GameStop - GME - Share Chat

[ralf]

@Bnet1

If you elect:

Did you elect?
(I don’t believe there’s a way to!)

[smellylegend (Rich)]

r/Superstonk - [deleted by user]

[ralf]

Haha, so I got sucked into reading that link and then read the next post too…

The level of conspiracy theories going on is amazing. This is basically the plot of a movie right here:

r/Superstonk - The GME Wargame: A New Theory of Everything (My Final DD) 💗🦍🐒🚀🚀🚀

I guess I should buy more stocks of CINE ready for when it releases!

[Big-g]

Bloody hell, after about 2 mins I got bored of him writing about the boring last couple days he had with nothing to do with the subject matter That is one seriously long message TL;DR

Funny thing is if he was on FT he would soon be complaining he has to sell at 25k batches and it would take too long

[Cameron]

@ralf

The level of conspiracy theories going on is amazing.

It is great, I know every post on WSB (and half the other capital markets subs) reads like a Tumblr fan fiction, except instead of One Direction it’s GME bull erotica, but this is a step above anything else I’ve seen.

Honestly if they can work in a few new characters and a bit of romance (maybe a love triangle between Citadel, Jane St and Virtu?) this could be a bestseller.

[Big-g]

The one thing I can’t get my head around is who is selling the shares I can buy for $151? and why wouldn’t the “bads” just hoover up any available? Are they waiting to have to pay more? And finally, surely there will be a tipping point where the Bads have enough and then don’t need any more leaving Apes missing the target price.

It’s far too complicated for me I like to put money in to companies I believe in long term and hope to hit 10% a year.

[Big-g]

Cheers I get the above but surely there are enough retail that are stubborn to not allow it to happen. Whatever happens I hope it finishes soon

[Afra (Afra.Doming)]

Haven’t any of you longs figured out why GME closed up 1 cent yesterday?
clue: a hidden message in an ice cream cone

[AdamL (Adam)]

My gains are wafer thin.

[anthy]

Some holders might get a bit flaky if it goes to 99

[AdamL (Adam)]

Not me, I’m holding on for hundreds and thousands.

[ralf]

So you must have jelly diamond hands.

[Dave (Dave Smith)]

@Jwrich

Last weeks options for put’s was about 375,000 that is 37,000,000 shares and if you look at the options that are still to come there are over 600,000 more left over the next year that is a total of 97,000,000 shares and unless they just created the put but never sold the shares then they have to buy them back at current market price. (this is just from last week to the end of the year not far off that has all ready ended out of the money so worthless)

How are Puts relevant to short squeeze? A put is the option, but not obligation to sell at a strike price. If the Hedge fund sold the puts they have an obligation to buy the shares if the person who bought the put decides to exercise it. but they are buying the shares from person who bought the put option. They don’t need to buy on the open market. The person with the option has to find the shares if they want to exercise it.

Conversely if the hedge fund bought the puts, they have no obligation to exercise them. So yeah these options could mean big losses for someone but I don’t see how they contribute to a squeeze

[ralf]

@Dave

So yeah these options could mean big losses for someone but I don’t see how they contribute to a squeeze

Assuming the person who sold the option still owns the shares (which isn’t necessarily a given), they likely have them stored with a broker who might have lent those shares out without informing the owner. When the owner sells, they’re none the wiser, but the broker then has to find these shares from somewhere and so has to either buy them at the market rate themselves or not renewing the lend to the short seller so the short seller has to buy them at current market rate in order to return them.

Either way, exercising the options causes someone to have to buy some shares to fulfil them, which contributes to the squeeze.

If they don’t actually own the shares any more, they have to get them from somewhere to sell them. Also, even if they do have the shares, but the broker has lent them out, the broker has to get hold of them to return them when they are sold.

[Dave (Dave Smith)]

I think you are thinking of call options, a Put option is the option to sell. so if someone sells you a put option they are basically saying I will buy your shares on this particular day at this particular price. If you choose to exercise the option.

The point being no one has any obligation to find shares they don’t have. they person who sells the shares can just choose not to exercise the option

[Dave (Dave Smith)]

@Jwrich

if you are the person who created the put and you borrowed shares they still have to be returned to the original owner regardless of the put options result (in fact they can ask for the shares back at any time without notice)

If you are the person who created the put you don’t need to find any shares from anywhere. If the put was exercised you would be buying shares. If it’s not exercised you made a profit on the premium, congrats.

Call options would be the ones where someone has an obligation to find shares, if you sell a call option and someone exercises it you have an obligation to sell them shares. if you don’t have them then you could be in trouble.

[Dave (Dave Smith)]

A put doesn’t give the right to own shares, it gives the right to sell shares at a set price. There is no obligation to own the shares. If the share price is higher than the strike price you just wouldn’t exercise the option. If the share price is lower you would buy low on the open market and sell at the strike price for a profit. The point is none of this is mandatory. It’s called an option for a reason. If the shares are unavailable you don’t need to do anything.

[Dave (Dave Smith)]

@Jwrich

When the put options excised It does give the right to own shares to the option writer!

Only if the person who buys it decides to exercise it, the decision is with the person who bought the option. That is why it’s called an option. In a situation where the price is spiking because of a squeeze or whatever there is no logical reason why anyone would exercise a put

The option writer doesn’t have a right to force the buyer to exercise the option. So in the case of a put the only person who needs to be able to acquire shares from somewhere is the person who holds the option. and they have the choice to not exercise and do nothing.

@Jwrich

So if a call is bought it’s optional if they want to pay out because I think you will find it’s up to the option holder in this case to excise it the seller has no option/say in it else people would be selling options left right and centre for the premium with no intention of paying out!

This is correct, but in the case of a put it’s the person who holds the option and therefore has a choice who needs the shares, that is why I can’t see how it would contribute to a squeeze.

The person who wrote the option needs cash to cover, not shares

[Dave (Dave Smith)]

You don’t need to hold any shares borrowed or otherwise to write a put option. if you write a put option you are making an offer to buy shares. You don’t need to borrow shares to offer to buy more.

You don’t need to hold any shares borrowed or otherwise to buy a put option, if the price is lower than the strike price at expiry you have the option to buy low on the open market and immediately sell at a profit for the strike price.

At the time of writing the put no shares have been bought or sold or borrowed, it’s just an optional offer.

[swordfist]

Interesting discussion on the fundamentals here.

I think the main anomalies are the call deep ITM which seem to be exercised immediately after being issued (possibly to avoid Failure to Deliver on shorts) and the amount of Put options slightly OTM. My thoughts were as the strike price is approached, the Market Maker who is liable for these option contracts would then short shores in order to remain neutral on the contract (whilst making money on the premium).

Have I understood this correctly?

Many thanks,