mini experiment:

I guess nobody is using my approach of selling calls at $800 strike, so I'll have to conduct the experiment.  I just sold one 2021 July call with an $800 strike for $6.00/share x 100 shares (total $600).

I predict these call options drop back to yesterday's price (!) of $3/sh, and I expect that to happen by Feb 10.  If the options are trading above $5/sh on Feb 10, I was wrong, and I'll wait to cover my position.
On Feb 5 (last Friday), I sold a call for $600 (expiring July for $800/sh strike).  I just closed that position for $289 ($2.89/sh x 100 sh).  Of the $600 premium for selling the call option, I kept 50% as a profit, and spent 50% to close my position.

Note I opened the position on a Friday, and closed it out before the next Friday.  Options expire each week on Friday, so there's a motivation for WSB or hedge funds to push the stock price up that day, carrying their option prices up with it.

Nice job! I went with the herd and bought a put option at 70. Amazingly the stock fell by half and the put option still did not appreciate. Exited at a loss because I have better things to do, and because the tug of war between shorts and longs could go on longer than the time remaining on the option. Evidence of still-high short interest shook me out.

This is similar to how I tracked a 30/35 bear put spread (April expiration) on the VIX back when it hit 35 in January. VIX is now 22, but that position would be up  only 2.6% had I entered it at the time I was correct about the VIX's next move.

BigMoneyJim

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Re: GME deathwatch - how to profit?
« Reply #161 on: February 11, 2021, 10:58:38 AM »
BigMoneyJim - In another thread you "rick rolled" to prove some memes last awhile, and I encouraged it by saying I think too many people are using (that song) as their GameStop investment strategy.

What's even funnier is that 12 hours later, on another site and completely different subject, someone rick rolled me. Or at least it proved to me that some memes last quite a while.

Quote
Could you be rick rolling yourself, in that you're "never gonna give [GME] up"?

GME wasn't worth $230/share when I bought it, and I knew that. It was likely to lose nearly everything, and I knew that. I was jumping in *after* the hype, and I knew that.

Then I started hearing about the story from emails from family who don't invest in stocks, and in sports podcasts, the latter being after I had bought. I knew that probably was the time (or past) to get out.

I was right about everything, sort of. But I didn't act in my own financial interests. And I knew that.

I'm not trying to say I'm smart and acted appropriately. I'm saying I wouldn't encourage anyone to act as I did.

Holding now isn't smart, either, but it was $460 (2 shares) to be part of a meme and have a tiny chance of outsized profit. I even had the chance to double my money but missed it.

Yesterday morning I reset my sell order to $100/share. For no smart reason I decided selling at $50/share isn't worth my time, but I'll take $100/share if it hits that.

So I guess maybe I am still memeing, but I approached the whole thing as a trip to the casino where if I walk away a few hundred bucks poorer, at least I had fun. I unsubbed r/wsb and am mostly out of the daily hype, and I was never about "diamond hands", although "to the moon" was fun.

Most likely scenario is that I'll eventually sell them to get rid of the digital clutter. I had a buy order for $4, but I canceled that. These 2 shares I'll hang onto for a bit, but I figure that $460 is probably just gone now.

I did pick up 10 shares of BB, too, at around $17 I think, but I'm OK hanging on to them long term. But I'm probably done with playing with more meme stonks for quite a long time. I'm not going to monitor BB for squeeze spikes or other anomalies. I'm not watching GME close enough to act quickly, either, but just setting a 60-day sell order.

The rest of my money is in index ETFs and cash. I could certainly have spent that $460 more effectively elsewhere, but it didn't actually hurt me in any meaningful way.

I really worry if any of these folks claiming to have invested their home down payments and all available assets while still in debt were serious. When I've posted about GME I've tried to emphasize that my stake in it is near-meaningless to me so I don't encourage others to jump on the bandwagon in a self-destructive way.
« Last Edit: February 11, 2021, 11:02:30 AM by BigMoneyJim »

frugalnacho

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Re: GME deathwatch - how to profit?
« Reply #162 on: February 11, 2021, 11:11:13 AM »
Some of those guys are posting screenshots of their plays.  Hundreds of thousands YOLO'd in and just gone.  Plenty of other screen shots of someone YOLOing their entire mortgage in and making millions too.  I have no idea if this is "play money" to these people, but some of the screenshots are absolutely ridiculous and I imagine there are a lot of lives that were absolutely wrecked by foolish gambling on risky stocks.  We all know it happens. 

theoverlook

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Re: GME deathwatch - how to profit?
« Reply #163 on: February 11, 2021, 11:23:06 AM »
I had yet to make my 2021 IRA contribution so I put the $6000 into Gamestop at $238/share. I knew it was dumb and that I was risking all of it, and I have no other individual stocks but it was a fraction of a percent of my liquid net worth and I thought it would be interesting. It dropped, spiked, dropped, spiked, and I sold it the next day for $320/share, almost right at market close, netting a little over $2000. The rest of my portfolio has gone up and down by way more than that in a single day both before and after but for some reason that $2000 has a special place in my heart.

I have no idea why I took the risk and why it continues to fascinate me. I know it was dumb luck that I came out intact much less made anything.

bwall

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Re: GME deathwatch - how to profit?
« Reply #164 on: February 11, 2021, 12:19:18 PM »
I had yet to make my 2021 IRA contribution so I put the $6000 into Gamestop at $238/share. I knew it was dumb and that I was risking all of it, and I have no other individual stocks but it was a fraction of a percent of my liquid net worth and I thought it would be interesting. It dropped, spiked, dropped, spiked, and I sold it the next day for $320/share, almost right at market close, netting a little over $2000. The rest of my portfolio has gone up and down by way more than that in a single day both before and after but for some reason that $2000 has a special place in my heart.

I have no idea why I took the risk and why it continues to fascinate me. I know it was dumb luck that I came out intact much less made anything.

Congrats on your good fortune.

Dancing on the edge of the volcano is fun...... especially if you can live to tell the tale!

Possible reasons the $2000 has a special place:

1) Sticking it to 'the man': You did it! Stuck 'the man' for $2k and got away with it!
2) Afterglow of volcano dancing. It was a thrilling ride and you made the right series of decisions to come out on top. Very satisfying emotionally, and the $2000 is the 'souvenir' of the experience.
3) You participated in an epic tale of short-busting and have $2000 to show for it. One that will be studied in classrooms for years to come. Ultimately, what lessons are learned remain to be seen.
4) You're depending on the $2000 for FIRE. OK, just kidding here, but, dunno. probably there's something else that I can't think of.

Actually, I'm kinda in a similar situation. And it was extremely rewarding emotionally to come out on top--more so than the dollar value would indicate.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #165 on: February 11, 2021, 12:21:10 PM »
ChpBstrd - Thanks, but I've decided this is my play/speculative money, so we'll see.  I took $305 and bought 2 GME calls: one at $50 and one at $55 ... expiring tomorrow!  This is purely speculative market timing with play money.

Two reasons to be this crazy with $305.  Tomorrow has as many high strike ($800) calls as last Friday, when the stock was pushed higher.  And r/WSB just sold off their cannabis stocks, sending prices tumbling there.  I think they're got cash.

I'll know if I'm right in the first hour of trading, when hopefully the stock jumps a little and I can sell my calls (before they expire 7 hours later!).  Definitely a play money move, but hopefully it keeps me from messing with my other holdings.

blue_green_sparks

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Re: GME deathwatch - how to profit?
« Reply #166 on: February 11, 2021, 12:54:54 PM »
I was working on my taxes yesterday. I play around with day-trading once in a while. Seems I bought and sold 6,000 shares of Gamestop (GME) back in September for a whopping $225 gain. $2 million would have been a little better, LOL.

ChpBstrd

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Re: GME deathwatch - how to profit?
« Reply #167 on: February 11, 2021, 01:06:04 PM »
Tomorrow has as many high strike ($800) calls as last Friday, when the stock was pushed higher. 

My understanding is that short investors buy calls to hedge their short bets, so a large open interest in calls is partially a reflection of short interest. However, if the shorts got in last week, and GME lost half its value since then, maybe they won't be in a rush to cover on Friday like they were in the weeks when GME was going astronomical. Also, maybe a greater percentage of short shares are represented by call hedges than was the case in January, when the lesson about naked shorting was learned.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #168 on: February 12, 2021, 02:17:44 AM »
ChpBstrd - Short sellers could buy $380 strike calls for $0.01/sh (3:50pm), or buy $800 strike calls for $0.02 (3:58pm).  As a hedge, the $800 strikes don't make sense for a $50-$60 stock.  But you could be right about more call options being bought by hedge funds, as protection when they short the stock.

WSB got millions of new followers, who are added guns for their attacks.  I claim they "like to sing along and likes to shoot his gun ... but he don't know what it means" to quote Nirvana.  They are repeating the same steps that worked before, unaware they won't work now.


I was working on my taxes yesterday. I play around with day-trading once in a while. Seems I bought and sold 6,000 shares of Gamestop (GME) back in September for a whopping $225 gain. $2 million would have been a little better, LOL.
If you want to blame yourself for not predicting the future 4 months in advance, you can add every market crash to that list!

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #169 on: February 12, 2021, 09:00:06 AM »
Should have done a limit sell at the open (up +5%), but having missed that, it doesn't look like much is going to happen today.  I sold my $305 worth of options for $182, taking a $123 loss.  Still, I had a $311 profit, so net profit is $188.

ChpBstrd - Thanks, but I've decided this is my play/speculative money, so we'll see.  I took $305 and bought 2 GME calls: one at $50 and one at $55 ... expiring tomorrow!  This is purely speculative market timing with play money.

Looks like my last chance to sell some GME calls with an $800 strike price:
sold 1x March 5 call for $62 premium
sold 8x March 19 calls for $78/ea premium
sold 6x April 16 calls for 130.8/ea premium (1x 135, 5 x 130)

In total I sold 15 contracts for $1471, or about $1/share.  It looks like Interactive Brokers will require $8,000 of maintenance margin, if I'm reading their "Risk Navigator" correctly.

ChpBstrd

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Re: GME deathwatch - how to profit?
« Reply #170 on: February 19, 2021, 12:22:37 PM »
Well dang, I snatched defeat from the jaws of victory. GME continues to fall and the 70-strike March 12 puts I bought and exited at a loss are now a couple percent higher than they were when I originally bought them. Shoulda held.

Lesson learned: I'm not suited to profit from greater-fool investments, even betting against the obviously doomed ones.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #171 on: February 19, 2021, 02:07:47 PM »
Another way is to stand in front of a news-breaking freight train. I went for it, and sold unprotected, long-dated high priced call options.  If GME rises above my strike price, the holder of the option can force me to buy GME stock.  But today GME didn't even spike at the open... it just dropped and wobbled around ...

I'm prepared to lose -400% my investment.
I would take any quick profit on the naked short calls ASAP because this thing is unpredictable and not at all tied to reality. You're playing roulette with leverage there, and losses could exceed 400%.
Revisiting this, WSB claimed to attack call options, which I verified by looking at GME market data.  But the news coverage surely alerted all the institutional money managers and hedge funds, with orders of magnitude more money to invest than WSB.  Buying attacks use up cash, and push the price higher, making the next attack cost more - with less cash available.

Here's what I saw Feb 1, Monday, and what it meant:
Open at $316.56, a drop from Friday's $325 close.  WSB lacks the buying power they need to push the stock up - their strategy is starting to fail.
up 2%, a buying attack starts (from WSB)
price plummets: the hedge fund sell orders far outweigh WSB buy orders
prices moves up then down, up then down: hedge funds stringing WSB along - buy orders are met by sell orders over and over.

The market prices told a story that matched my predictions, so I measured my risk
appetite and sold call options at a $950 strike while GME traded at $250/sh.  I watched the market constantly after that, prepared to close my position if I had too much of a loss.


^^^
+1.

This is not the time to stand in front of a freight train. Shorts are still at 100% (or more), meaning that the short covering that occurred and pushed the stock to $300 was merely replaced by renewed shorting. "The squeeze hasn't squooze." is what WSB likes to say, and I kinda agree.
Revisiting the freight train - it needed gas, in the form of new cash.  The further they got, the higher the price of gas.  They couldn't sell GME stock without dropping the price.  They used up their cash, and the freight train stopped.

A short retelling might be: A number of retail investors pushed the price of GME up 100x beyond it's price a year earlier.  Every hedge fund and institutional investor learned about it through every news source.  All that institutional money overwhelmed the retail traders, pushing the price down towards it's valuation again.  An efficient market corrected a mispriced stock.

BigMoneyJim

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Re: GME deathwatch - how to profit?
« Reply #172 on: February 19, 2021, 03:04:36 PM »
Since I've commented in a couple of threads about my buying 2 GME at around $232, I sold at open Monday Tuesday for market price. So I walked away with a little over $100 left of my initial $460.

I was tired of watching GME, and it wasn't a long-term investment for me, so I took what's left of my ball and went home.

I still have 10 shares of BB bought at over $17, but I'm willing to ignore it and let it sit there for ages.

Now I'll go buy some BTC. Just kidding.

frugalnacho

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Re: GME deathwatch - how to profit?
« Reply #173 on: February 24, 2021, 01:39:12 PM »
Got out too early man.  GME just shot up like 60% in the last hour.  At $74/share now.

frugalnacho

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Re: GME deathwatch - how to profit?
« Reply #174 on: February 24, 2021, 01:41:17 PM »
Shit it went to $78 while I was making that post.   Strap in boys, next stop the moon.

frugalnacho

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Re: GME deathwatch - how to profit?
« Reply #175 on: February 24, 2021, 01:52:31 PM »
$92.  wtf is going on?

Davnasty

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Re: GME deathwatch - how to profit?
« Reply #176 on: February 24, 2021, 02:09:43 PM »
Looks like Reddit went down right about the same time GME started climbing.

AMC had a smaller bump.

I was not able to purchase through Vanguard.


frugalnacho

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Re: GME deathwatch - how to profit?
« Reply #177 on: February 24, 2021, 05:48:55 PM »
$182 after hours price now. Crazy!

bwall

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Re: GME deathwatch - how to profit?
« Reply #178 on: February 25, 2021, 04:32:10 AM »
$92.  wtf is going on?
$182 after hours price now. Crazy!


Yeh, this is crazy. AGAIN. What's going on? Hard to say, but let's see what we do know.

Yesterday GME traded flat, around $50 all day, until around 3 p.m. when the price and volume shot up quickly. GME closed at $91.71 after a couple of halts in the final hour. It's at $146 pre-market now, hours before open.

Average daily share volume (10 day) has dropped to about 20m shares, according to the snapshot on my brokerage screen. At the peak frenzy, it was easily topping 150-170m. Low volumes are a friend to those who seek quick spikes, perhaps induced by shorts closing out their position. Low volumes make it difficult to get access to shares, thus a buyer is being forced to take any offer.

Short interest has dropped to 30%, which is high, but not unduly high or enough to trigger a short squeeze, IMO. And, no where near the high of 140% earlier.

100,000 Calls (representing 10m shares, about 20% of the float) traded hands yesterday at 26 FEB expiration at strike prices above $50, massively outstripping the open interest. Presumably, the open interest sellers were those who were convinced that the frenzy was over and they'd be getting 'free money' by writing short dated calls. The new buyers are bulls or short Call covering. Who were yesterdays' Call sellers at the above $50 strikes? If they're covered Call writers, they left a lot of money on the table by not just selling shares outright. If they're hedge funds cowboys writing naked Calls, they had a sleepless night last night.

There were about another 15,000 Calls that changed hands between $90 and $150.

There was news on Feb. 23 that GME would replace the CFO. If that were the catalyst, the surge would've happened at open, not one hour before close.

Roaring Kitty reported bought 50,000 more shares last week (a $2m outlay in round numbers), just a drop in the bucket. But, perhaps large enough to signal a floor to true believers (or signal an idiot to those who don't believe the GME turnaround story).

The question for me is, who bought millions of shares in the last hour at prices substantially higher than the rest of the day (or week)? Who says 'I gotta have me some GME shares today, dammit! I don't care what I have to pay!! and I won't wait until tomorrow or buy in-the-money Calls (sub $50)' ?

bwall

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Re: GME deathwatch - how to profit?
« Reply #179 on: February 25, 2021, 06:11:21 AM »
Just a quick follow up; before market open today, GME Calls at the 26 FEB expiration are only showing about 50,000 open contracts between the strike prices of $50 and $150, not 100,000. So, yesterday's large volume resulted in only 50,000 open interest, not 100,000.

dignam

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Re: GME deathwatch - how to profit?
« Reply #180 on: February 25, 2021, 06:55:52 AM »
My GF keeps asking why I'm not selling my GME shares.  This was purely a speculative bet for me, so my thinking here is I'll sell if the amount I get is a life-changing amount.  That would require probably a $1k+ share price for me to consider.

Still crazy what is going on, I don't think anyone really knows what is causing the spike.  IF, and a strong IF, this is anything like the VW squeeze, what we saw with GME last month was just the gamma squeeze and this could potentially go to the stars. 

Again, anyone in this stock is not investing, we're betting. 

bwall

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Re: GME deathwatch - how to profit?
« Reply #181 on: February 25, 2021, 07:55:30 AM »
My GF keeps asking why I'm not selling my GME shares.  This was purely a speculative bet for me, so my thinking here is I'll sell if the amount I get is a life-changing amount.  That would require probably a $1k+ share price for me to consider.

Still crazy what is going on, I don't think anyone really knows what is causing the spike.  IF, and a strong IF, this is anything like the VW squeeze, what we saw with GME last month was just the gamma squeeze and this could potentially go to the stars. 

Again, anyone in this stock is not investing, we're betting.

There are plenty of shares now available for shorting. So an adventurous hedge funder could short the open this morning from $150 to Kingdom Come. Already 24m shares traded hands in the first 20 minutes this morning and the price has dropped to $113. Nothing to stop it from dropping all the way to $50, other than short covering. Who's buying at these levels? It's nuts.

The longs need to keep the price high until tomorrow's close--a very, very tall order. Then they can get a boost from any naked call writers who're forced to buy to cover their sour bet.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #182 on: February 25, 2021, 08:44:25 AM »
I've been buying GameStop... to close the calls I sold.  Plenty of losses, but at least I found the limit of my risk tolerance!

I sold calls in the midst of the last buying attack, when GME was hitting a wall of selling.  I had a thesis, looked at price movements to confirm it, and then measured how much risk I was willing to take.  That's how I want to speculate/invest/bet - using a thesis backed by data and measured risk.

Unfortunately, the next time I sold calls, I just treated all of that as a checkbox that had already been ticked.  I did not have a thesis, did not study data, and did not calculate the risk of each new bet.  A new bet/investment needs a new calculation of risk, and I failed to do that.

I did worse than that, too.  I tried to sell calls that were blocked by IBKR, telling me I couldn't have a buy order (my stop loss order) and a sell order at the same time.  So I canceled the stop loss order to buy more!  Before that, I at least had some risk control on automatic pilot - but I kicked that aside to pick up pennies in front of a steamroller.

As a hobby, selling calls on GME is very overrated.

bwall

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Re: GME deathwatch - how to profit?
« Reply #183 on: February 25, 2021, 09:06:05 AM »
@MustacheAndaHalf ; Now that you're out of the trade can you give us? Which expirations and strikes? entry and exit prices (and dates)? 

The reason that I ask is so that interested bystanders can learn what happened when a seemingly 'can't miss' trade did just that.

FWIW: I would have also thought that GME was over. Just dead cat bounces and suckers' rallies, nothing to see here.


MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #184 on: February 25, 2021, 09:42:22 AM »
@bwall - I planned to post it over in "An experiment", but maybe it fits better here.

Here's the numbers to go with the mistakes I mentioned above:

   The Fad Fund         price      orig price      gain / loss   
   AMC $22 call 2023         $458.00      -$199.56      -129.50%   
   GME $800 call Mar 12         $1,926.00      -$144.63      -1231.67%   
   GME $800 call July 16         $5,000.00      -$229.90      -2074.86%   
   GME $950.00 call 2022         $4,713.00      -$6,799.12      30.68%   

The most dramatic first: the July 16 calls at a -2075% loss.  I canceled my stop loss to lose more... I mean buy more calls.  That's a really bad combination.

Note the strike price is $800, and GME in this run up never pushed above $200.  But the buying attack pushed volatility through the roof, which pushes time value up dramatically - and that's all these calls are, is time value.

The one profitable GME call was sold Feb 1st, when I actually did my research.  Let me add one more mistake: chasing past successes.  I needed to treat the Jan 2022 call as a success, cash it in and move on.  Although it's technically a 30% profit, I had the opportunity for a 90-95% profit and did not take it.

Given everything that happened with GME, I decided to close AMC positions as well.  I had a 200% stop loss, that I triggered manually at -130%.  (I sold it for $200, then bought it back for $458, taking a $258 loss: -258/200 = -130%)

----
An observation - not an attack - that I find interesting.  When I mentioned my investment in this thread on Feb 1st, a couple people strongly recommended against it (at a very scary time, I understand).  That time of panic and fear was the only profitable investment in the group.  Meanwhile, the worst decision was made selling calls when volatility was orders of magnitude lower, and GameStop had faded from most people's minds.

dignam

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Re: GME deathwatch - how to profit?
« Reply #185 on: February 25, 2021, 09:49:18 AM »
Meanwhile, we "long idiots" are just along for the ride lol. 

I also want to point out that I stated last month that I believed it was just getting started, and more volitile days were in our future.  OK, done patting myself on the back.
« Last Edit: February 25, 2021, 09:52:00 AM by dignam »

ChpBstrd

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Re: GME deathwatch - how to lose money?
« Reply #186 on: February 25, 2021, 09:54:17 AM »
Well at least I'm not the only one who lost money. I'm glad I exited my 5 GME $70 March 12 puts for $29, about a week after buying them for $31.30. They are worth $15.25 now! I exited because the price of the puts was not moving even as GME fell down the stairs, so I knew there was something wrong with my thesis even if I didn't comprehend why.

Also, I doubt anyone is going to profit from knowing my exact trades. I do have suspicions that someone could profit if they consistently did the exact opposite of me, and I suppose that is Robinhood's business model.

bwall

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Re: GME deathwatch - how to profit?
« Reply #187 on: February 25, 2021, 11:12:48 AM »
Thanks for sharing.

The GME market is absolutely crazy. Stock is trading now at $173 (up $81 on the day, after doubling to $91 yesterday). The $800 Calls you mention have already gone up another 10% from the prices you listed, so if you hadn't changed course, losses would've been even higher. Or just hodl till expiration, which might lead to sleep loss.

Another 100,000 options contracts are changing hands again today with three more hours of trading left. It remains to be seen how many of those will be open interest at the end of the day.

Any GME short position would be having a very very bad day. And that's when the DOW is down 540 points (1.7%).

GME's market cap went from $4b to $12b in less than 24 hours. I don't believe that a tweet from Ryan Cohen (?) the Chewy guy, board member, whatever, set off $8b in market cap inflows and 100m shares changing hands (so far) today. At least, I doubt the reddit crowd has that much additional firepower available to them in 24 hours.

bwall

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Re: GME deathwatch - how to lose money?
« Reply #188 on: February 25, 2021, 11:18:03 AM »
I do have suspicions that someone could profit if they consistently did the exact opposite of me, and I suppose that is Robinhood's business model.

I've shared this suspicion off and on for years. Perhaps Robinhood has managed to harness and monetize 'looking over the shoulder' of our collective trades? No wonder Citadel Capital is willing to pay so much for the 'flow of information.' :) :)

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Re: GME deathwatch - how to profit?
« Reply #189 on: February 25, 2021, 11:39:37 AM »
My GF keeps asking why I'm not selling my GME shares.  This was purely a speculative bet for me, so my thinking here is I'll sell if the amount I get is a life-changing amount.  That would require probably a $1k+ share price for me to consider.

Still crazy what is going on, I don't think anyone really knows what is causing the spike.  IF, and a strong IF, this is anything like the VW squeeze, what we saw with GME last month was just the gamma squeeze and this could potentially go to the stars. 

Again, anyone in this stock is not investing, we're betting.

There are plenty of shares now available for shorting. So an adventurous hedge funder could short the open this morning from $150 to Kingdom Come. Already 24m shares traded hands in the first 20 minutes this morning and the price has dropped to $113. Nothing to stop it from dropping all the way to $50, other than short covering. Who's buying at these levels? It's nuts.

The longs need to keep the price high until tomorrow's close--a very, very tall order. Then they can get a boost from any naked call writers who're forced to buy to cover their sour bet.

I was ready to get out of this nonsense, with my 5 shares, "for the lols". Had a limit sell order at $95, which executed for $160 this morning. Lost a few hundred bucks, but I just wanted to get out of this. Fun while it lasted, but not interested in loosing more..

ChpBstrd

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Re: GME deathwatch - how to profit?
« Reply #190 on: February 25, 2021, 12:44:58 PM »
I suspect the latest squeeze was partially triggered by rising interest rates, which one can assume will affect the cost of borrowing stock.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #191 on: February 25, 2021, 09:40:58 PM »
My approach is heavily flawed by ignoring time value.

Meanwhile, we "long idiots" are just along for the ride lol. 

I also want to point out that I stated last month that I believed it was just getting started, and more volitile days were in our future.  OK, done patting myself on the back.
I don't see anyone using the quoted phrase, and I hope they don't since insulting others is against the forum rules.  I forgot if you were investing for fun or not, so I looked at your prior post:

This was purely a speculative bet for me, so my thinking here is I'll sell if the amount I get is a life-changing amount.  That would require probably a $1k+ share price for me to consider.
...
Again, anyone in this stock is not investing, we're betting.
GME's highest value was before the news media caught the story.  Now that the situation is known to everyone, and presents a profit opportunity for hedge funds, I think the path to the moon is much farther away.  Like if you look at each week's buying attack, they get stopped at lower and lower stock prices.

Why sell into each attack, and then buy back afterwards?

MustacheAndaHalf

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Re: GME deathwatch - how to lose money?
« Reply #192 on: February 25, 2021, 09:48:10 PM »
Well at least I'm not the only one who lost money. I'm glad I exited my 5 GME $70 March 12 puts for $29, about a week after buying them for $31.30. They are worth $15.25 now! I exited because the price of the puts was not moving even as GME fell down the stairs, so I knew there was something wrong with my thesis even if I didn't comprehend why.

Also, I doubt anyone is going to profit from knowing my exact trades. I do have suspicions that someone could profit if they consistently did the exact opposite of me, and I suppose that is Robinhood's business model.
I definitely secured my premium membership in that club.  I still need to add up the damage, but IBKR displays my portfolio as rolling back 2 weeks.  I've lost all my gains for the past 2 strong weeks, which is not as bad as it could have been.

I hope I will treat things like this as an event.  When the event ends, so does my understanding of what happens next.  I need to close my position at that point, not hang on for an arbitrary profit I imagined.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #193 on: February 25, 2021, 10:02:37 PM »
Thanks for sharing.

The GME market is absolutely crazy. Stock is trading now at $173 (up $81 on the day, after doubling to $91 yesterday). The $800 Calls you mention have already gone up another 10% from the prices you listed, so if you hadn't changed course, losses would've been even higher. Or just hodl till expiration, which might lead to sleep loss.
...
Any GME short position would be having a very very bad day. And that's when the DOW is down 540 points (1.7%).
I think it might actually be better to talk about significant losses, to get past them.  So thanks for listening, as well.

My biggest problem was IBKR rising margin requirements by orders of magnitude.  I prioritized them by how much maintenance margin each call freed up, and that's why I sold.  So I might have a $6 loss, but IBKR required $100 of maintenance margin on that loss.

I thought the stock might plunge today, hitting a wall of selling, but I couldn't keep speculating so I covered most of my positions.  It set me back about 2 weeks, which isn't as bad as I expected.  I've sold off over 90% of my positions, but have a small number left that I plan to sell next week.

When I was almost done closing my positions, the last few saw the price to close double from minutes earlier.  Given the exposure was small (similar to my Feb 1 investment), and I could afford the maintenance margin, I elected to keep them.  My plan is to wait for them to fall in value, and then close them after GME settles down again next week.

So now I'm not waiting for a profit, I'm waiting for a small number of contracts to fall dramatically in price, so I can take a smaller loss.

dignam

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Re: GME deathwatch - how to profit?
« Reply #194 on: February 26, 2021, 05:39:29 AM »
My approach is heavily flawed by ignoring time value.

Meanwhile, we "long idiots" are just along for the ride lol. 

I also want to point out that I stated last month that I believed it was just getting started, and more volitile days were in our future.  OK, done patting myself on the back.
I don't see anyone using the quoted phrase, and I hope they don't since insulting others is against the forum rules.  I forgot if you were investing for fun or not, so I looked at your prior post:

This was purely a speculative bet for me, so my thinking here is I'll sell if the amount I get is a life-changing amount.  That would require probably a $1k+ share price for me to consider.
...
Again, anyone in this stock is not investing, we're betting.
GME's highest value was before the news media caught the story.  Now that the situation is known to everyone, and presents a profit opportunity for hedge funds, I think the path to the moon is much farther away.  Like if you look at each week's buying attack, they get stopped at lower and lower stock prices.

Why sell into each attack, and then buy back afterwards?

Sorry - I was quoting Jim Cramer in an old interview where he blatantly admitted to manipulation.  I think his actual line was "moron longs".
« Last Edit: February 26, 2021, 05:41:17 AM by dignam »

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Re: GME deathwatch - how to profit?
« Reply #195 on: February 26, 2021, 07:59:51 AM »
I still 10 long puts at the 10 strike and 16APR2021 expiry that I bought for 1.05 a share.  I have 1,050 in capital at risk in the trade.  I am deeply underwater.  But I made sure to keep my position size small and my risk defined by the 1,050 unlike M&1/2 who chose a strategy with potentially unlimited losses.  I regularly put about 1,000 into long puts on things that are over leveraged, subject to various pressures, etc.  I've been doing about 2 years and am up 20,792 (as of last night's close) on the experiment. 

I'd be happy even if I was down several thousand as I consider these long puts a hedge and "insurance"  They sure have paid off before when the market was tanking in March and April. 

bacchi

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Re: GME deathwatch - how to profit?
« Reply #196 on: February 26, 2021, 09:41:56 AM »
My biggest problem was IBKR rising margin requirements by orders of magnitude.  I prioritized them by how much maintenance margin each call freed up, and that's why I sold.  So I might have a $6 loss, but IBKR required $100 of maintenance margin on that loss.

At one point, the margin for the July 800 calls was $31k each.

I also had to close some short 800s at a huge loss. It sure seemed like an easy win. At any other brokerage, it probably would've been.

bwall

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Re: GME deathwatch - how to profit?
« Reply #197 on: February 26, 2021, 10:06:20 AM »
My biggest problem was IBKR rising margin requirements by orders of magnitude.  I prioritized them by how much maintenance margin each call freed up, and that's why I sold.  So I might have a $6 loss, but IBKR required $100 of maintenance margin on that loss.

At one point, the margin for the July 800 calls was $31k each.

I also had to close some short 800s at a huge loss. It sure seemed like an easy win. At any other brokerage, it probably would've been.

OMG!!! ! That's a lot of margin. wow.

I guess the brokers weren't taking any chances.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #198 on: February 26, 2021, 01:13:02 PM »
My biggest problem was IBKR rising margin requirements by orders of magnitude.  I prioritized them by how much maintenance margin each call freed up, and that's why I sold.  So I might have a $6 loss, but IBKR required $100 of maintenance margin on that loss.
At one point, the margin for the July 800 calls was $31k each.

I also had to close some short 800s at a huge loss. It sure seemed like an easy win. At any other brokerage, it probably would've been.
When the fear was gone, I treated the environment as permanent, which was a mistake on my part - the easy win you reference.  At least for me, though, I can point to specific failures to be disciplined and follow the same process that made me a lot of money over the past 12 months: form a thesis, check the data, determine amount I can risk losing, and invest.  I did none of that while picking up nickels in front of the steamroller.

As to brokerages, Vanguard only allows selling covered calls, so without owing the underlying stock there's no way to make this trade.  I'm not sure about elsewhere.

A key thing for me is close the position earlier, then move on.

MustacheAndaHalf

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Re: GME deathwatch - how to profit?
« Reply #199 on: February 26, 2021, 11:16:33 PM »
At one point, the margin for the July 800 calls was $31k each.
GME stock ranged from $101 to $185 on Thursday, or $10k to $19k to buy 100 shares.  Now that I think about it, I could have reduced margin requirements by purchasing GME shares!  Amusing, but a bad idea: the $9k difference between high and low is a hint of the potential losses, which are greater than call option losses.


I still 10 long puts at the 10 strike and 16APR2021 expiry that I bought for 1.05 a share.  I have 1,050 in capital at risk in the trade.  I am deeply underwater.  But I made sure to keep my position size small and my risk defined by the 1,050 unlike M&1/2 who chose a strategy with potentially unlimited losses.
Very true.  I expected higher margin requirements, but not exponential growth.

I thought about a lower risk approach of using bull call spreads, of buying the highest strike call and selling a lower strike call.  Unfortunately bid-ask spreads are so far apart that you wind up with a premium less than 1% of the money at risk.  I actually saw $800 calls sell for more than $780 calls, which would be a great time to close the position at a gain.. when the stock moves against you.

There might be some way to take advantage of PUT options, which have limited downside.  But everything is different with GME: the stock tripled from Feb 22 to Feb 25... and $800 strike Mar 19 calls went up in price slightly.  It can be hard to predict what will happen with put options on GME.