Option_Crusader

The Battle of the Apes doesnt look that good anymore.

Short
NYSE:AMC   AMC Entertainment Holdings, Inc
A lot of People, "traders" dont want to hear it. But the Trumpets are sounding. Is this the retreat of the Ape Army on AMC? Can they mobilize $25,000,000 or come up with 250,000 trades tomorrow? 3 days and your lottery ticket will be OTM.

Tuesday update on the AMC Battle.
What's going on?
I was expecting a much higher trading volume for AMC . But it barely reached 30% of the average. A further indication that the steam is out. Tomorrow is the last day for the Ape Army to advance the price beyond $40.

As outlined yesterday the Sweet Spot of the Market Maker lays under $40 and above $35. This is their spot where they make the most money and have to pay out the least.

The Apes did not board the rocket ship, "to the moon, bro". Not today. The resistance Level at $40 to $41 is backed up by about 54,000 call contracts, or 5,400,000 shares. Remember, the MM are sitting on an endless supply of shares form all the previous expiration dates.

To understand this, consider the Ape Army is not buying longer term options because they dont know about it or they are too expensive for them. Now, every time some "trader" buys a call option the Market Maker buys the 100 underlaying stocks of AMC . He goes long on the stock, he owns the shares!!

Now since apes only think 7 days in advance we all know that your option expires the next Friday.

What is going to happen?
The "trader", or better said gambler, now lost all his or her money. The option expires worthless, OTM, "Out Of the Money". The market maker still has the shares. And he might hold on to them to wait for the next week. Another Monday and Tuesday and the Ape Army is buying Calls WITHIN THE SAME PRICE RANGE we see AMC since ...???? Mid of July. AMC prices went down since beginning of July! The market maker sold their shares and cashed in and hence dropped the price. And now that the price dropped to Mid July, the MM also could buy back their "short" positions. The price went up again, a little.

The AMC is trading in a range now, and the MM are keeping their shares of your weekly expiring call options and dont even have to buy any when some "trader" comes back on Monday and buys more calls at the same price! The MM already owns the shares and doesnt need to buy them. He might sell some to drop the price.

Whaaaat???
Yes, This is one major reason why AMC is not breaking those levels. The Market Makers coordinate their defense and the Ape Army cannot break resistance levels.

Today is Tuesday and the trading volume was low. And if the Apes cannot give it to the "Hedgies" on Wednesday then the game is over for this week. I will watch the volume and it must surpass the average volume by at least 150% to break above $42 and gain just a little profit or to break even for the $40 - $41 Call Options. Will there be a trading volume of 250 million shares tomorrow?? I dont think so. But who am I to tell you were to lose your money.

Today
The Call / Put Ratio for this week as of today is 39%. And all next week is empty and the ratio grows to 63% Put options.

So far there will expire 140,000 Call options in 3 days and 55,000 Put options.

Today "traders" bought "ONLY" about 38,000 call options and 24,000 Put options. A very low volume , I must say.

Open Int. to exp this Friday
  • Calls 138,99
  • Puts 55,449
  • Total 194,440
  • CPR This week 39.9%

Open Int. to exp beyond Friday
  • Calls 24,112
  • Puts 15,230
  • Total 39,342
  • CPR Next Week 63.2%

We can see where they lose the least amount of money. Between $40-38. But even $35 would be ok compared to the past few weeks and how much was at stake. 10 times more.
The distribution of the Supply and Resistance levels. shows only two major zones and they all get wiped out on Friday.

$40-41 Resistance Level with around 53,000 contracts or 5,3 million shares. A third of what it was.

$36-34 Support Level with around 22,000 contracts or 2.2 million shares. Thats it my friends.

Make your bets.

I am short on AMC , I can wait long term

Market Maker Bet, The Sweet Spot

-----------Strike---- Calls ITM in $---- Puts ITM in $---- Total Loss for MM

AMC @----$30----$411,400----$36,605,550----$37,016,950
AMC @----$33----$523,600----$21,501,750----$22,025,350
AMC @----$35----$676,000----$11,950,050---- $12,626,050
AMC @----$38----$3,505,700------$3,929,050---$7,434,750
AMC @----$40-----8,234,700----$1,587,550---$9,822,250
AMC @----$42---- $23,741,400---- $788,950----$24,530,350
AMC @----$44-----$42,324,700-----$458,500----$42,783,200

Comment: The trading volume of the Ape Army leveled at 40% of the average volume today. Far less than I expected. This is their last day today before Judgement Day. As I said they had to come up with 250 million trades but made only 70 million. Thus, I consider this week for AMC done. The Market Maker Sweet Spot moved slightly from $40-38 to $38-35. At $38-35 closing of the week it will have the Market Maker paying out about 5.6 million Dollars. At $33 it would be $11 million so they will stay above that and at $40 it rapidly goes up in costs for them. They will stay below that. Range trading tomorrow as today and Friday will be closing at around 35-36.
IF IF IF the apes will not come up with 200 million Dollars. And who goes long on Calls with 1 day expiration?? Lotto 6/49, just 10 times so expensive.
Next:
There are about 80,000 Calls at play (Open Interests) of which 57,400 will expire this Friday. These carry a value of about 85 million Dollars for the Market Maker.

BTW, AMC MM are mostly from Goldman and Sachs. The Ape Army contributed enormously to their Q2 earning report! Congratulations!

The Put Volume of Open interests is about 52 million contracts of which 36,000 expire this Friday. These carry about 34 million Dollars for the MM.

The upper Resistance Level sits at $50 still with only 9,000 call contracts.
The resistance at $40 consist of about 12,000 contracts only. This was much higher in the past. The steam seems to be out.
The support ZONE starts at $35 with 6,000 contracts (600,000 shares), $34 with 6,000 and $32 with 5,000. This support level is a little stretched out and hence I call it a zone.

Today came 23,000 PUTs and 15,000 CALLs new into the game. This means the wind is turning. The CPR is 155%, for every bought Call option today, there were 1.55 Puts bought. Interesting to note! But also her the Avenger Apes do the mistake to buy lottery tickets, 3 days of expiration or max one week. You cannot win a battle without commitment. We flush them all down the toilet on Friday. The only hedges I see are still placed at the $20 with 6,500 contracts as insurance for an AMC collapse for stock holders, Married Puts.

CPR for this week is at 59.6%. Call to Put Ratio next week so far will be 69.5%, which looks bearish to me. But this can and will change on Tuesday.

If you are an Avenger Ape you should buy PUTs ATM and not 5 or 10 Dollars out. The MM sitting on so many shares now that they dont even have to short AMC when you buy a put! But they have much less short positions at that level than log positions due to the fact that the apes pumped a lot of Call Options into the market with... Lo and behold.... one week expiration. Not so manyputs. Thus, the resistance is lighter to the down side.
They just try to keep the stock in a range. The market maker still makes money on commission and slippage.

Remember, when you buy a call the MM buys the underlaying asset but he already has all the shares from the last three weeks. You just pay him commission to take part in the lottery, but he doesnt spend any money. If the price drops too low he buys back his shorts, if it gets too high he sells AMC.
AMC will stay under $39 and closing at $37 for tomorrow and closing the week at $35- 36 if the Apes dont come up with truck loads of money. That we will see.
The Hedgies are prepared now. They learn quickly. Get your popcorn ready.

BTW, all the data I collect are publicly available. Learn basic Excel and analyze the data. But this requires some effort and success is not guaranteed. 90% of trading is research and data collection und only 10% is clicking buttons. Unfortunately I cannot post images here. And my personal blog is somewhere else.
Comment: Please correct this sentence.
The Put Volume of Open interests is about 52 million contracts of which 36,000 expire this Friday. These carry about 34 million Dollars for the MM.

It must read:
he Put Volume of Open interests is about 52,000 contracts of which 36,000 expire this Friday. These carry about 34 million Dollars for the MM.