Tuesday update on the AMC Battle.

 What's going on?

I was expecting a much higher trading volume for AMC. But it barely reached 30% of the average. A further indication that the steam is out. Tomorrow is the last day for the Ape Army to advance the price beyond $40.

As outlined yesterday the Sweet Spot of the Market Maker lays under $40 and above $35. This is their spot where they make the most money and have to pay out the least.

The Apes did not board the rocket ship, "to the moon, bro". Not today. The resistance Level at $40 to $41 is backed up by about 54,000 call contracts, or 5,400,000 shares. Remember, the MM are sitting on an endless supply of shares form all the previous expiration dates. 

To understand this, consider the Ape Army is not buying longer term options because they dont know about it or they are too expensive for them. Now, every time some "trader" buys a call option the Market Maker buys the 100 underlaying stocks of AMC. He goes long on the stock, he owns the shares!!

Now since apes only think 7 days in advance we all know that your option expires the next Friday. 

What is going to happen?

The "trader", or better said gambler, now lost all his or her money. The option expires worthless, OTM, "Out Of the Money". The market maker still has the shares. And he might hold on to them to wait for the next week. Another Monday and Tuesday and the Ape Army is buying Call options WITHIN THE SAME PRICE RANGE we see AMC since ...???? Mid of July. AMC prices went down since beginning of July! The market maker sold their shares and cashed in and hence dropped the price. And now that the price dropped to Mid July, the MM also could buy back their "short" positions. The price went up again, a little.

The AMC is trading in a range now, and the MM are keeping their shares of your weekly expiring call options and dont even have to buy any when some "trader" comes back on Monday and buys more calls at the same price! The MM already owns the shares and doesnt need to buy them. He might sell some to drop the price.

Whaaaat???

Yes, This is one major reason why AMC is not breaking those levels. The Market Makers coordinate their defense and the Ape Army cannot break resistance levels.

Today is Tuesday and the trading volume was low. And if the Apes cannot give it to the "Hedgies" on Wednesday then the game is over for this week. I will watch the volume and it must surpass the average volume by at least 150% to break above $42 and gain just a little profit or to break even for the $40 - $41 Call Options. Will there be a trading volume of 250 million shares tomorrow?? I dont think so. But who am I to tell you where to lose your money.

Today

The Call / Put Ratio for this week as of today is 39%. And all next week is empty and the ratio grows to 63% Put options.

So far there will expire 140,000 Call options in 3 days and 55,000 Put options. 

Today "traders" bought "ONLY" about 38,000 call options and 24,000 Put options. A very low trading volume, I must say. 

Market Maker Sweet Spot

We can see where they lose the least amount of money. Between $40-38. But even $35 would be ok compared to the past few weeks and how much was at stake. 10 times more.

The distribution of the Supply and Resistance levels. shows only two major zones and they all get wiped out on Friday.

$40-41 Resistance Level with around 53,000 contracts or 5,3 million shares. A third of what it was.

$36-34 Support Level with around 22,000 contracts or 2.2 million shares. Thats it my friends. 

Make your bets. 

I am short trading AMC, I can wait long term