AMC Short Squeeze Just Getting Started. WE LIKE THE STOCK!
Disclaimer: This is not trading advice, just my 2 cents of AMC stock speaking.
The Shorts.
AMC short calls came due last Friday. The chances of those hedge funds buying back their shares at market premiums is extraordinarily high considering nearly half of the calls were for below $5. This will certainly send the price up, and so will open interest as AMC is the most traded stock by volume and is seeing unprecedented retail attention.
Now about those short squeezes... there are more coming! Next week short calls expire all throughout the week, leading to more hedge funds buying, buying, buying while the price gets higher and higher.
A reasonable target? This chart is just an idea of the kind of spikes we could be seeing next week as these shorts get squeezed out. As a reminder this is not trading advice.
The Investors and Exchanges
Why could this go higher than GameStop? Well... most retail investors missed out hard on GameStop. You can see the kind of volume AMC was getting was likely due to new retail money trying to buy in for what they saw as a second chance - but as well all know they weren't able to take part in free market activities due to some convenient "errors" and inconveniences supposedly "to help the little guy". Enter the Streisand effect. Come Monday, retail traders will have switched exchanges and will likely find a way to buy AMC on CashApp or elsewhere. Perhaps Robinhood will even allow purchases of more than their current limit of 1 share, but given that they are now even putting limits on Crypto trades... I highly doubt Robinhood will exist in two weeks time. Needless to say, these exchange limitations are a testament to the complete panic of the hedge funds, who are exchanges largest clients. Could it be a liquidity problem? Sure. Robinhood recently sought out huge funds from banks. When traders start cashing out $1million gains from their GME and AMC trades it could put them out of business. I will not shed a single tear.
The Meme. The Reality.
These short squeezes have been largely driven by memes by /biz/ and r/wallstreetbets but with AMC we can see a company that is relatively well poised to succeed in their industry. No other theatre looks to have the capital going into 2021 to weather the storm from 2020's economic crash. Films have continued to be made, some quite exciting ones (Matrix 4, Batman with Vampire Guy, More Middle-Aged Actors in Tights Fighting CGI Aliens Part 8) and they will drive moviegoers back to their natural habitat as they boast "in theaters only" release dats. AMC has launched a streaming service as well, but who knows how that will pan out. Although these new investors are buying for the meme, many of them are quite aware that AMC could dominate the movie-going market in 2021 and potentially leave competitors in the dust. Many will hold for the hope of this monolithic rise.
Conclusion
I'm not much of a chart poster. I'm just a crypto trader and /biz/ poster. But I haven't seen many charts discussing this on TradingView so I'd like to drop my opinion. AMC could potentially skyrocket into a short squeeze to the likes of, if not higher than (although shorted by only 80%) what we saw with GameStop. I am all in with my crypto profits just to see what happens.
I hope to see $200 per share by Friday.
May you live in interesting times!
The Shorts.
AMC short calls came due last Friday. The chances of those hedge funds buying back their shares at market premiums is extraordinarily high considering nearly half of the calls were for below $5. This will certainly send the price up, and so will open interest as AMC is the most traded stock by volume and is seeing unprecedented retail attention.
Now about those short squeezes... there are more coming! Next week short calls expire all throughout the week, leading to more hedge funds buying, buying, buying while the price gets higher and higher.
A reasonable target? This chart is just an idea of the kind of spikes we could be seeing next week as these shorts get squeezed out. As a reminder this is not trading advice.
The Investors and Exchanges
Why could this go higher than GameStop? Well... most retail investors missed out hard on GameStop. You can see the kind of volume AMC was getting was likely due to new retail money trying to buy in for what they saw as a second chance - but as well all know they weren't able to take part in free market activities due to some convenient "errors" and inconveniences supposedly "to help the little guy". Enter the Streisand effect. Come Monday, retail traders will have switched exchanges and will likely find a way to buy AMC on CashApp or elsewhere. Perhaps Robinhood will even allow purchases of more than their current limit of 1 share, but given that they are now even putting limits on Crypto trades... I highly doubt Robinhood will exist in two weeks time. Needless to say, these exchange limitations are a testament to the complete panic of the hedge funds, who are exchanges largest clients. Could it be a liquidity problem? Sure. Robinhood recently sought out huge funds from banks. When traders start cashing out $1million gains from their GME and AMC trades it could put them out of business. I will not shed a single tear.
The Meme. The Reality.
These short squeezes have been largely driven by memes by /biz/ and r/wallstreetbets but with AMC we can see a company that is relatively well poised to succeed in their industry. No other theatre looks to have the capital going into 2021 to weather the storm from 2020's economic crash. Films have continued to be made, some quite exciting ones (Matrix 4, Batman with Vampire Guy, More Middle-Aged Actors in Tights Fighting CGI Aliens Part 8) and they will drive moviegoers back to their natural habitat as they boast "in theaters only" release dats. AMC has launched a streaming service as well, but who knows how that will pan out. Although these new investors are buying for the meme, many of them are quite aware that AMC could dominate the movie-going market in 2021 and potentially leave competitors in the dust. Many will hold for the hope of this monolithic rise.
Conclusion
I'm not much of a chart poster. I'm just a crypto trader and /biz/ poster. But I haven't seen many charts discussing this on TradingView so I'd like to drop my opinion. AMC could potentially skyrocket into a short squeeze to the likes of, if not higher than (although shorted by only 80%) what we saw with GameStop. I am all in with my crypto profits just to see what happens.
I hope to see $200 per share by Friday.
May you live in interesting times!