It's really way above my head, but some of it makes sense on the surface, I take it on face-value with some grain of salt, Josh seems to be speaking from experience, but of course may be outdated as he's retired I took the trade but I'm already very bullish as mentioned in the previous post because of tailwinds imho The June 2025 calls are "cheaper" on the IV's(?) It's a new year, taxes will be due next year, so I can be aggressive again, these June calls risk capital only $50k, asymmetric risk-reward, looking for at least 600% roi within 3-4 months (hopefully) More aggressive capital outlay, I'm trying out an income-based approach, Purchased $250k of msty, but looking forward to when I can switch to 1000 mstr shares sometime later this year and doing CC's myself and timing the ups and downs of mstr on 300-400 shares, it looks like it might be a fun experience Anyway, in Josh's own words below on his trade idea, southern drawl(?) notwithstanding...
It's not that they are cheap per se, but that there isn't any significant unhedged exposure. And DITM calls don't have any gamma (as delta approaches 100). So the idea that there is a natural bid to the shares due to exercise demand is silly. It's purely beta.
Reddit (GME) The FTDs are supposedly in ETFs that are supposed to own a certain percentage of GME shares. Effectively, the slight of hand is in the creation and redemption of ETF wrappers. An ETF can be sold before it has been created, and this is deemed to be sufficient to meet the delivery of an actual security/share in the stock itself. Hence, the stock (GME) is deemed to have been delivered. However, they then FTD within the ETF. The T+35 relates to the FTD within the ETF supposedly holding GME shares. Those shares do have to be bought, but you won't find a direct reference to them. What is being said is that you're looking in the wrong place if you want to find the FTDs that'll impact the GME shares price. I fell into this rabbit hole with GME....basically you have to look for large areas of ftds and then see if they are being offloaded to an etf via a redemption wrapper. On the MSTX chart that they are receiving a large amount of ftd's so these could be the ftd's from MSTR being offloaded as explained in the reddit post. https://chartexchange.com/symbol/nasdaq-mstx/failure-to-deliver/ https://chartexchange.com/symbol/nasdaq-mstr/failure-to-deliver/ If we start at the large bar on NOV21 and count T+35 days, 35 calendar days later would be December 26, 2024 - Jan 1 2025 View attachment 358148 This correlates with price action on Jan3. View attachment 358147 Can somebody get @johnarb to read this? Unless he is content staying ignorant on the subject...
Wait total return -92k...so you have given back all of your profits from your original purchase of 160k! What's your position? 20 550 strike contracts @ $82? Imo, you have seen the peak pnl ($500k) already...just too much for price to overcome playing catch up against theta decay. I hate to say I told you so, but I did tell you about the potential risk of a correction... Just by eyeballing it, we could see it bounce around and still be mid 400's by expiry.