Hey: hey, hey! It's your boy, fat albert, oh baby, we're back again guys welcome back to the channel. What is up, everybody welcome to trace trades, where you have technical analysis and different stocks in the stock market, as well as potential buy, hold or sell opinions on these. Given stocks like the profits by saying that i'm not a financial advisor nor experts, don't take what i say: the grain of salt, let's get into the video today, my friends we're gon na give you guys an update on uh my particular game plan. In regards to the amc's situation, the gamma squeeze the short squeeze the whole nine yards, so we're gon na give you guys a very basic rundown on why this game of squeeze is so important.

What we can do moving forward or what i'm going to be doing. Moving forward to to kind of attribute to the cause right and then you guys can make your own financial decisions based on that alone. So one thing i do want to say right off the bat is options are risky right. Options are essentially betting that a stock will go up or go down, and if it does not do what you desired right, you can walk away with none of your initial investments.

So i really do urge anybody who is not comfortable with options. Anybody who's not a well-versed investor or trader to stay away from options and solely trade. The stock, you know, hold specific shares in the company right and that will treat you pretty dang. Well, i do, as you can see, have a position in amc of 1 367 shares at a dollar cost average of 8.45 7 and i've been adding my position as much as i can, and options are going to be a way that i decide to do that.

So we've got quite a bit to talk about here. Let's get into the video i've thrown together a very uh mediocre. You know slideshow, and i want to just address this. So, as i just mentioned, don't play options if you're new tt, that's me: trace trades wearing these uh stupid glasses, all right, so anyways options, basics.

What do we have here? So basically what you have for options? Basics is a bet that a stock goes up or down, so what you're doing if we come over here to call options right? We just check this out on amc. We've got calls so looking at a 10 call. Essentially what you're saying is hey. I think that by 5th of march 2021, amc is gon na be more than ten dollars right.

You would pay 57 cents per share for the premium, which would come out to 57 for a total. You know one option or one option: uh contract share of uh. You know ten dollar strike right, so that's what you're betting on you're betting, that a stock goes up on the flip side. You've got puts so you'd be betting, hey.

I bet that the stock price is going to be underneath 12 by 5th of march 2021.. You'd pay 465 per share for that right and that would come out to 465 for that single contract on the put so you're betting that that a play or a stock will go up or down calls are bullish in nature, meaning you think they're going to go Up puts are bearish in nature; that means they think it's going to go down right and then i've got in the money out the money at the money. What do these mean - and why is this important right and the money refers to a strike prices underneath the market value? So as an example, if you come over here to amc, which is currently trading at eight dollars and twenty cents very simply put right, you've got eight dollars strike in the money at one dollar and one cent and uh. That is basically saying hey.

I think that the the price on 5th of march 2021 is gon na, be above eight dollars that isn't in the money play because, as of this moment, it is trading underneath eight dollars and twenty cents. The current market value at the money refers to being. You know specifically at the money, so perhaps a better example would be. You know if i refer to six dollars as in the money.

Eight dollars is pretty close to at the money. It's very close to that eight dollar strike right now. You've got out the money. This is essentially a strike that is over the market value, so it's trading eight dollars and 20 cents right now.

If i were to make an option, call and say: hey, i think it's gon na be over 15 on 5th of march 2021. I'm betting on the fact that it's going to be above the current market value price, or it means that this play is currently out the money right. I'm not i'm not up on my investment in this in this stock. As of yet and you're going to see a direct correlation in plays that are in the money very deep in the money, uh and also you know, plays that are at the money or out the money right.

The premiums are going to look a whole lot different and we're getting into that more in a little bit, but that is, you know, a basic overview and something that i want to point out. So what is the importance of this right? What's the difference in risk and premium or as i like to call it insurance right so in the money you've got a higher cost because there's low risk of you coming out the other end of this there's a very, very high probability that you end up making Money on your plate, so, for example, if we look at the 0.5 options, contracts expiring on 5th of march 2021, those are very, very deep in the money right. The odds of you coming out the other end without you know, being you know, having won that. Essentially call option are slim, which is why you would pay 7.70 per share for that contract right.

So in the end you're paying, you know just a little bit less for those hundred shares. If you decide to exercise than you would, if you bought them in market value, and that's because right, the the chances of you coming out on top are very high, so that very well reflects in the price action uh. You know for a better example: 5.5 there's still pretty good good chance that you come out on the right side of that right. If you made a 5.5 call option expiring 5th of march 2021, which is why uh, you know it's still a little more a little more expensive, but it's less expensive than 0.5, because there's less of a chance that it ends.

You know above 5.5 comparatively to that 0.5 contract right. So, as you go up, you know in price. The the price for the premium is going to also reflect on that. So it's going to go down in price.

You know. On the flip side, we've got at the money, you know it's going to be, you know a moderate cost. It's got medium risk out. The money has a low cost and high risk right.

So if i was to make a call option on the 20th of march 2021 uh, it would cost me 21 cents a share or 21. If i decided to exercise you know or just purchase that call option what i would be paying. If i decide to exercise it, though, would be that 20 per share, i'm essentially locking in that price, saying this is what i'm willing to pay right for this contract. Saying that i can, if i would like to purchase 100 shares at 20, now, don't pay too much attention to this right.

Now we're gon na get into the weeds a little bit more here, but the higher the premium right, the the less risk is involved. The lower the premium, the more risk is involved right. So we need to point that out right off the bat here, you've got a bag holder right, so there's a higher chance of being a bag holder. If you know you make a call without the money, you've got a case holder which is essentially a higher chance of coming out on the other end and making money which is typically tied with those lower risk, plays now.

What's the importance of expiration and premium. So a further expiration date means you're likely going to pay more premium now, let's just use an example here. If we look at the 10 strike expiring on 5th of march 2021, you'd pay 57 cents per share for 57 total on that one option contract. Now, if you look at that 10 strike on the 12th of march 2021, you're gon na pay a different amount.

It is a dollar and six per share which would come out to 106 per contract. The reason for this being the longer that you play a stock out, the more chance you have of becoming profitable in that play, which means you're going to pay an overall higher premium right. So that's something to keep in the back of your mind. If we take that same basis, right that same, you know that same fundamental overview, the closer the expiration, the lower the premium is going to cost because there's less chance of you coming out profitable on that trade, the price goes up, the more likely you become profitable.

So typically, you know this is very obvious. You got high risk, there's a high reward. Think of uh, i think of bitcoin low risk low reward. Now i shouldn't have drove doge there, but i just think it's funny uh.

You get the picture. Sorry to come over here to delta hedging and a gamma squeeze, and why is this important right? This is what i wanted to kind of discuss in regards to call options and why. I think it's important to talk about call options in regards to a possible gamma. Squeeze with amc what we can do moving forward to really help drive the price action, or at least what i'm going to do, moving forward to help drive the price action right, so you've got hedgy over here.

Hedgy is a market maker. Market makers have to essentially hedge or cover their their gamma or their positions. You know when call options come into a play right. They need to manage risk, they need to manage the collateral.

So if we look at the 5th of march 2021, you can see that there's a crap ton of call options that have come in you've got a bunch between you know: uh 50 cents and i would argue, 15 there's a huge amount of unusual call option trading. Taking place so hedgy over here, you know he doesn't need to necessarily disclose when he buys or or or if he buys right. He can decide to buy all of these at the last minute right before all these call options, expire - wouldn't be, you know, recommended, but he can so what he does to mitigate his risk. As he decides, all right, we've got, we've got, let's just say: 200 000 total call options which is worth uh, 20 million shares.

He says crap if i have to have the collateral for 200 000 call options that comes out to 20 million total shares, and i better make dang sure that i've got these shares now, where do they purchase these shares from right in case by off chance people Decide to exercise these options, they come from the market. They come from the market 100. So in order to mitigate the risk, they do something called delta hedging delta. Hedging is essentially something that helps drive the stock price and can cause a gamma squeeze because, regardless of the intent right, he's still purchasing those 20 20 million, you know shares at some point or another.

Now you're, not gon na see this come out. As you know, 20 million straight shares that are driving the price action all at once, which is why i'm going to lead into the next point you're talking about monday, but it does drive the price action. It can't take place over a significant amount of time. So, as there's continued unusual options trading right, these market makers need to mitigate the risk they need to have the collateral or the shares available to help drive this price action forward.

Which is why, when you see the call options on, let's say, gamestop right, gamestop started out as a game of squeeze that moved into a short squeeze. You had a crap ton of call options take place between 20 push up to 30, push it up to 45. Bouncing around a little while came up to 46 came out to 99 short squeeze begins right that gamma squeeze helped push into that short squeeze. Because of the unusual call options trading right that essentially market makers had to delta hedge right.

They had to manage their risk, which is what you're seeing take place here right. So that's very, very significant. Now. Why does this matter moving forward right? Because it's essentially, you can drive a gamma squeeze by continuing on with this unusual option called trading.

So what is something that i'm going to personally be doing right? What is what is trey's trades? You know personal game plan in regards to options. Well, i plan on doing my myself. This is not financial advice. Don't do what i do don't see as i do right, whatever you make your own decisions, but based off of the information that we know, what can we do to drive the the price action forward? We can continue to buy call options, so some call options that i'm gon na be doing some in the money call options right so based on that in the money call options expiring on, let's just say, 9th march 2021 or 5 march 2021, as i was so I'm gon na come back here to amc and i'm gon na show you what i've been keeping my eyeball on, so some call options expiring on fifth of march for the six dollar strike.

This is an example of something i find interesting. I would pay two dollars and 23 cents per share or 223 for a single option contract here on this stock right, if you take 223 times 100, because there are 100 shares here, you get 223 just move two decimal points to the right. So that's what i'd be paying for this premium right now and i that catches my eye, because the risk for this is relatively low right and if i decide to exercise it, i have the opportunity to purchase 100 shares at a strike price of six dollars, which Would actually lower my overall dollar cost average on the stock right which which helps me out, and it also helps out the situation with a gamma squeeze, because what you have here is that the market makers, hedgy edgy, still has to match the collateral. Because i plan on exercising that option call i plan on lowering my overall dollar cost average right, so he needs to purchase shares so that i can purchase shares if i decide to exercise it, which i plan on doing right to match that that call right.

So you can see here: we've got 32 000 call options which need to be delta hedge to begin with right, so me, adding to that personally, you're gon na see the market makers need to match that by delta hedging. So my personal in the money call or my call options that are, you know currently under the market value for their strike price. I am focusing on that six dollar premium not premium as i was strike price the six dollar strike, and that is because the risk for that is relatively low, and i can you know, help out in a couple different ways. I can lower my overall dollar cost average if it stays above six dollars solely depending on that right.

It would need to close above you know my break even price in order for me to come out on top of that right, so you can look at a bunch of different options. Calculators it'll tell you the math uh. If you'd like to check that out, all you have to do is google options calculators, but there's pretty good chances that i come out on top there now, if you want to lower your overall risk, even lower than that, you can pay a higher premium right, 2.61 Cents per share for the 5.5 325 for the five dollar strike. You get the picture here right, but still, if it if it closes above that five dollar strike, you have the obligation and the opportunity to purchase those hundred shares at that strike price, which is huge.

So that's what i'm gon na be doing personally, i'm gon na be buying some in the money call options at the six dollar strike, maybe the five and a half expiring on march 5th, and that is going to be a short term. You know goal that i have to help drive some price action. Okay, so that's number one number two is some out the money call options, and why would i focus on these if they're a little riskier right? Well, you can mitigate that risk in a couple different ways, so i would not buy call options expiring on the 5th of march 2021 that are way out the money. What i'm going to be doing is looking out here to june september and purchasing a higher premium for some call options that have a little less risk involved right.

So if you look at the strike here, two dollars and eight cents, we compare that to the six dollar right, it's relatively close to the same, and that is because the chances of me coming out on top on this out. The money call option are pretty high right now. Why is this important because you're paying the same strike for a higher overall, you know strike or the same premium. I should say, or actually a little bit cheaper for a higher strike, which is going to force market makers down the road to purchase.

More of these call options right so they're gon na have to they're gon na have to they're gon na have to uh hedge they're gon na have to match the collateral they have the shares available in case by the off chance. I want to exercise those plays, which i you know most likely will do right. It adds to the cause. So i in a very dumbed down way, if i were to purchase you, know five contracts right: five options contracts, whether they're in the money or out the money you have 500 shares total.

So you have market makers that need to have collateral for 500 shares by the off chance that i exercise these contracts. You don't necessarily have to go one way or the other. You can go in the money or you can go out the money, the big difference. Being out the money premiums are going to be cheaper than in the money premiums.

There's less risk involved in the money. You know: option play, there's more risk involved than out the money option plate. So this is where i say - and this is why it's so important guys that you are an experienced investor if you decide to play with options contracts, because you are betting that a stock will go up. I really really really urge you guys to be very careful and cautious if you're, not an experienced options trader to not play with this right.

My personal game plan is to purchase some of these six dollar strikes and some potential 15 strikes or 20 strikes or 25 strikes that are way out the money right. It's nowhere near that current strike price and honestly, if i wanted to, i could go even farther up than that. I could go up to you, know 40 and i would pay a dollar per share, which would be 100 per contract way out. The money right you've got a lot of opportunity over time to make that money back right to actually capitalize on it.

If there's a gamma squeeze or a short squeeze or whatever it may be right, but it still forces these these market makers to have to purchase you know the collateral that match up with each of these options contracts. So that is what is essential, and that's why i say in my previous video that we checked box one by closing over eight dollars right. We have begun the potential for a gamma squeeze. So what do we have here? We had a bunch of options, contracts that expired in the money right, meaning that there are traders out there that have the opportunity to if they, if they wish purchase if they have the collateral as well.

Purchase 100 shares at that designated strike price. That is factual right. The market makers. It's possible they're, already hedged, it's possible they're already hedged right.

Maybe they haven't, maybe they maybe they will on monday. Maybe you have that with a small amount, but the real you know big dinger here is that you're going to have. You know a significant amount of options, contracts exercises that are purchased at market value, coming up on monday right, whether it's 10 20 50 of those total options contracts that expire you have that there is going to be, i should say, market value at that strike price Right so at that strike, price, they're gon na hold those shares and they're gon na be purchased. So that's gon na affect the stock price.

That's box, one! We checked box one. This is box, one getting checked of that uh the gamma squeeze potential right. So to continue this, what is the momentum moving forward? We have to have continued options, contracts that are being purchased, whether it's in the money out the money at the money right. This all contributes to the cause, because delta hedging takes place right.

These market makers purchase those shares at market value in order to mitigate the risk and that drives the price action up. I've seen some people that have been speculating, they say trey was it possible that we saw a little bit of a game of squeeze already. You know from from five dollars up to eleven dollars and it's possible right, that'd be a hundred percent gain, maybe a hundred percent gain, and that would explain why you're seeing some of this hedging taking place. Why i saw some of that that price run up right, but that would not explain why we saw a significant sell-off right, so the short positions here are still 100 relevant right.

I think if this was a game of squeeze, it was a relatively small one. This is nothing in comparison to what we saw take place with gamestop or amc in the past, but nonetheless it was a setup right. We're getting set up for the next huge possible run. Now, there's nothing guaranteed about the situation guys, but there is a setup 100.

There so to continue right. What are we looking for? We're looking for that gamma squeeze to essentially eventually lead to possibly another gamma squeeze, possibly to another gamma squeeze as many times as it takes for short positions to cover their positions, to say: oh crap, oh my god. I am way out right now. I'm getting crushed, i've got the potential for infinite losses.

If this keeps running i'm going to get crushed, so i better cover my positions and that can lead to a short squeeze right. So that's the next box of check and that's what you saw take place with gamestop right, gamestop got short squeezed gamestop got absolutely squeezed like a lemon. She got run to the moon, she got, she got crushed and the potential is 100 there with amc. Something, i think is significant.

I've seen this talked about quite a bit, we're going to kind of flip gears here, there's a huge buyer that came in at the end of the market day. On friday, we saw about 8 million dollars of total stock that was purchased. It was somewhere around 900 000 shares, which would actually be more than the 10th highest owner currently of amc, which is lmr partners llp, which raises the question. Was this an institution that stepped in, or was this a retail investor that stepped into the stock and help the cause? It's very possible? You saw us, be an institutional investor right um! It's something that raises a little bit of concern is the fact that it was two back-to-back 450 000 uh, 450 000 share stakes that were taken, but nonetheless, whoever made those purchases are now the 10th highest owner of amc.

Look at all these huge stakes that are currently being held in amc right now. 7.5 million shares 5.6. 4.6. 3.2.

2.1. You guys get the picture here. It's astronomical. These are huge huge stakes that are holding amc.

Look at the mutual funds holding amc. We've got a lot here as well. Right we've got 2.3 million, we've got 1.9 million shares, we've got 1.7 million shares the point being there's some big big names right now and amc that are holding stock and the potential is 100 there to keep this movement going. I don't think you would have seen that 900 000 share stake being taken at the last second of the bell.

801. 800 freaking, one baby. If this was not uh still a live ball, not a big cat, not a dead cat, not a dead cat, not a dead cat. You get the picture guys.

This is huge. This is such big news and, honestly guys. This is so simple right. This is so simple to continue the potential for this to run.

You need two things. You need a continuation of short interest which we have. We have high utilization, you need a continuation of unusual options trading and honestly, a third thing would be. You need a continuation of people to hold and buy this stock right.

All these things contribute to the overall cause and the potential for this to have a crazy, crazy run-up. So that's my personal game plan guys coming into this on monday open. I am 100 planning on coming into this and purchasing some in the money and out the money options. Contracts, the in the money ones march 5th right, i'm gon na buy either 5.5 or the six dollar strike.

Whatever you know, i feel, is best at market open. I'm gon na buy some out the money options, contracts that are further out on expiration, so i can mitigate my risk right have a high potential for growth because we don't like gambling in the market - we're not here to do that right, we're here to make as Much educated decision-making as we can, so we can set up for a solid potential for a game right and that's what we're looking at. So that's what i wanted to touch on the most here in this video. I'm gon na just show you a brief overview of the ortex numbers in regards to amc, we're gon na see, if there's anything, that's significantly different, but i anticipate it's not and sure enough.

It is not: we've got 93.9 utilization, meaning that only 6.1 percent of the total utilizable short lendable shares are available for shorting. That's astronomical days to cover here is a very skewed number and i saw this on uh. Maybe it was discord stock twist, but somebody was talking about the days to cover if you change it to a one month, average volume and it was like 2.65. Why is that important? Because the higher days to cover the more difficult it is for shorts to come out positive on their positions, so that's huge.

That's a huge thing to keep. In the back of your mind, we've seen the cost to borrow, has been going up as well. According to fintel right, if we look at the amc, short interest, amc short interest right, you can see there's a significant amount of interest accruing on. These plays four point: two: nine percent.

It was at six percent of one point on on friday right, so this is going up because there's more risk for shorts to hold their positions, which just further affirmates our our consensus, which is there, is still live action. This is not a dead cat. There's still potential for this to squeeze, so that is what i've got for. You know what what i'm personally planning to do to help drive the price action here to to to play this as best as i possibly can so just give you a quick recap: i'm going to be purchasing some in the money and out the money options contracts.

I'm going to continue to buy and hold right, and i'm going to keep you guys updated with everything that i can regards to the short interest, and that is what i have for the video today. If you enjoyed it, please drop a like if it does help support the channel and consider subscribing if you'd like to see more content like this. Lastly, i'm going to fill in the description box down below for weeble. This is version 4 for the desktop great platform that allows you to start trading at 4am in the pre-market.

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