$PENN STO 1/29 95 put at .80
$PENN STO 1/29 95 put at .80
BTO 50 put calendar @4.85, 1/29 2/5 when GME was at 70
May roll into BePS if GME doesn’t get down to 50 this week.
Bought to Open GME Feb 12 2021 17.0 Puts / Sold to Open GME Jan 29 2021 30.0 Puts @ 0.15 Credit
Bought to Open GME Feb 19 2021 15.0 Puts / Sold to Open GME Jan 29 2021 29.0 Puts @ 0.13 Credit
Paired off with my one crazy GME Call Spread
GME = 75.0 after almost hitting 160 earlier today
Also holding 2 lottery tickets 02/05/2021 12.0 Puts left over from the spread I did last week.
Explaining The Action: Benzinga PreMarket Prep co-host Dennis Dick and Tim Quast, founder and CEO of ModernIR and Market Structure Edge, discussed the short squeeze trade on Monday morning’s show.
“There are people arguing with me that GameStop’s fundamentals have totally turned around and this price is justified. And I’m trying to say this has absolutely nothing to do with company fundamentals in a move like GameStop,” Dick said.
Related Link: GameStop’s Power Surge: Will WallStreetBets Or The Short Sellers Come Out On Top?
Citron Research editor Andrew Left has taken a lot of heat from critics since taking a short position and setting a $20 price target for GameStop earlier this month. Quast said the difficulties Left and other small-time retail traders face in timing these huge runs is that they don’t have access to the same real-time information that large market makers like Citadel Securities do. In addition, the market makers don’t have to play by the same rules.
“This is something that traders often don’t understand,” Quast said. “There is a market-making exemption for the Citadels and the Two Sigma’s and the Morgan Stanleys and the Goldman Sachs of the world where they don’t have to locate stock to short like you and I would…They have been granted an SEC exemption as market makers from having to locate shares. They can manufacture them.”
“This is how a stock can behave crazily. How is it possible that GameStop is up 817% prior to today…just in the last 90 days?” Quast said.
Short Interest Vs. Short Volume: Quast said there are important reasons for these exceptions to the normal trading rules for market makers, who are responsible for maintaining liquidity in the stock market. But traders must understand what’s actually going on.
“Citadel is going to know what the buy-sell balance is, and when it reaches a point of equilibrium, Citadel will shift short and we will see a mean reversion for GameStop. And the only way you will see that is by watching short volume, not short interest. It will be three weeks out of date, and it’s absolutely meaningless as a measure of float or total shares outstanding,” Quast said.
Quast said these “manufactured” shares produced by market makers are responsible for stocks like GameStop temporarily having short interest well above 100%.
Is This The End? The wild trading action on Monday comes the same day Goldman Sachs issued a note pointing out potential bubble valuations in 39 stocks. Goldman named Crispr Therapeutics AG (NASDAQ:CRSP), Snowflake Inc (NYSE:SNOW) and Plug Power Inc (NASDAQ:PLUG) among the most overvalued stocks in the market based on projected 2022 enterprise value-to-sales ratios.
At around 10 a.m. on Monday, many of the heavily shorted stocks associated with the recent squeeze began to reverse course, including GameStop. On Twitter, Dick speculated that the short squeeze trade may have finally capitulated to the upside.
“It’s cooling off rapidly in last 5 minutes. I think we just topped out,” he wrote. “We just saw ‘Peak Stupidity’ and everyone is learning the hard way right now.”
Benzinga’s Take: The GameStop run among retail traders has worked like a charm up to this point and has likely forced plenty of retail short sellers to cover their positions at large losses. However, successfully timing the entry and exit points in highly volatile short squeezes can be extremely difficult, even for professional traders.
BZ: Steve Weiss On CNBC’s Halftime Report Says Bought GameStop Puts In March Because ‘This Is All Going Down,’ Says ‘This Should Be A $2 Stock’
STO March 19, 55 puts at 1.47
Sold Feb. 12, 23 call for .71. Stock at 21.
BTC $ABNB Feb-05-2021 125/135 #BuPS @0.12 Debit. Was STO @2.00 on 1/12/2021
Bought to open VXX 02/19/2021 38.0 Calls /Sold VXX 01/29/2021 19.0 Calls @ 0.02 Credit
Bought to open VXX 02/19/2021 33.0 Calls /Sold VXX 01/29/2021 18.0 Calls @ 0.03 Credit.
These pair off with existing VXX Put spreads.
Sold to close the long Puts I owned against the short puts that expired Friday despite BB being up 45% today.
Sold to close BB Mar 19 2021 6 Puts @ 0.23.
Bought them @ 0.18 and they were fully paid for by Friday’s short.
#ShortPuts – Taking these a couple weeks early.
Bought to Close LAZR FEB 5 2021 25.0 Puts @ .15 (sold for 1.25)
#ShortPuts – Selling outside the expected move and down near the 200ma and a couple weeks before earnings.
Sold COUP FEB 26 2021 285.0 Put @ 4.20
Bought 1 GME 02/12/2021 100.0 Call while selling 1 GME 01/29/2021 80.0 Call @ 2.00 Credit on the open.
Execution prices were 22.0 for the buy and 24.0 for the sell.
We will see if the tornado bucks me off on Friday
STC $ABNB Jan-29-2021 $185 #Calls @9.6. Long side of the call spread from last week – was BTO @6.30.
Had a limit order in and walked away for 5 minutes. Should have been a trailing stop, as its higher now. Dammit. 50% profit on this side. Short side expired worthless over the weekend.
$NNDM STO 2/19 17.50 puts at 3.50. I’ll take stock at $14.
Sold to close SPY 01/29/2021 385.0 Calls @ 2.20.
Bought these on 12/22 at 1.83 and again on 12/24 at 1.33
Will buy a new long several weeks longer in time (at a higher strike) to hedge my short calls.
#SPX7dteLong Sold to close $SPX Jan 25th 3835/3815 put spreads for 2.20. Banking on call side for a better return. Condors bought last Wednesday for 15.55.