AMC hit higher.
Updated
Long term price target is $5.84 and I am short on AMC for that reason.
But I was hit unexpectedly due to the fact that the Market Maker Sweet Spot (The zone where most options will expire worthless) was around $35-37. Most of the options 100,000 Call option contract and 150,000 Put option contracts will expire this weekend. A lot of call option came into the market today driving the price higher. Trading volume reached average (173 million shares), which is unusual lately. People are gambling. especially when they get paid and buy short term options. We will see where the market goes but folks there are a lot of shares out there in the hands of the Market Maker and I would not be surprised if they bring the price back to the 37-35 Dollar range and next week when all the 50,000 Put options but 2,000 of them at the $30, will expire that we actually break below 30.
Yes there is a huge support at $30 where the Market Maker dont want the price to drop, for now, unless they want to pay out all the ITM Puts! That would be around 29 million Dollars. NOPE, they wont let that happen this week. But look at the second graph for next week. A totally different picture. It is thinned out. Not much happening there.
Then there is the price above $42. Yes, all Put options would expire worthless with Day to Expiration (DTE) this Friday. But more call options would come into play and the Market Maker would lose about 32 million Dollars.
On the other hand if the price stays between $35-37 the Market Maker would have to pay out only 1 million dollars in Call option and 4 million in Put options. This makes the most business sense to me, this is what I call the Market Maker Sweet Spot. This is the center of gravity.
We will see. I am not an financial advisor or an advisor to the market. The market does what it will. Dont take my word for it. Do your own research.
But I was hit unexpectedly due to the fact that the Market Maker Sweet Spot (The zone where most options will expire worthless) was around $35-37. Most of the options 100,000 Call option contract and 150,000 Put option contracts will expire this weekend. A lot of call option came into the market today driving the price higher. Trading volume reached average (173 million shares), which is unusual lately. People are gambling. especially when they get paid and buy short term options. We will see where the market goes but folks there are a lot of shares out there in the hands of the Market Maker and I would not be surprised if they bring the price back to the 37-35 Dollar range and next week when all the 50,000 Put options but 2,000 of them at the $30, will expire that we actually break below 30.
Yes there is a huge support at $30 where the Market Maker dont want the price to drop, for now, unless they want to pay out all the ITM Puts! That would be around 29 million Dollars. NOPE, they wont let that happen this week. But look at the second graph for next week. A totally different picture. It is thinned out. Not much happening there.
Then there is the price above $42. Yes, all Put options would expire worthless with Day to Expiration (DTE) this Friday. But more call options would come into play and the Market Maker would lose about 32 million Dollars.
On the other hand if the price stays between $35-37 the Market Maker would have to pay out only 1 million dollars in Call option and 4 million in Put options. This makes the most business sense to me, this is what I call the Market Maker Sweet Spot. This is the center of gravity.
We will see. I am not an financial advisor or an advisor to the market. The market does what it will. Dont take my word for it. Do your own research.
Trade active
Going over the Call and Put levels, I see that today there was a huge push of the AMC Ape Army. The trading volume was about the average, which as I said before is unusual lately, 170 million trades a day. Mostly Call options. Mostly short term, hence a gamble. The Call Put Ratio dropped from 1.9 to 0.5. Thus, most bets are bidding AMC higher. What is the Market Maker Sweet Spot and what will be the outcome for Friday.
There are about 300,000 Put and Call options to expire on coming Friday. There are roughly 24,000 Calls at Strike 40 and so are 15,000 Puts. This is the tail end of the Calls and the Head of the Puts. Meaning, This is the Market Maker Sweet Spot.
With AMC hoovering around 41,40,39, or even 42 and 38, the options will ALL expire worthless. Thats where they make the most money. Hence my bet is that the MM will try to keep the price in this range.
For next week as it looks right now, 98% of all put options will be expired and the resistance levels on the upside of AMC are 8,000 Call Contracts at $45 Strike and 15,000 at strike 50. The down side is open.
So it seems to me that the market maker can drive the share price down and selling some of their excessive shares, received from the expired call options. Remember the Market Makers are sitting on an excessive amount of shares due to expired call options over the past weeks and when you buy a call they will have to buy 100 shares to make it a covered call. But at the same time they might sell 100 shares a few minutes later for increased price to drop the price to their sweet spot level. Thats the game, bro.
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