| Author | Source |
|---|---|
| u/juventinn1897 |
Top edit for fun:Â me and u/Suspicious-Singer243 rn
I am no professional and all of this is just my thoughts and opinions. Nothing I say is guaranteed or should be encouraging you to make any decisions. Always do your own DD.
For an unknowing amount of time, GME has been ramping up on t+21 Failure-To-Deliver cycles. It can easily be traced to January, where it starts to go cold. I personally think it started when Ryan Cohen bought-in last year, from there, the price has since never turned back. It is a good case for the start of using FD’s to hide shorts. Either way we know the SI% was up to at least 140% in early January and they never actually covered.
So the series of spikes I will detail are all the day AFTER t+21 in the FTD cycle. Jan 13 we saw the first “notable” spike which was 22 trading days after Dec 11 options expired. Jan 22 was 22 days after Dec 19 options expired. I dont credit the FTD cycle with these spikes but I think it was present and actively contributing to upward momentum.
Here is an image of those cycles
Now we also know that FuckFace Plotkin of Melvin Capital said when the price went up into the 70s (presumably on the 22nd into the week of the spike) Melvin decided to “Cover their shorts”. This is where I believe going into the week of the January spike, Short Hedge Funds (namely Melvin, Citadel, and co.) began their process of hiding shorts in FDs on the 26th. Take a look at the MASSIVE spike in Open Interest on DEEP OTM Puts the week of the January spike
This is where our recent major cycles started. I think they were super near term focused and strapped for cash, and just trying to give themselves an out, for as little as cash as possible. They got a large amount of Puts starting expiring Jan 22 on day of expiry for basically nothing, because they knew it was an easy way to cover some, with the window of settlement to be able to worry about any further issues. They bought puts for all throughout February into early March and had sufficiently “covered” their shorts. 109million shares worth of DEEP OTM puts were bought between Jan 2 and March 2. With the heavy concentration being in late January and early February.
You’re like… FUCK MAN ON WITH IT. Okay I get it. Jan 22’s t+21 date is Feb 23. The day before Feb 24 massive spike. Only a week after DFV did his first double down. Oh. We also saw thousands of high volume single transactions at the lowest possible strike of 0.5 in the days leading up. Feb 19 2000+qty @0.5 strike(price each unknown, total is $2000), feb 22 3000+qty @0.5 strike(price each unknown total is $3000), feb 25 3000+qty @0.5 strike(same, $3000). These can easily add up to well more but are a drop in the hat of what I am about to say.
Feb 5 t+21 cycle ends March 9. The day after we obviously saw a MASSIVE run up then crash. Leading up to this, on March 3rd and 4th we saw more deep OTM Put activity then the ENTIRETY of 2021 so far. Almost 1.1 Million DEEP OTM Puts bought on these two days. This image shows a comparison in the share leverageÂ
These Puts were pretty much ALL split between April 16 and July 16. Just to underline it.. 1.1 million puts is 110million shares. Almost 200% of the float. Check out the ridiculous volumes compared to open interests on March 3 and 4.
And then here is a graph showing volume of days options volume exceeded open interest
So directly after all these puts are bought, coincidentally equaling the volume previously bought during the year, to further delay the FTD cycle on FD’s, the price begins to ramp up hard. At the end of the day on March 4 it spikes hard to almost 150 before closing at 125. In 4 days it goes up 100 points to close at 248 on March 9. By 11:30 on March 10 the price is nearing 350 and gets reshorted to shit. I think they opened more shorting positions here to drive the price down. But that is outside the scope of this thesis.
Moving on, a massive amount of deep OTM options were bought for 4/16 expiry. 4/16 t+21 is TOMORROW. And we have barely seen a large amount of Put option volume in the lead up. This image shows the % of deep OTM Options used to cover which were purchased for 4/16 Notice how the Movie Theatre stock barely has any volume too.
We also have 7/16 which saw a large amount, but a slightly smaller margin than 4/16, and is a ways down the road. But for tomorrow, there are upwards of well over 50Million shares worth that has to be accounted for by end of trading! Definitely not enough have been bought so far. Only 61k of $2 puts bought on Thursday, could explain some of the spike.
Here is a my chart for the last 3 months on major FTD cyclesÂ
I just want to point out on top of the 50+million FTDs for April 16, DFV also bought 50k shares and exercised for 50k on that day, which has to be covered by end of tomorrow too.
I think they see this as a way to perpetually delay the inevitable by resetting their FTD cycle and allowing themselves to be on a synthetically “neutral” ground. But they have to get those options in order to keep it going.
I am also trying to see the reason to why exactly right after the t+21 cycle on the FTDs and the purchase of all these deep OTM puts drives the price up. There is definitely a correlation, I just need to figure out if it is causation and why.
Any feedback or criticism is more than welcome. Thanks for reading, have a great night. BUY AND HOLD
TL;DR:Â Tomorrow is end of t+21 for April 16 which had at least 30 million shares worth of FTD covers expiring. The last 2 times we a major t+21 FTD cycle ended was Feb 25 and March 9, the days before the price skyrocketed. Hedgefunds have covered over 110million shares worth of FTDs between April 16, July 16, Jan 21 2022 in deeeeeeep OTM puts.
BIG CREDITS to u/dejf2 for his DD Weeks AGO
link
EDIT 1: TY to u/TheDragon-44 for pointing out 13F’s are indeed due tomorrow too. Though I think that may be just info up to March 31.
EDIT2: I have stricken out the 50 Million shares worth because I think the 110 million is more split between April 16, July 16, and Jan 21, 2022 now. If you look at this, even though 3 weeks old July 16 has the 2nd highest Open Interest of any PUTS on the market for that day, which is insane. Almost 38 Million Shares worth. April 16 is like the same, I dont have the exact but I know it wasnt much lower. And as you can see Jan 21, 2022 has 250k OI. So they have already “covered” 25million shares until 2022. Its an absolute joke.
