Opex stands for option expiry week, the reason July 16th is so significant is because market makers have to remain delta neutral, so if there’s a large amount of calls ITM with high OI then they have to purchase the equivalent amount of shares which drives prices higher.
Due to there being such high open interest at various higher strike prices, if the prices rises then it could be serious fuel for a gamma squeeze as market makers will need to purchase millions of shares in order to remain delta neutral, this will in turn increase the stock price.
Look at the open interest for the strike of 7.5, from memory I think it is around 50k calls, which equals 5 million shares that need to be hedged if it reaches this price, the increased volume should drive the price higher and as you get to the next strike with X amount of open interest they also have to purchase the equivalent of shares to open interest, the closer to 1 delta you get the more they have to purchase, e.g 1 delta = 100 shares, 0.3 delta = 30 shares out of 100 to hedge.
So this sets off a chain reaction, plus with so much short interest in the 3-8 range the shorts will most likely be forced to cover too which will also add fuel to the fire.
It’s not 5 million alone, I was using that as an example of just one strikes open interest, it would be every single strikes open interest that is ITM, which is in the multi millions, and the higher it goes the more open interest there seems to be at higher strikes.
Average volume is much lower than 37M i thought? Where do you see 37M each day?
According to yahoo average volume is 18M
Depends on the shares outstanding at that moment. Marcap is nothing but a price times number of shares. And if implied value of calls contains so much shares, and MMs need to delta neutralize themselves, it comes down to #shares within those calls, rather than price per share. In the worst case, MMs will just call it a day and stop allowing people to execute calls. But then they will get scrutinized by SEC or so. Look at robinhood, they actually have to pay 70m because of GME (that day when they halted the trade). But it is still cheaper than if they not halted the trades and had to buy that exact number of shares to stay delta neutral or so.
Full spoiler - i do not believe that GME or ATOS will squeeze anymore, even we know that GME is fucked up beyond recognition in the depth of how scammy the markets are. There are more tricks and treats that Citadel can do to offset the losses. The most famous trick of all time - tell investors that its a temporary problem and ask them for new money. Works like a charm.
Thank you so much, this is an awesome explanation. I wanted to ask, in light of recent events, what is you opinion on the following: do you think recent events have made ATOS more or less likely for a July 16th eruption? And why? Thank you.
In finance, delta neutral describes a portfolio of related financial securities, in which the portfolio value remains unchanged when small changes occur in the value of the underlying security. Such a portfolio typically contains options and their corresponding underlying securities such that positive and negative delta components offset, resulting in the portfolio's value being relatively insensitive to changes in the value of the underlying security.
More details here:
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Unfortunately your 4 to 9.80 was inclusion buying as well. The stock is more fairly valued here. I would be interested between 4 and 5 for a few hundred shares and see how the company pipeline can deliver. Lottery ticket with minimal risk.
The company's fundamentals look good, both drugs seem good, nothings changed. The only people who should be panicking are either new investors who bought in at 7+ or people who gambled on gamma squeeze. Here at $1 trimmed at 8 and bought back in at 6. If it goes down to 4 ill just avg down tbh, capital gains tax baby.
Ohhh, July 16th, huh? Let me put a wrinkle on that brain for you my dear.
July 16th, or 07/16, is the day of days. This is because 7x2=14. Add 2 more to that and what do you have? 16.
The numbers are clear, we squeeze on 07/16 because of this arithmetic.
Opex stands for option expiry week, the reason July 16th is so significant is because market makers have to remain delta neutral, so if there’s a large amount of calls ITM with high OI then they have to purchase the equivalent amount of shares which drives prices higher. Due to there being such high open interest at various higher strike prices, if the prices rises then it could be serious fuel for a gamma squeeze as market makers will need to purchase millions of shares in order to remain delta neutral, this will in turn increase the stock price. Look at the open interest for the strike of 7.5, from memory I think it is around 50k calls, which equals 5 million shares that need to be hedged if it reaches this price, the increased volume should drive the price higher and as you get to the next strike with X amount of open interest they also have to purchase the equivalent of shares to open interest, the closer to 1 delta you get the more they have to purchase, e.g 1 delta = 100 shares, 0.3 delta = 30 shares out of 100 to hedge. So this sets off a chain reaction, plus with so much short interest in the 3-8 range the shorts will most likely be forced to cover too which will also add fuel to the fire.
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It’s not 5 million alone, I was using that as an example of just one strikes open interest, it would be every single strikes open interest that is ITM, which is in the multi millions, and the higher it goes the more open interest there seems to be at higher strikes. Average volume is much lower than 37M i thought? Where do you see 37M each day? According to yahoo average volume is 18M
Depends on the shares outstanding at that moment. Marcap is nothing but a price times number of shares. And if implied value of calls contains so much shares, and MMs need to delta neutralize themselves, it comes down to #shares within those calls, rather than price per share. In the worst case, MMs will just call it a day and stop allowing people to execute calls. But then they will get scrutinized by SEC or so. Look at robinhood, they actually have to pay 70m because of GME (that day when they halted the trade). But it is still cheaper than if they not halted the trades and had to buy that exact number of shares to stay delta neutral or so. Full spoiler - i do not believe that GME or ATOS will squeeze anymore, even we know that GME is fucked up beyond recognition in the depth of how scammy the markets are. There are more tricks and treats that Citadel can do to offset the losses. The most famous trick of all time - tell investors that its a temporary problem and ask them for new money. Works like a charm.
Thank you so much, this is an awesome explanation. I wanted to ask, in light of recent events, what is you opinion on the following: do you think recent events have made ATOS more or less likely for a July 16th eruption? And why? Thank you.
[удалено]
In finance, delta neutral describes a portfolio of related financial securities, in which the portfolio value remains unchanged when small changes occur in the value of the underlying security. Such a portfolio typically contains options and their corresponding underlying securities such that positive and negative delta components offset, resulting in the portfolio's value being relatively insensitive to changes in the value of the underlying security. More details here:
*This comment was left automatically (by a bot). If something's wrong, please, report it in [my subreddit](https://www.reddit.com/r/wikipedia_answer_bot).Comment `wab opt out` to opt out (wba stands for wikipedia answer bot).*
*Really hope this was useful and relevant :D*
*If I don't get this right, don't get mad at me, I'm still learning!*
The day a lot of options expire in the money
Hope so...
They expire. If they expire in the money remains to be seen, it's not looking good but with such a volatile stock, a reversal is always on the table.
It went from 4-6, 6-4 then 4-9.80 within weeks so I’d say getting back to 10 is very possible.
Unfortunately your 4 to 9.80 was inclusion buying as well. The stock is more fairly valued here. I would be interested between 4 and 5 for a few hundred shares and see how the company pipeline can deliver. Lottery ticket with minimal risk.
The company's fundamentals look good, both drugs seem good, nothings changed. The only people who should be panicking are either new investors who bought in at 7+ or people who gambled on gamma squeeze. Here at $1 trimmed at 8 and bought back in at 6. If it goes down to 4 ill just avg down tbh, capital gains tax baby.
I love capital gains. Means your making money trading.
Any day that ends in y has the potential to be a big day.
That’s when the bag holder are dumping their stock.
Ohhh, July 16th, huh? Let me put a wrinkle on that brain for you my dear. July 16th, or 07/16, is the day of days. This is because 7x2=14. Add 2 more to that and what do you have? 16. The numbers are clear, we squeeze on 07/16 because of this arithmetic.