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Why most options lose - In this video, I talk about max pain theory, strike pinning, and strategies to avoid losing on these practices.
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Good after evening gg gorilla gang, i got ta start out the video by saying. Oh, it is tough. Being a vikings fan. I tell you what that's probably the first time that i've seen uh a game-winning field goal work out like that, for the vikings and probably my entire life.

I don't know it's been a long time way past what my memory can recollect, but nonetheless, today i want to talk about options pinning i want to talk about the maximum pain theory uh, specifically amongst the stock market, because this is something that i see happen. Very very frequently and most apparent is in amc stock and i think there's a lot of people out there. I mean, i don't even think i just know, because you look at the options market on amc and it is so active all the time. The derivatives market on this is so active uh.

You can kind of get an idea of how this can be used against retail and those who are playing the derivatives markets, so we're gon na go over a couple different things here. I wan na go over what options pinning is i wan na go for maximum pain theory. I'm gon na show you a visualization of this and then i'm gon na apply it to this week's price action and what you can actually look at to get an idea of what exactly i'm talking about here in regards to the best way that you can protect. Your own capital, but before we get into it, what is up everybody on the trades trade? Three freaking talk faster, don't give class.

I compose if i say that i'm gon na find advice from they're going to save the great assault, let's get into the video. So today, my friends, my family, my fellow gang - i want to start off here with this article right here. It's called the max payne definition and to have an understanding of what this is essentially think of it as options. Market makers, right we'll be looking at the options or derivatives chain on any given day and they're going to look at where the most open interest is.

They essentially want to see hey. Where can we inflict the most pain? Where can we make the most bang for a buck, collect the most premium on any options and make them expire worthless? And if you were to look at amc, for example, on this, you can look at the calls. You look at the puts and have an idea of exactly what i'm talking about. So, for example, this week i would say that the two biggest max paying spots to watch for would be the 40 strike and then, secondly, that 45 strike - and what i mean by this is there - is a habit amongst market makers to want to pin the price Action to a specific price level, so they can have the most options, expire worthless as possible.

I'm going to talk about the way that you can actually prevent this from happening to you if you do choose to play options nonetheless, but that is that is something that uh does exist, the max payne theory. You look at the put side of things right with that b. That'd be the 34 strike because in the same way that they want the calls to expire worthless, they also want puts to expire worthless. So if we were to have a bearish week, for example, an amc went down to 34 dollars max payne level is gon na, be that 34 strike.

They want to hover it at the money or close to out the money for these puts so they can have those people there with those 10 000 open interest to potentially hold those strikes into expiration, so they expire, worthless, fun fact, most people that hold an option Into exploration end up losing not only some of it, but almost all of it, and that is built by designed to be that way, and that is the max payne theory. So, to put it into words, max payne or the max paying price is the strike price or the most open options contracts? It is the price of which the stock would cause financial losses for the largest number of options holders at expiration. So it is the goal. Think about it as two sides here: you've got the you've got the freaking lines and you've got the vikings.

It's the goal of the lions, essentially to hold the vikings to that max payne theory, which would be potentially today's game right. In this case, the officers market makers or the lions lost, but nonetheless their goal is to make them think they still have uh some morsel of hope, so they can keep driving it down and then, in the end, end up winning the game. Now, maybe that's a bad example, but nonetheless you get my point here. They want to keep you enticed.

They want you to hold that contract into exploration because it is close to at the money or in the money, but it's not quite there. That is the point of the max payne theory, and this comes into what i would call pinning the strike strike ping now. What is this? It goes hand in hand with that max payne theory. What they want to do is pin the price of any given stock near at or very close to in the money of that specific security.

So, in the case of amc right, let's just look at last week's price action. What ended up happening on friday? Well, you can see that this ended up closing off at about 37.19 but intraday. If you look at the price action, those options. Market makers give you this morsel of hope.

Thinking hey. I could end up actually making this run. I bet you money. There was a crap ton of 40 strikes on this heading into expiration on last friday, and this huge run up right.

You got this huge run from 37. Up to almost 39 gave people that morsel of hope i'd be willing to bet you there's some people that bought weekly expirations, just based on this huge freaking run-up right here from 37 30, all the way up to 38.78 and people got stuck in that and the Max payne theory kicks in they. Let this thing gravitate there for a while: they let it hover it hovers, it hovers it hovers and then it ends up selling off at the end of the day. So the max pay in this case, since the calls are the most accurately traded derivative on amc, was likely close to that 38 to 40 range and those ended up expiring, worthless.

That's options pinning so that is the the acting of market makers and any big firm who is actively trading options on the market to try and pin stock price in a specific area. Now this is not me telling you to stay away from options, because you can make money on options. There are lots of people that do it, but i think an important thing to note is holding into expiration is almost never going to work right. You're gon na have that one out of ten two out of ten times where holding an exploration you do get it right.

Where you get the right strike and stock ends up going ballistic goes parabolic and you make a crap ton of money, but these are designed by the casino for you to lose. Now, of course, there is an edge that you can beat right, but it's not very often so if you are going to play options, it's important to recognize these max payne areas. So here's a visualization of that. If you look at max payne for calls on amc, for example, this is just something that i drew up uh.

It does happen to coincide pretty well. It would just happen to be 45 dollars instead of 46. But let's just look at the calls for next week. Right 45 is a max paying area.

17 000 total open interest on a 45 dollar strike and then 40 has 10 000.. So a better visualization of this would potentially be if this was 40. But nonetheless, you can see that there's an increasing amount of open interest right. It continues to go up, go up, go up, go up and market makers will recognize this.

So a max payne area for calls on this given week would be that 45 to 46 dollar range. They are going to pin it at that specific level, because that's where they're gon na include the most amount of premium they're trying to essentially milk, the freaking nips out of any freaking heifer. That decides they want to play these weeklies and they take the money from that, and not only does that happen right, but you end up just losing it. You, you piss that that into the abyss i mean.

There's there's not much. You can do about that because that's the way the system is built, it's built to take advantage of those expirations on calls and or puts right. So what can you do to prevent this sort of thing? That's probably the most important thing here. Well, first off you have to understand options, there's lots of videos out there.

I've got a couple. There's other people out. There have great freaking information on how options work, but secondly, there's two parts to this. First off you have to be able to manage risk right.

Take the emotions out of any sort of options play and specifically with a squeeze play like amc where who knows when this thing's gon na make a big move because of this exact thing right this this pinning theory, this max payne theory, the options pinning right if You're going to play options on amc, don't hold it into expiration, right, you're, just risking all of your capital, because if it goes into expiration and it's not in the money, you lose everything. It's 100 loss right. That's not what you want to put yourself into uh. That's not a situation you want to put yourself into at all.

That's like that's like getting slapped by your grandmother. I want to get slapped by the grandma i'll. Tell you what not this chicken, not this chicken at all. So what can you do to prevent that? Don't hold options into expiration? I i really cannot stress that enough.

The the casino their edge continues to grow the longer that you hold the contract. So if a contract goes green, you see a reversal start to happen. Take your profits on that contract because calls and puts are entirely different from stock. They do expire, they do experience time decay and you can lose value because the house will try - and you i mean that's just as simple as it gets and you've seen this time and time and time and time again with amc right.

Let's just look at these weeklies this week. What would possibly have been? Let's just look at last week, for example. Last week they gave you this. This freaking hope that the stock was going to go absolutely nuts because of this huge major run-up i'd be willing to bet you.

There were people out there who saw this huge run up to 41.50 rejected right and they ended up buying in somewhere in this area. For some calls, and then it just ended up continuing to consolidate slightly pull back into the week right and those calls ended up, expiring, uh, potentially worthless, and that is max painter. That's options pinning that strike pinning to its very core. So be careful right.

I don't want people out there to be losing money if you don't know what you're doing with options. This is not me saying, don't play options right. You just have to know what you're doing and holding into expiration is almost always a death wish. I don't want that, for you guys, so just be careful right unless you plan on exercising your calls, in which case you've already likely been holding leaps anyways, which much much less risk to yourself as the individual party, with a leap unless you plan on exercising.

There's really no point of holding an expiration right. Take your profits, buy some stock. Do whatever you want to do, but just don't lose your money guys be careful. Keep keep uh, keep diligent and, most importantly, that money you make from an option, buy something lemon pap.

Attendees, you know what it is all right. That's what i've got for you guys so catch y'all, the next one blah blah blah. You know spiel drop like consider. Subscribing to my friends.

I don't care. If you do, i don't care if you don't but much love get to the next one. Peace.

By Trey

26 thoughts on “The sad truth of options”
  1. Avataaar/Circle Created with python_avatars ThatCrackShit says:

    I feel ashamed i have to do this but you didnt have to do my Lions that dirty lol we know we are a cursed team lmao. Love your content bud

  2. Avataaar/Circle Created with python_avatars Fox Mulder says:

    Dogecoin is the best investment in this century. Oh yeah, Bitcoin is going to go ballistic too Lets go Brandon

  3. Avataaar/Circle Created with python_avatars 73kepakepa says:

    This is why I gave up on options cause they let it run up and then run down only to never run back up again to at least break even.

  4. Avataaar/Circle Created with python_avatars sonny day says:

    My boy Trey is so animated .I played video without sound still entertaining .

  5. Avataaar/Circle Created with python_avatars Geraldo says:

    *Most options fail because you're buying deep otm calls, at a high breakeven, and buying on a spike, instead of a dip. Facts.

  6. Avataaar/Circle Created with python_avatars Usernamebreh says:

    Why would they make it public that they covered? It makes no sense but to show off.i don’t think they’re that stupid,something is fishy about it.

  7. Avataaar/Circle Created with python_avatars Meagan Hutchinson🌿🌾 says:

    I don’t understand the super high gamma sometimes though and my option doesn’t move. Hardly any theta and decent delta and no movement. Can you please do a video on this?? Ty!

  8. Avataaar/Circle Created with python_avatars Meagan Hutchinson🌿🌾 says:

    I have to learn to stick to my rules!!! And remember that every option is not supposed to be a yolo option!! I’m killing my own financial self lol. I do good and just like gambling, I put it all back lol. I hate the ptd rule though because I have been so up in the money so many times and then the next day gone! Ugh. It sucks!

  9. Avataaar/Circle Created with python_avatars B Powers says:

    Laughing at my Lions… cause they do what they do Like Hedge Fund Company's Just waiting to sell my 43000 shares at 49 and getbout I DONTN PLAY OOTIONS EVER!!

  10. Avataaar/Circle Created with python_avatars Danny Arthur says:

    Traders need a clear mind to identify favorable trade set up, and if they are consistently subjected to the stress and anxiety of losing trades, they will consistently mix the trade they should be taking. That's why I trade with Mrs Nicole Brusher, her set skills are amazing.

  11. Avataaar/Circle Created with python_avatars Philip says:

    Anyone can tell me anything, but I won’t sell my AMC shares. On the contrary, I keep buying more.
    And not only me… I’m sure retail owns more than double of what they owned back in June…

  12. Avataaar/Circle Created with python_avatars Sam A says:

    IRNT Gamma this week. 4mil OI on 4 mil float at $15. Can everyone on here buy 10 shares each? I always wanted to do the opposite of a short ladder attack, which is a bull ladder attack. If every1 buys 1 share at a time and does that 50-100 times, we could do what hedgies do by forcing the price up.

  13. Avataaar/Circle Created with python_avatars Gwil says:

    Hurry up and make a vid on DRS and computer share.

  14. Avataaar/Circle Created with python_avatars Eric Pfaender says:

    Quick question can institutions cover there short positions entirely in dark pool?

  15. Avataaar/Circle Created with python_avatars Joey Timm says:

    If you’re trading options don’t just sell when it’s green lmao. You need a strategy and a statistical edge.

  16. Avataaar/Circle Created with python_avatars Rob Davis RedneckPiasano says:

    Just the fact that you admit several times that these greed demons have complete control over a stock's price really tells us all we need to know. I plan on leaving the market post MOASS until (if) the day comes that there is fairness back in the market.

  17. Avataaar/Circle Created with python_avatars Dogenerd says:

    Thanks Trey This Helped me Out Man I Appreciate You

  18. Avataaar/Circle Created with python_avatars Richard Baptist says:

    Youre good at keeping things hyped… ill give you that but this is all bs..

  19. Avataaar/Circle Created with python_avatars QuebecOffroading says:

    It's really no different then how bookies make betting odds

  20. Avataaar/Circle Created with python_avatars Lewis Santos says:

    Despite the financial crisis, this is still a good time to invest in Crypto as the market is favourable💰💱

  21. Avataaar/Circle Created with python_avatars manny trujillo says:

    I'm not a financial advisor but been with amc since Feb. if you haven't gotten the trend by now you don't need to be in amc cause they have made it very obvious. mon and tues they let it rip, wed it consolidates, Thurs starts to drop and Fri they short the life of it. for amc do not play weekly options it's not a winning play. trust me just get stocks and if you do Play options play long ones . good luck

  22. Avataaar/Circle Created with python_avatars click /saudia Beyblades fun says:

    There is no theody you can apply on AMC or graph or tabulation
    Its very simple rich Hedges with alot of money they can do any thing they want with price
    They will not make the stick reach 30 as know as hi as 50s
    So best way hit and run

  23. Avataaar/Circle Created with python_avatars Quidpro Quo says:

    at any given time the price of any stock can be whatever price they see fit

  24. Avataaar/Circle Created with python_avatars Rodney R says:

    It's designed to make you lose. Who would have thought….

  25. Avataaar/Circle Created with python_avatars Bandile Bokamoso says:

    The philosophy of the rich and the poor is this the rich invest their money and spend what is left. The poor spend their money and invest what is left."

  26. Avataaar/Circle Created with python_avatars Harry Potter says:

    Sure sure.
    All we can do is hold on to it and buy

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