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.