I didnt make my money yet but I am confident that the Market Maker will drop their shares and so the price.

A lot happened this week. The apes lost their battle to "Go to the moon, bro!" The failed in "giving it to the boomer, dude". Jump in and get rich quick.

The options expired for this Friday and it was not the Strike of $65 I was thinking they might conquer BUT they only ended up at a closing price of $54. This means the Market Maker could keep the price way below $65 and in an area where they made a huge profit.

This here was my concern that the Market Maker will lose a lot of money and i was short on the stock!!! This calculation is based on the $65 level in AMC. But they won the battle to close at $54. My Strike Price for the long PUT is $50 and I think AMC will drop to $40.

Since I am short on AMC, waiting for the collapse of the stock, I prayed to the Market Maker to do the work for me. I knew they would like to keep the price under $55 and above $50. This would be the best case scenario for them.

Here is the loss they had to incur IF, IF, IF AMC would have closed at 65 as I was thinking. Market Maker would have lost 250 million Dollars today. But they could keep the price at $54 and made a 500 Million Dollar profit today, instead. Good job! So the naïve investor, the First Timer  "I am new to investing, what shall I do?" and the "Get Rich Quick" scheme, the dumb money lost a lot today! 500 million Dollar!!

Here the potential loss of the MM.

Here the actual profit of the MM by the end of the trading day.

And when you take a look at the charts and see how it moves you know that the Apes were out of steam very quickly. You can see that the trading volume went from 750 Million shares a day to 68 million, less than 10%. It declined over time. The first two days the hype was great that the smart Apes ate their dumb cousins bananas. And so did the market maker. If you are too late to the game you buy from those who are already leaving and selling their position. You buy theirs at a overpriced value they cash in and you pay for it. "Stick it to the man, bro", "The stock will go to the moon, bro". Bull crap.

What a fun battle. I am still short with a PUT. And now that the Apes went bankrupt or under or are just tired and look somewhere else since they cannot effort the option prices anymore, I am still short and wait for the final price drop of the Market Makers. They are not shareholder and hence dont want to keep the shares. They make their profit with the slippage or the spread in the market. Great week! Fantastic story.

Billions Of Bitcoin Disappear + Tax Cheats + John McAfee Dies

What is your best Criminal Organization? 

Apple or JP Morgan? 

Lets go to the Moon, Bro!

So AMC is hovering around the 55-60 Dollar level.

The trading volume for AMC is not that strong anymore. The apes seem to wander off to another banana tree. Tomorrow might be the critical day. If they cant breach the 60 and 70 level by Thursday there will be just not enough money to keep the pressure up. You cannot buy CALL options in a stock and then close them for a massive loss. Remember the MM is sitting on all the shares even when your CALL option expires. They still have the massive amount of shares and they haven't tossed them into the market yet. The price hasnt dropped yet. They are hesitant and wait. 

The price couldn't breach the 70 Dollar level since 3 weeks. Since a week the price ranges from $52 to $65. That will drive the apes mad since they have no patience. They will wander off to other MEME stocks because they have better looking bananas.

The CALL options in play are are much broader spread than last week. The red circle shows options that might be Out of the Money, OTM, by the end of the week. All those calls expire! Look at DTE, Days to Expiration, 2.

These are the numbers and we can see compared to last week that the apes REALLY expected to drive the price way up. And they did not succeed! Compared to last week we have a lot of CALL options that are way beyond the 60 Dollar level: 80, 90, 95. Lot of bedding.

This is how it will look like if AMC ends at 65 on Friday.

The losses could be big for the MM (250 million Dollar) but they are sitting on a huge amount of shares by now. And who knows. They might start selling shares for every call that comes in too. Buy a 100 for every contract to cover the CALL and then sell a 100 to drop the price. I am not an Oracle. But we can assume that 6 million Dollar wander out of the wallets of the apes into the wallets of the MM. These are the options that will expire worthless, OTM, Out of The Money.

And if the Market Maker can keep the price between 55 and 51 Dollar they win the game this week. They will end up in the profit.

Last Friday the drop didnt happen. I closed my put at the end of the day for no loss. I bought another PUT today to stay on the other side of the movement.

I am waiting for the drop. If it happens to be an up rise I will sell two Puts against the long Put Option and break even. Then buy a Call Option to participate in the "To the moon, bro!" travel.

Either way it should be fun.

AMC was good to me. But here is my bet for Friday June 18th

The Ape Army is still trying to bet AMC higher.

After being on the short side of AMC in the beginning I reversed my position and went long the next day and caught the up rise.

We had some losing plays too. But all over all I came out bigly.

What is the situation??

1. The Apes are fighting but many left the battle field. The trading volume was about IN AVERAGE 94 MILLION SHARES A DAY when the battle started. Since then the run is up to 156 million shares in average a day. Huge trade volume increase. But now the trade volume barely makes it to the average. In the beginning the average was taken within the first hour or two. Now they are struggling to reach 40% of that volume. 
2. We have to understand how this works. Most Apes buy CALLs to drive the price up. And they are cheap, Apes with no clue. The higher the leverage the better they think. Get rich quick or get broke quicker is their MO. 
   When they buy a call the MARKET MAKER who is selling the call to you covers his SHORT call with AMC shares, he buys them and holds them. A so called COVERED CALL. This is more demand and drives the price up.
3. But we can see even the Apes are still pumping long calls into AMC they seem not be able to break the first resistance level. And they have to break it to succeed. Remember, it is a squeeze where they bid the price higher of a shorted bad stock of a bankrupt company. They hope that the interest paid for hedge funds that are short on AMC will be too much to bear. They hope the hedge funds will get margin calls and have to put more money in their accounts to stay in the game. Like Poker, LOL. And their final hope is that they run out of money or the pain of holding a losing position will become too big to bear so that the hedge funds start buying back their short position for a loss and hence ALSO driving the price up to the moon. Their game plan

What will happen tomorrow, why tomorrow?

Lets have a look at the option trades.

These here are the strongest Resistance levels to break to get AMC higher. Can they do it? See option spread sheet I get from 

https://www.barchart.com/options

Here are the numbers. About 30,000,000.00 Dollars will be flushed out of the market tomorrow. Friday is Option Expiration Day! The Market Maker will sit on 10.5 million shares that made them good money. They might start selling them to cash in on Profit. At the same time PUT options also will expire and the Market makers are holding the other end of the trade, too. They are short on the stock and have to buy it back.

Why not selling 10.5 million shares and cashing in? The price will drop and then buying back the short position for the expiring PUTs at a lower price??

Now here comes the PUT side and their levels. There are another 7.2 million free floating shares that need to be bought back. And another 13.5 million Dollars at risk if the APE Army can breach higher. But the $50 and $45 Dollar are the strongest support levels that need to be flushed out to have AMC in free fall.

How will the day today End?

AMC took the $60 Level. Can they hold it? Volume reaches above average 200 million shares traded! Seems like they coming back. AMC made 12% today. While the rest of the market seems down or flat except Apple and hence the QQQs, AMC is up, too. I closed a few trades. Times are tougher now since the market is confused due to inflation numbers and no tapering of the FMOC, and letting inflation rise. It is only transitional, they say. We will see.

Options

1. We could jump in and buy a CALL since we believe in the Planet of the Apes, no I dont.
2. We could buy Puts at the 55 Level, or 50 and hope they will fail tomorrow. But if they breach $70 Level the stampede might be on and more Apes will join the frenzy. 
• As it looks now the 60 Calls will be sold back to the Market Maker for a little profit. They need to get out or they will lose all their money, 30 million Dollars.
• If so, the Market Maker will start selling shares since they got back the option and start dropping the price. Remember, tomorrow is Option Expiration Date!! It will be volatile.
• The question will be: how many apes will join the early fight and jump in to buy the shares or CALLS? Will there be enough?
• Volatility in the AMC options are around 300%, which means they are getting extreme expensive. Volatility drives prices up. Can they afford them?
• A PUT option at the money, costs you 17.75 times 100 shares!!!
• The same for a CALL 22 days to expiration.
3. The other option we have is staying out of AMC and to SHORT IWM, the Russel 2000 Small Cap ETF. They are the biggest holder of AMC with 5%. And with a sluggish market we could have a good chance of succeeding since there WILL BE A HUGE MOVE in the market tomorrow and AMC could drag the IMW down.
• The same ATM option for IWM cost you only 3.80 x 100 shares and the volatility is about 20%. Much cheaper. It will not have the same profit potential but less risky if you like risk at all.
• These options should be bought at the end of the day, in the next 2 hours, when the volatility is reduced. The first 30 minutes tomorrow will be flushed with Investment Bank orders and will be volatile, too. 

Below the battle ground levels for tomorrow!! Have some popcorn and watch the show on Yahoo. They have it all for free and live

https://finance.yahoo.com AMC

What is the AMC Setup for on Monday

Now you know what happened last week, 27th of May up to the long Memorial Weekend, then continuation on Tuesday and Wednesday.

Remember, for the Hedge Fund Manager volatility is the biggest enemy! But for the day trader it is the biggest friend. So we must trade AMC. But with a concept. No naked positions and we must know what to do when shit hits the fan.

Here we go

Is the Ape Army retreating or are they coming back for more? Where do they want to drive the price? The squeeze hasnt started yet since the Hedge Funds learnt from Game Stop. Just hang in there and it will be over within a week. If the Apes still have money left after the counterattack they might come back for more. They are hungry still. But they have to put so much money on the table that the Hedge Funds will start closing their short positions for a loss. Then the stock will go to the moon! $200!

We will keep an ear on the jungle noise and see Monday morning how the volume will start out. Remember, they surpassed the average volume within 5 minutes of opening. We will see very early and do our position. If they cannot keep up the volume then the steam is out and the whole thing will collapse and my PUTs will take over. Either way, up or down, it will be a winner for us. We just need the right timing and read the volume

What to do on Monday 6-6-2021

Monitor AMC.

a)     BUY 2 x 25^th June 2021 40 PUTs, about $12.25 per contract x 100 shares = $2,450 Debit

i)                   If AMC drops to 30 take profit $10 x 2 x 0.5 DELTA x 100 = $1,000

ii)                 or take profit at 25 for $15 x 2 x 0.5 DELTA x 100 = $1,500

iii)               Collateral 2,450 Dollar

iv)         If the collapses completely it will be even better for us.

b)    If PUT doesnt work (AMC > 60) turning north

i)                   Sell 4 PUTs at 43 to create BULL PUT Credit Spread

ii)                  Probably costs 4 x $6.00 = $2,400 Credit

iii)               This would re-cover the first PUT to 99%.

iv)               2 x -12.25 Debit + 4 x 6.00 Credit = 0.50 => x 100 Shares = $-50

v)                 Collateral 5,550 US Dollar

vi)               This trade will also make us more money if the stock price will further increase.

vii)              Buy 2 CALLs at 60 for about 18.35 a contract

viii)            Sell at 70 for $10 x 2 x 0.5 DELTA x 100 = $1000

ix)               Collateral 1,835 Dollar

x)          If the collapses goes to the moon it will be even better for us.

c)     Totals

i)                   Scenario a) #1 Plus $1,000 or plus $1,550

ii)                 Scenario a) #2 Plus $-50

iii)               Scenario b) Plus $-50 + $1,000 = 950 US Dollars

iv)         Upper side and lower side profit ranges are pretty much open

d)     For this trade you need about $7,500 Dollars

I might change my mind in the last second

Why? Well, the above scenario is relative. It works in the same way for CALLs. If I see the volume rising in the first 5-10 minutes and it hits over 100 million shares AND the price is going up then the Ape Army goes for another fight and I will go long, I will buy two long Calls. If things turn south I will sell 4 short CALLs closer to the money to cover for a profit and buy two long PUTs at the same time. It is pretty much the same set up just the other way around.

Stay focused, no fear, execute the plan

My AMC Trade that I started out wrong

This was the Scenario on Thursday, May 17th.

It just popped up on my screener with AMC at a 44% increase in price. I didnt know anything about the approaching Ape Army. So I bought a PUT to profit from the decline in price next day. At least so I hoped. It is a risky gamble. You need to know what to do if it turns out you are wrong!!!! How to turn a looser into a winner and how to win even more.

A stock with a jump like this usually retraces next day by 50%. I had to expect the 23.00 Dollars Price level. 

Thus, at the end of the day when volatility is low and option prices becoming relatively less expensive I bought a 18 June, 26 Dollar Strike PUT. The price $7.50 per contract, x 100 shares. 

Friday opened with a gap. Price shot up to 36 Dollars. But it declined ever since on Friday and I thought, well keep it. It will fall later. I even kept it over the weekend since it ended the day at my 26 Dollar Strike Level. They wont keep up the pressure required. Memorial Weekend and the NYSE is closed!!! This I figured on Saturday. LOL. Some profit taking was going on since the stock went up almost 110%, from 15 to 36 Dollars. Some people were uncertain, too.

Nothing on Monday, holiday. Then on Tuesday also nothing until the "news" broke lose of the approaching Ape Army of Squeezers. And again it opened with a gap.

Then came the Wednesday Fun and I was on the wrong side of the trade.

The stock traded already at above average volume 5 minutes into the day!! Normally AMC trades at 94 million shares a day. That was blown out of the water within 5 minutes. Tuesday and so Wednesday it traded 750 million, a 3/4 billion shares!!!

And the price was rising fast and furious. I was on the the wrong side. What to do captain? The Ape Army is here! At mid day the price went up another 122% from the 50% on Friday. Total of almost 400% since last week, of 15$. Good but an artificial move for a company that is bankrupt. 

The hedge funds were down now by about 94 million short position at 68 Dollars. Lets assume they shorted is at 15 Dollars, last weeks prices. That would make it a treasure coffin of about 6.4 Billion Dollars in the hole!!! WOW.

And the Ape Army is coming for it. Are you prepared?

I saw the volume exploding. My Goodness! 100 of thousands of shares bought and bought!!!

I did not close my big time losing position, my long PUT. I Sold a Short PUT of AMC. Thats why I love options and here we go with a option maneuver you cannot do in stocks. I hedged my long put with 2 short puts.

• I had 1 $26 long PUTs at 750 debit. 
• I sold 2 $30 short PUTS for 2 x $4.65 = $930 credit. I just turned my losing position into a profitable one by selling puts in a quick rising market. Great concept. But I hit the wrong button and only sold one. Next time though will be right on.

Now I was free with a profit and I was going to participate in the squeeze.

• Buy to Open 1 $39 long CALL 
• Buy to Open 1 $40 long CALL 
• These were a few thousand Dollars.

The Hedge Funds finally counter attacked the Ape Army. Mudrick Capital bought 8.5 million shares from AMC for cheaper on Tuesday and sold them next day, on Wednesday

Wednesday’s record price was 30 times, this translates to 3,000%, the level AMC traded at the end of 2020 and came a day after it issued 8.5 million shares to Mudrick Capital, which the hedge fund flipped at a profit.

The Apes ate all the bananas and the price went up again. Then On Thursday AMC did the same thing. They sold 11 million shares to finally take in a profit!!!! WOW. What a game!

We learnt that you can turn a losing trade into a winner and take part in the squeeze. This is all new for me but when you think about it, it is really simple. I guess I will get use to it.
See next post for next Monday Set Up for AMC. Where will the stock go? Up or down? I dont know and I dont have to. I was wrong on this one too. I guess I will stay with PUT and double it up. I will need money in the account to cover just in case. Is the squeeze over since Friday was quiet? Is the Ape Army retreating or staging new? I will go short on AMC for sure.

Mini Series about the anatomy of a AMC Squeeze Trade

These will probably be three posts to make it not too long. People getting tired of reading too, I heard.

Here we go.

What is a Short Squeeze and what is up with AMC?

AMC is not the Sister of AOC, the communist Bartender in the US Senate who lives the big life now lecturing you about the Green New Deal and attending counselling classes since she is still suffering from the Trump Syndrome.

AMC Entertainment Holdings, Inc., through its subsidiaries, involved in the theatrical exhibition business. The company owns, operates, or has interests in theatres. As of March 12, 2021, it operated approximately 1000 theatres and 10,700 screens in the United States and internationally. The company was founded in 1920 and is headquartered in Leawood, Kansas.

A snipped of the Income Statement tells you quickly how they are doing. While the stock price is rising to astronomical heights the company itself is almost bankrupt. The numbers below are in million Dollars. Their Sales, Revenue fell from 5.5 billion to under 500 million in 2021. Theaters belong to a dying arm of the entertainment industry. IMO! Since China's Red Wuhan pandemic their sales plummeted and even we are already 6 month into 2021 the sales did not reach any level close to 2019 or taking off. Take a quick look at OPERATING INCOME, the income the company generates through its sales. the margin was at 5% at good times, very little. Then about 3% in 2019 pre epidemic! The Income in 2019 was also 50% of that of 2018 with the same amount of sales! Pre Pandemic!!

And then it plunged to minus 300% in 2020 and minus 500% in 2021, TTM = Trailing Twelve Months. The SGAC, Selling, General and administrative costs stay constant. This means wages and rental costs and such.

The industry standard of the EBITAD multiple (it is more stringent than the profit margin) is 13%, they were hovering around 5%, then 3% and now under water.

Thus, Hedge Funds have to balance their portfolio in order to eliminate market fluctuations. The Beta of a company tells you the volatility a stock is having and hence is part of the equation for hedging. In the end you buy stocks in a good company, you go long and you sell stocks in a bad company, you short it.

The result is that you do not care if the market goes up or down. You only care that the good company continues to outperform the bad company. This is your capital gain. Your gain as an investor if this is where you put your money. 

I heard there are still people believing in Mutual Funds and Saving Accounts. Well, well.

Now Hedge Funds shorted AMC for the mentioned reasons. They borrow shares from their brokerage and pay interest on the money. Then the Hedge Funds selling those shares on the market for the current price and receive the capital for them. Then when the price falls over time since it is a bad company they buy back their shares, return them to the brokerage and they keep the difference as a profit. The Brokerage earns interests on it. A deal deal.

Sell high and buy back low later. 

There are about 90 million shares shorted in AMC. At a price at closing of 42 Dollar this makes about 4 billion Dollars on the table to be flushed out!

If you want to take part in the next squeeze I think this might be a good webside. Lot of numbers.

https://fintel.io/ss/us/amc

Now comes the Ape Squeeze

Since the Hedge Funds sitting on borrowed shares and waiting for an further decline in the stock the Army of Apes want to bring the price up. The higher the price goes the more expensive it becomes for the short position holders!! They might have to buy back their shorts for more and not less, got it? It is really simple.

Now, The Apes borrowed all their money from friends, emptied all their savings and borrowed from their parents to take part in the Ape Squeeze Crusade. They started buying and buying and the price starts to rise. Supply and Demand. The media also pushed it higher with their reporting and so did several  websites and chatrooms. 

Now the Apes wait for the final battle if they dont run out of money beforehand, and that is that the rules for the hedge funds dont get over written. 10-15% loss in any position then close it. The Apes wait for the Hedge Funds to start to close their positions, buying back their shorts and drive the price further up! They will have to buy 90 million of shares to close! And when one Hedge Fund starts the others will follow. The stock will sky rocket. Thats the concept.

Than the Squeeze frenzy is on. Those who get out earlier and went in earlier or are not so greedy will make money. But remember their is always someone who pays the other side! Always two parties in a sale. Hedge Funds versus Apes

What happen since Wednesday and what did I trade in AMC and why I was wrong first. See next post coming