Tag: Momentum Trading (Page 2 of 3)

Calls VS Puts: The Biggest Differences in Options Trading

Calls VS Puts
A simple guide to Calls VS Puts – Puts vs Calls – Calls vs Puts explained

This article is going to help new investors identify the difference between calls vs puts.

I’m going to provide you with a very simple overview and breakdown of what these two trading strategies mean in the world of options trading.

And if you’re not familiar with what options trading is, I will further explain that down below.

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What is a call option?

What is a call option?
What is a call option? – Calls vs puts explained

A call option is a bullish strategy that allows a trader to profit from a trade on the upside.

The trader essentially bets that the price of a stock is going to go up by buying call options.

How does a call option work?

When you open the options chain, you will have many contracts to choose from, ITM, ATM, or OTM, which I’ll use as a quick example for now.

If you are betting on the price of a stock to go up, you might buy a contract with a strike price of a few dollars above the underlying securities’ current price, depending on your risk.

If the stock does indeed move up in price, you will begin to see gains on your contract.

You may then sell your contract and profit from your play when you are ready.

What is a put option?

what is a put option?
What is a put option? – calls vs puts options – puts vs calls stocks

A put option is a bearish strategy that allows a trader to profit off a trade on the downside.

Unlike calls, traders buying put options are betting the price of a security will drop.

How does a put option work?

I’ll use another OTM example for now and explain the other scenarios below.

You will have many options in the options chain to choose from.

Here you will be able to select a contract to buy based on the ‘strike’ price you’ve selected.

The strike price you’ve selected is where you believe the price of a security will go down to.

If a price of a stock is at $20 and you buy a contract for a strike price of $17, you’re betting that the price of the stock will fall in the future.

If the stock falls to $19 then $18, you will begin to see gains on your bet.

The closer the price of the underlying security gets to $17, the more gains you will see.

You can then close your position at any moment before the contract’s expiration date and take profits.

Both these examples are examples of an OTM contract which I’ll explain more below.

Here are other examples of how calls vs puts work.

What is ATM and ITM?

ATM vs ITM
Options trading: ATM vs ITM

ATM stands for “at the money”.

At the money (ATM) is the current price a stock/security is trading at.

When your strike price is near the current share price this is considered to be “at the money” (ATM) for both calls and put options.

ITM puts

ITM stands for “in the money” and will be a little different for puts vs calls.

When a strike price is in the money for put options, it means the price is above the “at the money” (ATM) price.

Example: You’re betting the price of a stock will go down, so you buy a put options contract “ITM” for $11 while the stock is currently trading at $10 (ATM).

You contract has a higher probability to earn gains since the current share price (ATM) is already below your strike price (ITM).

The further the price of a stock goes down from your strike price, the more money you make.

ITM calls

When a strike price is in the money for call options, it means the price is below the ATM price.

Example: You’re betting the price of a stock will go higher so you buy a call option contact “ITM” at $9 while the stock is trading at $10 (ATM).

Your call option contract has a better probability of making money from the start since the current share price is already above your strike price.

If the price of that stock continues to surge, then you will continue to make gains.

“In the money” (ITM) contracts are a little more expensive to buy since your probability to make money is higher.

“At the money” (ATM) contracts which are closer to the “current” share price had a medium risk factor and are cheaper than ITM contracts.

So then what are OTM contracts?

OTM “out the money” explained

OTM Explained
Calls vs puts explained – OTM – Calls vs Puts options

OTM, or “out the money” is the strike price above the ATM for calls, and the strike price below the ATM for puts.

Call option example: If you buy a call options contract OTM at $12 and the price of the stock is currently at $10 “at the money” (ATM), you are betting the price of a stock will rise above $10 per share.

Put option example: If you buy a put options contact “out the money” (OTM) at $8 and the price is currently at $10 “at the money” (ATM), you are betting the price of a stock will go below $10.

Remember, the closer a stock’s price gets to your strike price, the more gains you will reap.

So, the further out the money your strike price is, the higher the reward may be.

Should you buy ATM, ITM, or OTM?

Every trader will use the strategy that best tailors to their risk.

  • Out The Money (OTM) = High Risk / High Reward
  • At The Money (ATM) = Medium Risk / Medium Reward
  • In The Money (ITM) = Low Risk / Low Reward

Traders will need to study the performance of an underlying asset to get a feel and understanding of where the price may go.

Once you have determined whether you will be buying puts vs calls or vice versa, then you may begin to look at the contracts available.

Options contracts explained

Every 1 contract equates to 100 shares of a particular stock.

OTM contracts are usually less expensive.

With these contracts you can buy 100 shares of a stock for only cents.

ITM contracts are more expensive because they are the safest choice.

ATM contracts are in between ITM and OTM in pricing.

The options chain will allow you to choose when contracts based on short-term or long-term expiration dates.

You can go short or long on both a call and put options contract.

These expiration dates may vary from only a few days to weeks, to months, and even years.

Whether you should trade short-term or longer-term expiration options contracts is a strategy that will be highly based on your trading goals.

Where can you trade options?

options trading with webull
Options trading with Webull – calls vs puts options – calls vs puts explained

The most popular platform to trade options is Webull.

Webull is where I personally began learning reading charts and familiarizing myself with the options chain and data.

Here traders will be able to purchase calls vs puts or vice versa.

Some traders use both strategies to make money during a bull and bear market.

Other platforms where you can trade options include:

  • TD Ameritrade
  • ETrade
  • Robinhood
  • Fidelity

If you’re already invested in stocks, you might already be using one of these platforms.

The difference between trading stocks and trading options is that you will need to open a margin account for options.

A cash account will not allow you to buy calls vs puts.

You can earn 5 free stocks from Webull when you sign up using my affiliate link.

If you choose not to keep these 5 stocks, you can sell them and fund your margin account to trade options.

Puts VS Calls: Why trade options?

puts vs calls: why trade options
Puts vs Calls stocks – calls vs puts options – calls vs puts explained

Buying puts or buying calls allow traders to bulk up on stock and use leverage to make money in the stock market.

There are 4 different ways you can trade options.

  1. Buy Calls
  2. Sell Calls
  3. Buy Puts
  4. Sell Puts

All four essentially allow you to use leverage and make money whichever side of the play you want to begin trading options.

However, selling calls and selling puts from the get-go will require further in-depth explanation, which I will do in another article.

For today’s breakdown, I’ve explained buying both calls and puts.

There are a variety of things that attract investors to trading options.

  1. Short-term gains
  2. Big returns
  3. Losses are limited to what you put in your contract
  4. Quick accumulation of cash / shares

If you’re here today, it’s because you’ve probably seen people in your space talk about how much money they’ve made playing options.

And while options can yield a full-time income stream, new traders should also be aware of the risks.

Is trading options risky?

Is trading options risky?
Calls vs puts options – puts vs calls stocks –

Trading options has its risks as bets aren’t 100% guaranteed to play in your favor.

However, there are a few things you can do to increase your chances at becoming profitable.

  1. Familiarize yourself with technical analysis / chart patterns
  2. Only buy what you can afford to lose

While traders can certainly trade based on market sentiment, it would be wise to gain some understanding of how prices move through technical analysis.

TA can help traders determine the trajectory of a stock’s price moves in the coming minutes, hours, days, and even weeks.

It’s best to armor yourself up and learn as much as you can to properly set yourself up for success.

If you’d like me to do a write-up on bullish and bearish patterns leave me a comment below.

When it comes to choosing between calls vs puts, it really comes down to adapting to the changes in the market to help you increase your income potential.

If you have any questions, be sure to leave a comment below.

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AMC Falls After Trading Halt: Was This Illegal?

AMC Falls After Trading Halt: Was This Illegal?
Trading halts cause AMC stock to fall more than 11%

AMC falls more than 8% the day after market makers halted trading, though the SEC has the power to halt trading as well.

The theatre chain stock had risen to more than $34 per share shortly after the market opened.

But a trading halt seized retail momentum causing the stock to plummet.

Coincidentally, GameStop was also halted as the game retailer soared to almost $200 per share.

Was this illegal? And should it be illegal?

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Who can halt trades?

who can halt stock trades
Who can halt stock trades?

Market makers, exchanges, and the SEC can halt trades.

As AMC falls, retail investors continue to ask why this ongoing manipulation in the market continues.

The question is who halted the trade of AMC and GME stock?

Prior to a halt, individual exchanges typically make an announcement alerting investors and keeping them informed.

Shareholders did not receive an alert.

So, did the SEC halt trading or was it market makers?

Most retail investors wouldn’t be surprised if it was both as the SEC Chairman Gary Gensler has not addressed retail’s concern.

The SEC has failed to address retail investors’ issues and has neglected to enforce proper measures against short seller market manipulation.

What is the purpose of halting trades?

The purpose of halting trades is to refrain investors from having a massive selloff, or in ‘meme stocks’ case, to refrain the stock from squeezing shorts from their positions.

Our financial system is in a great state of emergency at the moment.

And retail investors have created a disruption for just about every corrupt player in the game that feeds off of the small investor.

So, what can retail investors do about this manipulation in the market?

Retail investors must persistently raise awareness about the issues the community is facing.

The moment retail stops fighting for a fair market is the moment greed driven politicians and institutions win.

With enough energy and time, more and more people will begin to wake up to the truth.

Related: How do hedge funds manipulate the stock market?

Will these halts have a long-term effect?

AMC’s and GameStop’s trading halt might have slowed down the process of squeezing shorts, but only for a moment.

See, the data hasn’t changed despite the market manipulation.

And it’s true, the longer short sellers drag this momentum play the bigger the event will be.

That’s because the number of shares being loaned have reached an all-time high and they continue to multiply.

This applies to GameStop too.

Eventually they’ll have to buy these borrowed shares back.

How long will that take?

That will depend on how long they can afford to hold their positions since they pay a fee to short both AMC and GME stock.

Be sure to check out this article here for more on what will trigger AMC to squeeze plus data, chart analysis, and patterns.

Days to cover is going down

I want to share this chart with you really quick.

The grey line going up shows short sellers have more shares now to cover than they did back in January and May/June of 2021.

This instantly tells us AMC’s next runup is going to surpass that of May/June’s all-time high.

The purple line shows us the ‘days to cover’.

Every time AMC’s DTC went down, we experienced new ATHs.

We can see in the chart that the days to cover is coming down again.

As Trey says, this is not a dead cat.

Expect AMC’s next runup to be more violent than June’s runup last year.

Will this be MOASS?

You’ll have to keep an eye out on the short interest data to identify how much percentage goes down during the climb.

This will give us a rough estimate of how many short sellers are left in the play.

And as AMC falls today, keep in mind that the entire market is also falling.

Big price moves are coming for AMC, be prepared.

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AMC’s Surging Volume Will Trigger a Short Squeeze

AMC's surging volume will trigger a short squeeze
Volume will be a key component for another massive AMC runup

AMC’s trading volume surged to 147.8 million on Wednesday.

Prices have surged more than 39% in the past 5 trading days and almost 130% since the past year.

Investors who have held the stock since last March have more than doubled their gains in the theatre chain company.

It’s this same volume pattern that rocketed AMC to its all-time high of $72 per share last year.

However, there are more shorts to squeeze this year than there were last year.

Let’s talk about it.

franknez.com

Welcome to Franknez.com – AMC shareholders are having nostalgia again as AMC stock gains traction. And they’ve held for over a year because of what’s coming next.

Let’s dive right into it!

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“Let them eat crow” – Adam Aron

The CEO of AMC Entertainment Adam Aron took it to Twitter to express his thoughts on criticizers of his company.

So called ‘experts’ have been prophesizing the doom of the century old movie theatre company for over a year now in hopes to profit by short selling it to the ground.

However, the combination of a powerful retail community and innovation of the company have cost short sellers billions in losses.

And they’re not too keen on accepting AMC is no longer the company it used to be pre-pandemic.

This older generation of financial ‘experts’ have found themselves getting cornered by a new generation of educated and activist retail investors.

Retail investors today have exposed market manipulation and injustices in the system with a few predatorial strategies grabbing the attention of mainstream media.

Adam Aron has a message for the company’s doom prophets, “let them eat crow”.

To ‘eat crow’ is to be humiliated and shamed after being shown to be wrong or to be forced to admit one’s error and be publicly shamed as a result.

And criticizers have been a little too quiet as AMC’s share price has surged in the past week.

This is getting more interesting every day.

Short sellers have a serious problem on their hands

AMC theatre company is no longer facing pre-pandemic challenges

Short sellers are in quite a mess at the moment.

Retail investors are buying and holding the stock as long as it’s going to take to squeeze them from their short positions.

Successfully doing so will drive AMC’s share price to unprecedented all-time highs.

GameStop shorts are facing the exact same problem.

When AMC surged to $72 per share last year the short interest dropped from 20% to 14%, a 6% cover.

Today AMC has a short interest of 21% and the cost to borrow the stock to short it is slowly increasing.

Bookmark these daily updates here.

That’s right, shorts pay a fee for holding their short positions in AMC and GameStop.

And as AMC’s share price continues to surge, shorts will be forced to keep up with margin requirements as their balances drop or be forced to liquidate adequate short positions to maintain it.

AMC’s price will rise as new shorts begin to cut their losses and buy back their shares creating a domino effect of shorts closing.

This ‘buy-back’ will further drive momentum in the market and fuel price runups.

Similar to last year’s climbs.

AMC receives 2 short squeeze signals back-to-back

AMC volume triggers short squeeze signals
Ortex short squeeze signals – AMC Entertainment Holdings stock

Ortex alerted two AMC short squeeze signals back-to-back on Tuesday, March 22nd.

However, the stock has received a total of three short squeeze signals for the month of March.

These short squeeze signals essentially detect high probabilities of a short squeeze.

Such alerts are an indicator AMC has the perfect setup to squeeze shorts from their positions.

And while these signals don’t necessarily indicate a squeeze is about to happen then and there, it lets us know AMC is on the right track.

A short squeeze is imminent, it’s only a matter of time.

Will AMC’s volume continue to surge in the coming trading days?

I’d love to hear your thoughts in the comment section below.

Be sure to keep an eye out on the short interest and circle back for more market news and updates.

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New Data Shows AMC and GME Stock are Manipulated

Proof AMC and GME are being manipulated
Proof AMC and GME stock are being manipulated

Data shows retail investors aren’t selling their AMC or GME stock, yet both stocks continue to plummet.

Are their share prices being manipulated?

Retail investors have been at war with hedge funds since the buy button was deleted from purchasing ‘meme stocks’ back in January of 2021.

Regulators such as the SEC have been under fire as well.

The SEC announced they would be voting on hedge fund disclosures, the vote was approved 3-1.

Keep reading for the latest AMC and GameStop market data.

franknez.com

Welcome to Franknez.com – the blog where you can digest content on trending stock, crypto, and market news. Today we’re discussing market manipulation and anomalies in both AMC and GME stock.

Let’s get started!

I want to give a massive shoutout to the retail community who has been bringing light to this information.

Without you, the community wouldn’t be what it is.

AMC Market Data

AMC market manipulation
AMC price does NOT match retail buying and holding

The yellow you’re seeing in this market data by CheddarFlow is identifying the strength in buying and holding AMC stock.

The blue line you’re seeing is AMC’s trading price decline.

The price does not reflect the true demand for the stock; in other words, retail investors are not selling AMC stock.

So, why is AMC stock’s share price plummeting although retail investors continue to buy and hold the stock?

This anomaly seems to be blatant market manipulation.

Not only have hedge funds faced intense scrutiny for playing dirty, but many have defaulted or are losing money betting against AMC and GameStop.

Here’s what an accurate chart analysis of how this pattern should be in sync.

Peloton accuracy
Peloton sell-off matches price drops

As you can see in this market data analysis, Peloton’s blue line (price) matches the yellow pattern of investors selling the stock.

This is an accurate representation of what a sell-off looks like when compared to the price of a stock.

When comparing Peloton’s market data vs AMC’s, we can clearly identify that AMC’s share price is being manipulated.

AMC shareholders are not selling their AMC stock, but rather hedge funds are using loopholes to drive the share price down.

What about GameStop (GME)?

GameStop manipulation
GameStop market manipulation

We’re seeing the same market manipulation in GameStop as we are with AMC stock.

GME shareholders continue to buy and hold the stock as hedge funds manipulate the share price by tanking it.

Naturally, the demand seen by retail investors should be driving AMC’s and GameStop’s share price upwards, not downwards.

AMC and GME share price are synthetic

AMC and GME share price are synthetic

When comparing both AMC and GameStop’s data to Peloton’s sell-off, we can only conclude that AMC’s and GameStop’s share prices are synthetic.

They do not reflect the demand in the stock market nor the psychology and sentiment within the communities.

The ape community has always been right when it comes to the nefarious strategies used to suppress the share price of these stocks.

Both AMC and GME stock are heavily shorted at 20% short interest according to Ortex.

However, the short interest reported can certainly be much higher that what Ortex, S3, and Ameritrade are being given to report.

Leave your thoughts in the comment section below.

What does this mean for retail investors?

franknez.com

Retail investors who own shares in both AMC and GME stock have been experiencing a slow bleed in the markets.

The drops seem to be synthetically produced and are out of retail’s control.

Raising awareness of this market manipulation is the best fighting chance retail investors have.

There’s a massive suppression preventing AMC and GME stock from running a natural course based solely on supply and demand.

All activists fighting for a fair market should remain headstrong in creating change.

Lifting this suppression will drive both these stock’s share price up inevitably forcing short sellers to close their positions.

Thanks to @therealdarkpool on Twitter for pulling up this data.

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Why Didn’t AMC Squeeze Last Year in 2021? [Deep Dive]

Why didn't AMC squeeze last year?
Why didn’t AMC squeeze? And can it squeeze this year?

Many of you might be wondering why AMC didn’t squeeze last year in 2021.

The stock had an incredible year overall.

Retail investors who got in for a short squeeze play early came up more than 1000%!

However, these retail investors knowns as ‘apes’ continue to hold the stock into 2022.

After all, people got in for a short squeeze play, not to make a quick buck.

So, why didn’t AMC squeeze last year in 2021?

franknez.com

Welcome to Franknez.com – today I want to touch topic on AMC since it’s been the most anticipated stock of all 2021. You’re going to want to stick around for this one.

Let’s get started!

AMC was one of the most searched for ticker symbols in 2021 and consistently trended on Yahoo Finance throughout the year.

Many of you aren’t new to the blog.

I was an early adopter in the AMC saga and helped a ton of people get in on this play early.

So, what was so special about buying AMC stock in 2021?

After GameStop’s share price increased to incredible levels nearing $500 per share, retail investors noticed AMC’s short interest was also high.

A high short interest meant the stock was heavily shorted therefore short sellers could be squeezed out of their positions, triggering a short squeeze (massive price flux.).

AMC experienced massive gains from $2 per share up to $20 per share.

Momentum then further escalated AMC’s share price to $72 per share before slowly cooling off to today’s price levels.

However, AMC didn’t fully squeeze last year, it merely removed small shorts from their positions during these runups.

But more on that later, let’s break down what is currently going on with AMC stock.

AMC Continues to Be Shorted

AMC Short Shares Available to borrow

AMC was one of the heaviest shorted stocks in the market last year.

Though mainstream media might claim that AMC squeezed last year, it only experienced gamma squeezes (momentum).

Because the short interest did fluctuate, we can access that some short covering did indeed occur.

However, AMC’s short interest is still relatively high.

When AMC soared to $72 per share last year the short interest dropped from 20% to 14%.

AMC’s current short interest is at 20%.

AMC Short Interest 2022

This means there’s ample room for AMC’s share price to continue surging in 2022.

Why didn’t shorts cover their positions in AMC last year?

A few short sellers did cover their short positions in AMC last year, though according to the short interest many open positions remain.

In fact, according to the short interest data, there’s approximately more than 102 million shares on loan that have yet to be closed.

Financial institutions have to close these positions at some point, and that’s whether they’re profitable or not.

Because short squeeze plays are rare, we’re learning more about their development through AMC and GameStop.

The matter of the fact is that AMC Entertainment is no longer going bankrupt so even if the share price drops below $10 and shorts cover profitable, we can expect to see a massive runup from the buying pressure happening all at once.

Why bigger shorts didn’t cover AMC last year is almost like saying why didn’t retail investors sell their stock last year.

Both retail and short sellers are going long on AMC Entertainment stock.

This means eventually individual people from both groups will begin to cave in.

And it’s an entire ecosystem of some taking profits or cutting their losses.

As AMC’s share price continues to drop in 2022, it provides short sellers with open positions in AMC from last year to finally close this year.

The results?

Massive price movements.

Market manipulation events

Market manipulation exposed
Market manipulation exposed

Retail investors who bought AMC stock last year saw a number of ways hedge funds manipulate the market.

From borrowing shares that don’t exist to short the stock, to OTC trading and dark pool trading, retail saw it all.

These predatorial strategies were used in efforts to discourage retail from further buying the stock.

Last year we saw Melvin Capital almost close if it weren’t for Citadel giving them a lifeline.

Mudrick threw in the towel and Archegos went bankrupt.

Anchorage Capital closed after 18 years; they had more than 4 million put options in AMC stock and were one of the top 10 institutional firms shorting AMC stock last year.

Another hedge fund on that list is Citadel Securites who lost billions in AMC in 2021, negatively affecting their customers.

Will this trend continue in 2022?

Leave a comment below.

How long can shorts drag not covering?

Just as retail investors can go long on a stock for many years, short sellers can also drag not covering for long periods of time.

This squeeze play will have intermittent episodes where we see some covering before new shorts open a position.

AMC Entertaiment is a hot spot for short sellers to bet against the stock and the company’s progress.

Will AMC Squeeze in 2022?

Why didn't AMC Squeeze in 2021? Can AMC squeeze in 2022?
Why didn’t AMC squeeze in 2021? Can AMC still squeeze in 2022?

As AMC’s share price continues to tumble, short sellers may begin to take profits by closing their short positions.

It’s this buying pressure that will ultimately lead AMC to experience major price moves this year.

Whether these price moves will trigger a chain of short covering or not is an event that has yet to unfold.

Could AMC squeeze in 2022?

Absolutely.

But while regulators fall back on the uncovering of synthetics, for now the short interest is the only data that confirms how much potential this squeeze has.

Don’t miss today’s topic discussion on YouTube at the end of the article.

You can read more about AMC’s short interest data for 2022 here.

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Why is AMC Stock Going Down? [3 BIG Reasons]

why is AMC stock going down?
3 Big Reasons why AMC stock is going down

AMC stock continues to have an incredible amount of demand for the stock, so why is AMC stock going down?

After all, the ape community has made it almost one whole year without selling the stock.

Shouldn’t big short sellers be closing their positions by now?

The answer is simpler than you think.

franknez.com

Welcome to Franknez.com – today we’re diving into 3 BIG reasons why AMC stock is going down. Here’s what you need to know.

Let’s get started!

Now, I published this same exact topic discussion on my YouTube channel so if you’re subscribed then you might have already watched it.

Either way, I will embed it at the end of the article for your viewing pleasure as it will enhance this article.

Why is AMC stock dropping?

why is AMC stock dropping?
Why is AMC dipping?

AMC stock has been dropping for a few months now.

Its steady downtrend has retail investors wondering what in the world is going on, and whether the stock will pick up again.

High rewards come with high risks, and it would be wise to remember to never overleverage your investments.

If you’ve bitten off more than you can chew, you’ll be happy to hear AMC’s share price decline is only temporary.

I said this earlier in our topic discussion on the channel; just like bull markets don’t last forever, neither do bear markets.

Eventually we’ll see a correction.

Let’s start with the first reason why AMC stock has gone down.

#1. Omicron & Covid news

Omicron news stock market

AMC stock is down due to various publishers pushing fears about Omicron and Covid news.

Now, AMC is not the only stock affected by this, the entire market has been hit because of the grim news.

Growing cases in the United States of the variant could cause businesses to have setbacks again.

Due to the uncertainty of how the variant will affect the economy, stocks are taking a massive toll from fear of the unknown.

AMC stock is down to a variety of reasons, but this economic fear is everywhere and is affecting the entire market, including the century old movie theatre chain.

#2. Adam Aron selling has driven AMC stock down

Adam Aron selling shares

Adam Aron, CEO and President of AMC Entertainment sold hundreds of thousands of shares, cashing in millions of dollars for his estate planning.

The admired CEO had notified shareholders of the company mid last year on his plans of doing so towards the end of the year.

Dumping hundreds of thousands of shares proved to move AMC’s stock price down as the ape community held.

While most of the community is indifferent about his decision, his actions moved AMC’s share price down significantly, especially due to a negative media.

Coverage by mainstream media only fueled this fire as more short sellers have begun to enter the play.

AMC’s short interest has risen from 16% to almost 20%!

When you combine the Covid news with bad press about the CEO taking profits, AMC’s share price is sure to take a hit as we have seen.

However, these two reasons why AMC stock is going down aren’t as big as this third one.

And I know many of you know where this is going.

#3. AMC stock continues to be heavily shorted

shorting AMC stock

Mainstream media might have painted a little picture about how AMC experienced a short squeeze last year but that’s far from the truth.

After all, these shill platforms are all tied together by News Corp., a company Citadel Securities’ Ken Griffin is invested in.

AMC stock continues to be heavily shorted even in 2022.

Hedge funds have been using market manipulation strategies to suppress the stock from squeezing them from their short positions.

These financial institutions lost billions from shorting AMC stock in hopes the company would go bankrupt in 2021.

Since then, hedge funds like Mudrick, Archegos, and Anchorage Capital, who betted against AMC Entertainment, have closed.

Big hedge funds such as Citadel Securities have not closed their short positions in AMC causing turmoil for their customers.

The multi-billion-dollar hedge fund has even received a lifeline of $1.2 billion from partners Sequoia and Paradigm, their first private funding ever.

Even as hedge funds overleverage themselves to drive AMC stock down, it’s only a matter of time before more begin to throw in the towel.

Here’s what to expect in the coming weeks

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AMC stock and the market in general will eventually start to see a correction.

Remember, bull markets don’t last forever.

However, keep in mind that AMC stock may still drop lower in price due to various market abnormalities (i.e., Omicron news, global market risks like Evergrande, market manipulation).

Related: How do hedge funds manipulate the stock market?

One thing is certain.

AMC’s short interest is more than high enough to squeeze shorts from their positions.

When AMC’s SI dropped from 20% to 14%, we saw the company’s share price surge from $14 to $72.

The short interest is nearing 20% again with other brokers showing much higher.

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“Dumb Money” Gained More Than 1200% in AMC Stock Last Year

AMC Dumb Money 2022
Should you invest in AMC stock in 2022?

Dumb money may not be so dumb after all.

The group referred to as “dumb money” ended up making significant gains in 2021 from AMC stock.

Retail investors who got in early made a whopping 1200% return in their investment with the share price only sitting at $27 per share.

Those who traded the stock back in June made nearly 3000% in return when AMC reached $72 per share.

Is dumb money actually dumb?

Here’s what’s next.

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Welcome to Franknez.com – the ape community made a ruckus last year and has become a beacon for change in the markets. There’s a lot going on this year and a lot more money to be made.

Let’s get started!

AMC stock took the internet by a storm all of 2021.

It was on the top 10 list of most searched words on Google, and it was the most searched ticker symbol in the markets.

Why did AMC get so much traction?

The story is incredible.

The Data Showed These Possibilities

AMC Short Squeeze Data

You might wonder, how the heck did this stock provide investors with more than 1200% in returns?

The truth is a small group of retail investors on Reddit’s r/wallstreetbets found data that predicted it to do so.

In fact, the data says AMC can still rise much higher than its climb to $72 per share.

See, we knew two things.

AMC stock was heavily shorted, and short sellers (investors betting against the stock), eventually needed to cover.

This meant that as retail investors bought the stock, the demand for it would increase the price, causing a short squeeze (massive price influx).

The people on the opposite side of the spectrum were hedge funds, financial institutions who lost billions of dollars betting the stock would go down.

In the midst of pursuing one of the biggest trades in history, retail investors were able to save AMC Entertainment from going bankrupt.

The century old movie theatre chain raised more than $2 billion dollars in cash and began innovating ever since.

Mainstream media fought hard

What surprised retail investors is how much mainstream media actually cared about their finances.

Finance media warned investors to stay clear from the stock, eventually attacking the company and anyone who invested in it.

The Fool, MarketWatch, Benzinga, Yahoo Finance, and other finance media began attacking the ‘ape community’.

Come to find out there was a massive conflict of interest given that all these news platforms were tied to News Corp., a company indirectly owned by the biggest hedge fund shorting AMC stock, Citadel Securities.

While mainstream media might have been able to scare a few people from their money, the ape community persisted to educate the public.

My platform introduced hundreds of thousands of people to AMC stock, and now millions.

YouTubers such as Trey’s Trades and Matt Kohrs used their channels to expose the data that triggered millions of retail investors to buy the stock.

As an early adopter, my blog has educated the public on the data that predicted these price moves and has fought for a fair market through investigative journalism.

Is the AMC short squeeze over?

is AMC short squeeze over
AMC Entertainment stock was the most searched ticker in 2021

The AMC short squeeze is not over, AMC’s reported short interest is still very high.

Although you cannot buy the stock at $2 or $5 anymore, entry at $25-$27 is very cheap compared to where the price can still go.

AMC’s share price rose from $14 to $72 when the short interest dropped from 20% to 14%.

The short interest is currently at 17% meaning shorts have opened new positions.

And as long as there are this many shorts betting against AMC, they have locked in positions to be squeezed out of.

Third wave price predictions are looking at AMC trading at hundreds of dollars per share.

As retail investors continue to buy and hold the stock en masse, AMC will continue to set new all-time highs (ATH).

Should you buy AMC stock in 2022?

AMC stock 2022
“Dumb money” is still buying AMC Stock in 2022 – AMC Short squeeze 2022

There are conditions to buying AMC stock in 2022.

First, be willing to invest money you can afford to lose because nothing is certain in the markets.

The stock market is a very institution-oriented device and still very much plays in the favor of banks and hedge funds alike.

Your risk tolerance will play a massive role in this trade but could very well be worth it.

To take things into perspective, majority of the community who got into AMC last year is still holding the stock even though they can cash out massive gains.

The reason being is conviction.

AMC has so much more potential, and we are all excited to see it come to fruition this new year.

If this sounds like it could be a play for you then you might want to consider it.

Opportunities like this don’t come very often.

I guess dumb money wasn’t very dumb after all.

Read: How to invest in stocks for beginners (step-by-step)

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Why You Shouldn’t Worry About Adam Aron Selling AMC Shares

AMC CEO Adam Aron sells shares
AMC CEO Adam Aron Sells Shares

AMC stock has been steadily stumbling and retail investors holding the stock are wondering why in the world Adam Aron is selling his AMC shares.

If you’ve been following the market news for quite some time now, you’ll know that Adam Aron advised about this many months ago.

In fact, he mentioned it twice this year.

Retail investors shouldn’t worry however, and I’m going to explain why.

Welcome to Franknez.com – today we’re discussing why Adam Aron is selling off AMC stock since there seems to be some concerns regarding this.

Let’s get started!

Adam Aron Sells Shares to Diversify Portfolio

According to Adam Aron, selling AMC shares has been a long-term plan he’s had to diversify his portfolio for estate planning.

The CEO had been transparent with his shareholders earlier this year regarding cashing profits in increments later this year.

He claims that at 67, it would be wise to diversify his portfolio.

Which makes sense given he has not sold one single share of AMC stock in the 6 years he’s run the movie theatre chain.

In this SEC filing you can see Adam sold 625,000 shares at $40.52 per share.

Not every ape in the community is on board with the CEOs decision, and I get that 100%.

However, it’s important to remember that retail investors own majority of the float, even if the stock is temporarily on sale.

AMC CEO Hedges Against Tax Bracket

Another reason Adam Aron sold a chunk of his AMC shares was to avoid a heavy tax bracket.

By selling AMC stock, the CEO was able to pivot and strategize against extremely high taxes.

Adam Aron has a unique standpoint.

One I personally think the community should not directly compare themselves to.

AMC CEO Adam Aron Sells Shares
AMC CEO sells stock

Adam Aron is expected to receive more shares as company incentives going into the new year.

It’s not yet clear whether he plans on selling more AMC stock in 2022.

However, he has expressed that he still holds well over 2 million AMC shares and believes in AMC.

The media seems to be trying to portray Adam Aron rather negatively for selling his shares, something he anticipated in the Q3 earnings call.

Should Retail Investors Be Worried?

While there’s some sentiment of FUD arising from this news, I don’t think retail investors should worry when it boils down to a short squeeze play.

AMC’s current share price is an opportunity for shorts to cover and for retail investors to add to their positions.

AMC’s short interest is close to 19%.

This short interest percentage is extremely high according to Kiplinger.

Overall, the strategy to buy and hold to squeeze shorts from their short positions does not change.

Adam Aron’s move to sell AMC shares is equivalent to a whale cashing in profits on the way up.

Yes, it affects AMC’s current share price, but as long as retail investors don’t dump their stock, a short squeeze play is very well alive.

What Are Your Thoughts on Adam Aron Selling His AMC Shares?

I’d love to know your thoughts in the comment section below.

Do you feel like Adam selling his shares was anti-ape or do you support his right to do so?

Do his actions influence your thoughts on the community, short squeeze play, or position in AMC?

Let the community know below.

And lastly, subscribe to the blog for more market news and other articles like this.

You can also connect with me on social media below.

Till the next one!

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Don’t Make This Silly Mistake With Your AMC Stock

don't make this silly mistake with your AMC stock
What will you allow your AMC stock to do for you?

AMC is forming a massive bullish pennant.

The stock had the same pattern months after the push to $20 per share back in January.

Five months later, AMC stock surged up to $72 per share in June.

Well now we’re beginning to recognize this massive bull flag again.

The next leg up will be massive.

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Welcome to Franknez.com – I hope everyone has been having an amazing time with the family this holiday season. Today we’re discussing AMC stock.

Let’s get started!

Some of you apes have been wondering whether AMC will squeeze this year or not.

Some are hoping AMC doesn’t squeeze until next year to reduce those capital gains taxes.

How long this bullish pennant will last for is hard to predict.

AMC Bull Flag

The last bull flag lasted for five months before it skyrocketed.

This current bull flag is going strong on its fifth month now.

A breakout could technically happen any day.

What Price Will The Breakout Take AMC To?

AMC breakout

I’ve stated in previous articles that I believe the next breakout could take AMC well into the low hundreds of dollars per share.

AMC’s share price multiplied five times from $14 to $72 per share.

If we look at the consolidation price of $38-$40 per share and multiply it by five we get approximately $200 per share.

This brief summary is simply based on a repeating factor.

It could be less, or it could be more.

Will This Next Runup Cause Big Shorts To Cover?

I think we could be seeing a much longer play than we anticipated here.

Let’s look at GameStop for a second.

GME stock is trading above $200 per share and still has a high short interest of 10%, meaning big shorts are still very well in this play.

AMC currently has a short interest closer to 16%.

We’ll have to keep an eye on this number to see how much of the float is still being shorted after the next major runup.

Hedge funds shorting AMC stock could cut their losses, entering the new year with a clean slate.

Or they can lose other Michael Jordan’s millions upon millions of dollars.

Do you think hedge funds will cut their losses?

Or will they continue to take a nosedive into the new year?

Let me know your thoughts at the end of the article.

Don’t Sell Yourselves Short

AMC looks as if it’s right on the peak of this bull pennant, right before another massive leg up.

Don’t sell yourselves short now.

This could very well be the last time AMC trades at its current share price, ever.

I reached my number of shares goal a while back, but have added a few shares here and there, you can view my purchases here.

Here’s an example of selling yourself short:

I, along with other apes could have sold our AMC shares at $72 per share.

However, we would be selling ourselves short because of where this third runup could potentially go.

How high will it go?

I’m not certain, but I do know it will be higher than the second run based on its chart pattern.

Only time will tell whether this next leg up causes a chain reaction of short covering.

One Thing Is Certain

This play will require serious patience.

We don’t know whether this play will squeeze shorts similar to how Tesla did or whether it will be a massive domino effect of shorts closing their positions.

Keep an open mind to seeing AMC continuously raising the bottom over and over like Tesla did.

This means there could be a third runup, and a fourth, and a fifth, and so on.

Though most of us would like an instantaneous short squeeze, I believe we should be open to all types of scenarios as to how one can happen.

Don’t Wing It, Have A Plan

have a plan for your amc stock

I published an article expressing my personal thoughts on an exit strategy guide months ago to prepare apes for when the time comes.

This of course is just my opinion on how to exit your positions safely, having made a lot of money.

The point of the article is to simply have a plan.

When you plan, you will execute better.

Are You Excited For The Next Runup?

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I sure am!

Are your family and friends investing in the stock market too?

If they’re not, link them to this step-by-step guide on how they can start.

I created it to save you time on personally walking them through.

With that being said, thank you for reading the blog today.

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How Will We Know When Shorts Cover AMC?

How Will We Know When Shorts Cover AMC

AMC stock is showing major resistance in the high $30-$40 levels. The short interest has gone down by 3.5% since it peaked, did shorts cover?

And if they did, shouldn’t the price have gone up?

This is a very interesting topic indeed. Let’s discuss it.

franknez.com

Welcome to Franknez.com – the blog that gives retail investors a platform. Today I want to discuss some key attributes that will let us know when shorts cover AMC.

Let’s get started!

But before I continue, I want to thank every single one of you who continues to share the content and who’s been supporting the blog all these months.

Identifying Short Covering

Short covering is what’s going to ultimately get you astronauts to the moon.

It’s a battle of tug-a-war if you ask me.

Except it’s not physical, it’s a mental game of strategy. And the first to cave in, loses.

Now, it’s worth mentioning that the domino effect may fall upon either side of the spectrum.

This means both long shorts and long retailers are susceptible to influencing one another.

The difference is whether we lend strength to one another, or doubts and fear.

In my list of 6 things retail investors should know about AMC, shunning negativity is one of them.

And for great reason.

The same way we can pull each other up, we can also pull one another down.

Short Interest Data

To the best of my knowledge, there are two major factors that will allow us to identify when shorts cover.

The first is through the short interest data.

What does short interest data tell us?

The short interest helps us understand how much of a stock’s float is being shorted.

It’s the number of shares that have been sold short but have not yet been covered or closed out.

short interest calculation

For example, a heavily shorted such as AMC has a short interest of 16.56% (currently).

Apple on the other hand has an SI of 0.62%.

Apple has almost no shorts to squeeze from their positions where AMC has 16.56% of the float shorting the stock.

That’s approximately 106.82 million shares out on loan that have yet to be covered.

So in theory, as shorts begin to cover their positions, AMC’s short interest data should begin to decrease.

Price Action Change

Another common way to identify whether shorts cover their positions is through sudden price movements.

Short covering adds momentum to the buying pressure of a stock which results in a spike or bullish run.

What makes identifying when shorts cover is that the price action and short interest data don’t align at the same exact moment.

The reported short interest doesn’t happen right away.

It’s actually released a week and a half.

However, when we look at AMC’s runup back in June, we see that AMC peaked two days after it’s last report high short interest.

See below.

It took two business days for AMC’s small short covering to take AMC from $31.81 to an all-time high of $72.62 per share.

The chart from Ortex below shows us a drop in short interest between the dates of May 28th and June 9th where the stock began to cool down from it’s runup.

We saw the short interest drop from 20% to 14.76% by mid July before shorts began taking new positions, further driving the short interest up past 19%.

And I know what some of you might be thinking. Shorts haven’t covered! They never did!

Community, I’m presenting you with data that shows how price fluctuated based on the short interest updates.

Strangely enough, when the short seller, not hedge fund, Iceberg Research announced they closed their short position in AMC, two days later we saw a very small increase in price action though retail volume was low.

People were quick to dismiss Iceberg simply because it’s one analyst publicly shorting AMC but I though the news was super bullish.

In fact, I hoped other short sellers would follow in closing too.

Will AMC Squeeze Based On The Current SI?

AMC Short Interest October

AMC’s current short interest as of the date of this publication is 16.39%.

You can keep tabs on the short interest update here where I update it daily from Ortex so you don’t have to buy it.

AMC’s current short interest by definition is considered to be extremely high.

There is more than enough juice to get some serious price action out of AMC with this data.

And of course, if more shorts begin taking positions in AMC then the short interest percentage will continue to go up.

Otherwise, we can expect it to stay the same if they continue to hold, or decrease even if very small short positions are indeed being closed.

With AMC’s short interest slowly going down and an incredible amount of short shares being borrowed, I’m curious whether their exit strategy is to heavily short the stock while closing smaller short positions.

You can see how many short shares are being borrowed daily via. StonkOTracker.

Tinfoil hat on but I can see a strategy where the amount of overleveraged shorting is countering any small short covering.

Even then, this scenario is just speculation to be quite frank.

If you have any idea why the short interest is slowly going down I’d love to hear your thoughts in the comment section below.

I’m confident others would like to as well.

A Short Squeeze Requires Apes To Play Offense

I just published an article on what will trigger AMC to short squeeze.

If you have not read it I strongly suggest you do so.

In short, heavy volume and buying pressure is what initiated strong price movement back in January and this past June.

The community has set a new bottom for AMC in the mid to high $30 levels.

Holding will merely sustain the stock there, and low volume will not create momentum.

If the AMC community is to squeeze shorts from their positions, momentum will be the number one factor to creating another runup before the end of this year.

Could an even bigger third wave shake bigger short sellers?

I absolutely think so.

The next runup would force new shorts to close at a higher price then the previous wave of short sellers did.

Again, this is based on what the short interest data and price action have reflected.

We’ve raised the bottom during every runup, we’ve raised the market cap, and we’ve raised the all-time high.

There’s no doubt in my mind we can finish the mission through continuous buying pressure.

What About Synthetic Share Covering?

Unfortunately, there’s no way of identifying the process of synthetic share covering.

The safest way to track this short squeeze play is through the data that is provided, such as the short interest data.

And although at times it may be skewed due to being self-reported, it’s one way of tracking the information.

Synthetics shares are one of those things that regulators have been turning their heads on.

While the community is aware of them and acknowledges the use of synthetics, I find it’s counterintuitive for us to rely on information that is not being publicized as precisely.

Especially if we are to make big money from this short squeeze trade.

Be open to it, dig deeper to fuel your conviction, but also have a plan and be prepared for anything.

Stay true to your conviction, and make sure you make an awesome trade as shorts begin to cover.

How High Will AMC Go?

At this point, the short interest percentage is our fuel.

We cannot predict exact numbers based on the data available.

However, the data does show us that with enough applied pressure, AMC’s share price will skyrocket.

Ladies and gentlemen, there’s no way you cannot make money from this play.

It will be up to the community as a whole to be engaged, and continue playing offense.

In a war of mental tug-a-war, this third wave could be our grand win.

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