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.
By the way, $200 is just too optimistic. AMC's current price is already almost 5 times higher than its actual value. I think the maximum would be $50
mangelott
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Good description! Like it! Lets go!
MarkIT_mal
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i like this idea , 200 sounds niceeeeeeeeeeeeeeeee
FORMER_WAGIE
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With less than 24 hours before markets open I just want to caution you guys that this could go either way! I am optimistic. A billionaire investor from India who helped pump GME is now onboard with AMC, signalling GME gains to move into AMC. The more float we can cover the more likely we'll have a short squeeze.
AkitoCC
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I really like your post, i hope we can all profit.
Btw where do you watch the short calls? I would like to know what contracts are made for short/long calls/puts through unusual volume.
JZBrown96
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The Streisand effect has been something I've been talking about since they tried banning WSB from reddit and Facebook and the likes... you tell people they can't have something and they're going to want it 10x more. And bring a LOT of attention to it that it wouldn't have otherwise gotten.
I don't know when this craziness will end, I don't think quite yet, maybe anywhere from a week to a month.
Until it stops working, lets ride this wave and hopefully make some life changing money!
heidi326
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Ok crazy question.... If and when the GME, AMC etc go to the MOON, will there be a buyer? HOW are we to sell at those prices?
FORMER_WAGIE
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@heidi326, theoretically, and i may be wrong, but if there is not enough float to cover the shorts (which is the case with GME and potentially AMC) the price ceiling becomes virtually infinite until enough people sell shares back into the market. the short holders would either pay interest until the inevitable profit-taking occurs among retail investors (which would be an enormous amount of interest) or accept their bids and buy their stocks at the unreasonable asks going around.
correct me if i'm wrong.
heidi326
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@FORMER_WAGIE, Thank you, I mostly understand. lol I simply just want to be sure their is a way to sell a stock that's potentially 1000% higher than it's value. i.e. hypothetically if a $5 stock turns to $5000 (dream big right?), there's no point if you can't sell it.
FORMER_WAGIE
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@heidi326, there should be nothing holding you back from selling unless your exchange engages in some massively illegal activity. Unfortunately that is a worry these days. The biggest worry is... will your exchange have the liquidity to let you transfer your money to your bank account? Today I'm seeing some issues with Robinhood users not being able to move cash to their banks above $50.
By the way, $200 is just too optimistic. AMC's current price is already almost 5 times higher than its actual value. I think the maximum would be $50