The Battle of AMC, Tuesday 8/24/21

Today the Ape Army gathered momentum and drove the price higher. 

The average share trading volume was surpassed by 30% and reached 225 million shares. At the same time over 1 million options contracts changed hands. 75% of which were call options and 25% put options. AMC was traded  at a volume today as almost all last week. This is impressive. Since the options are all over the place I do not give credit to any institutional money. These were traded by retail traders.

Did uncle Joe hand out all the stimulus checks already?

If the apes want to press forward they have to continue the pressure and surpass the average daily trading volume. This is what I said all along. And here they come.

The levels are:

At the $40 we have around 20,000 Call contracts with about 2 million shares.

At the $45 we have about 8,000 Call option contracts sitting. These two levels existed already yesterday and might just have changed hands. The open interest contracts didnt change.

The Apes increased their presence at the $50 level from 2,000 to almost 10,000 contracts. Then they laid some weaker levels all the way up to the heavy $80 resistance level. Here we have about 15,000 contracts sitting. 

There are about half as many open interest in Put options out there than Call options.

The Put Options, support levels, are at $37 with about 9,000 open contracts and then at 32 (6,000) and 31(4,000).

The Sweet Spot for the Market Maker sits at 35-38. Since the price of the underlaying is sitting at $44 I can say the pressure to the upside is quite high. Otherwise the MM would have dropped the price right back into the range. They couldnt do it. There are about 107,000,000 contracts to expire this Friday with an estimated value of 200,000,000.00 Dolas.

The apes loaded the $80 Resistance level with some smarter call options. They paid more and bought some time to stay longer in the game. From the 15,000 contracts about 10,000 will expire this Friday and 5,000 next Friday. Also this storm will go by.

Consequences.

My 21 January Puts sitting at $37 evolved from long Puts into a short Straddle with different expiration dates. The Puts I sold with the same strike but different DTE. Thus if the price stays above $37 until September24 that would be just great. Why?

For selling the puts my position is hedged and the potential losses with AMC trading above $40 now, received a credit, which makes up for the negative book value. So, there is no loss to my position wherever the market wants to go. Its fine with me. Even if it drops below 37-35 my long put will eat all the losses of the short put. 

First I thought of selling them at $38 or 39 but I pressed the button too quickly. Thus, it became a straddle instead of a Strangle. I like more to strangle. LOL

In the technicals of the daily charts we can also see that MACD is crossing over and SMA 5 and 20 are also crossing. I believe that the apes will take that as an initiative to drive the price up this week. I am fine with this. 

In the long run I still believe in a decline of AMC. This company is not worth a penny.