1/ Why so much outrage on the "buying ban"?

no it's not about "the little people".

The real reason that very few folks talk about is all about the hedgies and whales looking for suckers.
2/ In every transaction, there is a seller and a buyer. so a squeeze is always associated with forced buying. for $GME, that was short-sellers (some hedgies) suffering margin calls from their short positions, and option dealers covering the exploding delta of their short calls.
3/ So to profit from a short squeeze, one builds up position before the squeeze and trim position as price skyrockets to sell to poor forced buyers. OTM calls are great, because their delta explodes as well in a squeeze.
4/ But in an entirely engineered squeeze having no fundamental basis (news etc), once the pool of forced buyer is exhausted (as the short-sellers and option dealers went bust), the price tends to collapse.

A good example is AAL on Thursday morning.
5/ so what do whales do if they still have large positions need to be closed?

They need new s̵u̵c̵k̵e̵r̵s̵ buyers to bag-hold the underlying which is worth much less than the current price.
6/ That's why you see the sudden outrage from billionaires on not being able to recruit new suckers.

Has little people's ability to speculate be really limited?
Were they forbidden to buy GME when it was $20?
Were they forbidden to sell GME when it was $350?
7/7 So stop wasting your energy on GME and look elsewhere

opportunities for 10-baggers or even 100-baggers abound in many other names.

chances of GME goes to $5000 is <1% unless someone can find more forced buying (I can't see how)
p.s. I might post some flow analysis of recent squeezes to show what's really going on, if there is enough interest.

End of my rant. 🤣🤣🤣

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More from @Barton_options

1 Feb
1/13 My most optimistic take so far:

COVID is just common cold, but sadly we are ALL pre-Columbian native Americans.

disclaimer: everything below is entirely theoretical (i.e. speculative). no medical advice.
2/13, "It's just another cold"

Given what I know now, SARS-COV2 appears to be NOT much worse than common cold coronavirus, e.g. HCoV-NL63.

For young kids, SARS-CoV2 is not that worse than HCoV-NL63: most of them are asymptomatic, except for a few mildly symptomatic ones
3/ Esp. for infants, their immune systems have never encountered any coronaviruses. And SARS-CoV2 are handled just like the other common-cold coronavirus, without much fuss.

But this training of immune system does protect them from severe disease when they becomes adult.
Read 13 tweets
30 Jan
1/ Short interest # is not what you think when there is a massive option interest for ITM calls
2/ How do you exit your deep ITM GME calls, when bid-ask spread is crazy and GME is highly volatile itself (call prices not catching up as quickly as it should)?

You short sell GME to flatten your delta to 0. much better liquidity.

Also you can keep scalping gamma.
3/ retail folks may or may not do this, but whales are sophisticated.

they could also sell an OTM put and short-sell more GME to get out completely.
Read 8 tweets
30 Jan
Peak SPAC is here.

Got a phone call from a friend in Shanghai last night, urgently needing advice from me on how to get acquired by a US SPAC for his struggling startups.
Why is a sudden surge in interest in SPACs?

Many Chinese VC put in a repurchase agreement in the term-sheet, that founders have to repay 100% at the end of the term. (more like a convertible bond to me)

And PBoC has made liquidity quite tight in the past 6 months.
Now, entering US SPACs seeking startups in fashionable areas (battery etc) regardless of their business viability, to squeeze a quick buck out of speculators...

A perfect "marriage" is emerging.... via shell companies in Hongkong.
Read 4 tweets
5 Jan
My sources say that PCR-confirmed positive covid cases in the city of shijiazhuang has surged from 1 case to 40 cases to 180 cases over the past 3 days.

The city is under a soft lockdown, until 11million PCR tests (the entire city) are completed for the next 3 days.
Expect to see reports from official channels in 2-3 days.

It appears that every Chinese province has a covid PCR testing capacity of 4 million tests per day (6-8hr turnaround time)

US has a capacity 2.2 million tests per day (24-48 hr turnaround) for the entire country.
Chinese New Year travel is probably going to be canceled for the 2nd year in China.
Read 4 tweets
3 Jan
China ramped up its COVID19 restriction today

Private gathering limited to 10 people and fewer.
Intracity travel now discouraged

Quarantine for international arrivals has been increased to 14 days (in dedicated hotels) + 14 days (at home)
The restrictions are likely to last until early March.

They have started mass inoculation, but interestingly they prioritize high-risk working population for now. No news yet on when 65+yo would start to receive their vaccine.
Vaccine hesitance is pretty high at the moment in China, because of a couple of high-profile counterfeit vaccine scandals in the past two years (nothing to do with the covid vaccine makers though)
Read 4 tweets
2 Jan
1/7 Probably an unpopular take:

The current fight between Jack Ma and Chinese regulators is somewhat similar to a Dick-Fuld-vs-Tim-Geithner fight in 2008.

no endearing character on either side.
2/7 Ant Financial (Alipay) fueled a $2Tn CNY sub-prime credit bubble in China in the past 3 years.

much of the $2Tn was used for weddings, cars, cell phones, video games, very few of which is productive assets.
3/7 Exhibit A of Chinese consumer credit boom

live-streaming influencers who are raking in millions a day.

The top influencer of 2020, 薇娅, had a one-day sales of 1.1Bn RMB on Nov 11. Yes, that's a billion, not a typo.
Read 7 tweets

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