"GameStop / GameStonk" has nothing to do with the "Madness of Crowds" [Forbes]

This article has a nice description of the relatively new gamma squeeze combined with the short squeeze which hasn't really been seen in the market until very recently.


(From the article):

The GME Gamma Squeeze
The game-changing maneuver is called, obscurely, a Gamma Squeeze. It is a recent invention; if you google the term, there are very few articles older than January or February of 2021. It is clever and powerful. It also uses options to intensify the pressure on the short-sellers, but in a different way.

Here’s a simple example. It starts with buying a Tesla call option. (The numbers are real, as of February 26, 2021.)

On February 26, Tesla closed at a price of about $675 a share
2 days earlier Tesla had closed at $742; 2 weeks earlier it was at $816 – so you think it might go up again
You buy an option to purchase a share of Tesla for $725. The option expires in 2 weeks, on March 12
The option costs $15
If Tesla’s price rises above $740 ($725 plus the $15) on or before March 12, you make money
If the option expires on March 12 and the stock is still below $740, you lose $15
If Tesla’s share price rises back to $816, the option is worth $76. The return on your $15 investment is over 500%. (In contrast, if you had bought a share of Tesla at $675 and sold it at $816, your return would be just 21%.)

The “risk/return” relationship is asymmetrical. The downside is limited. The upside is unlimited.

(Read the article for the rest)

Last Edited by AkashicRecord® on 03/07/2021 11:23 AM

For several weeks the media has been lying about the GME situation in hopes of scaring retail investors into selling their shares. Also lying in the news to make retail investors look like idiots. Now since these tactics havent worked, they have no choice but to start admitting the brilliance of these retail investors before the inevitable fall of the Hedge Fund billionaires comes. I am glad I have shares of GME, and also AMC.

Also, all of the big-boy investment sites now rate GME and AMC stocks as a "BUY" for short, mid, and long terms. This coming after weeks of them trying to convince the public that these stocks were total garbage, and that anyone buying them were dumber than a bag of rocks.

Good thing I knew better than to listen to the media. Their nonsense actually inspired me to buy more shares! LOL.

The gamma squeeze before a major short squeeze is just fantastic. There can be multiple gamma squeezes as Market Markers have to hit the open market to cover for exercised Options.

Only about 8% of Options are actually exercised though, but as more and more contracts fall in-the-money, and at ever-increasing strike prices, that 8% isn't going to matter.

Right now there is a pretty juicy price floor, a gradual daily ramp from $100 to nearly $150, and it looks pretty fucking solid. GameStop was one of the only green stocks on (multiple) days with an entire market downturn.

The next gamma squeeze that occurs may launch a bit over the previous high of almost $500/share...and that still might not (yet) trigger the short squeeze.

I wonder if the market downturn was the result of the big-boys selling their other positions across the market in order to gain capital needed to pay for covering their GME loses soon.

That is EXACTLY what I have been telling other people.

Last Edited by AkashicRecord® on 03/06/2021 03:39 PM

I wouldn't be surprised to see a steady price increase over the next two weeks in an attempt to put the March 19th calls in the money. That could be a big catalyst.

Do you have any guess as to how high this may go on the day of reckoning?

It's hard to say, but I'm figuring between $4 and 5K is a realistic possibility. It might hold those levels for 3-5 days, too. Then, tank WAY down to $40 (or worse.)

Every $5 movement is somewhat of a barrier, especially closer to Fridays. This week, there was a MAJOR push to prevent closing over $140... Why? Over a million shorted shares could have been on the hook...

Once one of the squeezes starts, that won't be much of an issue, though; it's just these week-long (and more) long, drawn-out, wars of attrition that are a pain.

Once this thing goes parabolic, shit will be off the hook:

Trading will be immediately suspended for minutes at a time after every huge uptick as volatility circuit breakers are continually tripped. Price skyrockets, but at a kind-of-slow pace (because of the repeated trade halts.) I wouldn't be surprised if the whole thing is halted for an entire day, if possible. Eventually it plateaus at pretty insane prices, with massive jumps on every uptick, temporarily making GameStop the richest company in history...on paper...for a few days. Market chaos ensues. Market is closed for days following as entities try to regroup and assess damages. Congressmen will scramble to fudge together a multi trillion-dollar bailout for various institutions. This thing could precipitate the mext major market crash never before seen.

Thanks! Thats around what I was thinking as well!

$4,200.69 is not a meme!

A lot of guys are making a killing on Options and then rolling it back into the stock...(or is it "in to" the stock? I always get those confused...)

Last Edited by AkashicRecord® on 03/07/2021 11:29 AM

nice!

I just like the stock :D

The irony of game stoppage shall not be lost on any and all regards..

I agree, it's kind of like poetic justice. :)

This is the way...

My favorite part is watching it just go off like a pinball machine..

Cant stop. Wont stop. Gamestop!

🦍💪

😂

Analysts have massively underestimated the brand loyalty of Gamestop.

Video game consumers have been shopping there for their whole lives and do not want to see the business fail, as it's like part of their childhood failing.

The madness of the crowd memestock pump and dump would not work on most stocks as people just don't care that much about them.


There is huge childhood emotional sentiment attached to Gamestop.

They want to demonize short sellers because the market is way overvalued.

One of the funniest things about this post and article, is all the old crusties on here tried to call all the peeps in on the GME rise were amateur idiots.

But most of them are silver tards, and think their bars of silver under the bed will make the same rise as GME.

I hope OP didn't buy that 800 call like he was thinking about

It's probably close to worthless right now

No not me. Some large funds and institutions did for pennies.

https://twitter.com/_/status/1365003990593921029

[link to mobile.twitter.com (secure)]

Imagine what would happen if a shareholder's meeting were to be invoked. Outstanding shares could be called in and the short sellers would be completely up $hit's creek. Shareholders (en masse) can call these meetings as well...

On another note, look at what GameStop did today, it was insane. Up over 40% on the day and held through after hours. May open at 200 tomorrow! Premarket will be a big indicator.

(I should look to see how many more millions of contracts may fall ITM come this Friday...)


This thing is packing daily heat, consistently, and is teasing toward %50 of it's ATH. We are seeing steady, daily prices that were previously only seen for a short period of time...i.e; on the upward and downward sides of a quick spike.

There's going to be some serious price discovery with this one in the near future...