Thread by @live2beingu

#AMC #GME #KOSS #TSLA #Holders #Stonks #Stocks It is a little bit past midnight in California but I want to make sure this first piece got out with no adds so bear with me as this is a long tweet lol. What’s good folks??? I hope and trust you’ve had an amazing day. I want to

welcome each of you to “The Recap 101.” Tonight we are going to go through all of the details that you need to know in regards to NEGATIVE BETA STOCKS. What they are, how to find them, what they do for your portfolio, the risk reward, and how it correlates to the market today.

Let’s start from the beginning...lets discuss what volatility actually is. Volatility is the degree to which a stock price can change. You often hear me talk about on here about what implied volatility is well beta is another measurement of volatility but it further explores the

change in price as compared to the overall market. For us it’s the S&P 500 Index as we look to compare that to these stocks #AMC #GME #TSLA #KOSS #NAKD #CTRM #NIO #NKD #GTII #OCGN and many more. Basic Premise is the market always has a Beta of 1.0 and everything else builds on

that concept. So for example if a stock has a beta of 3.0 that means the stock grew overall by 30% more than the S&P 500 that grew only about 10% during the same period of time. To calculate use the following equation:
Beta = Covariance/Variance

Covariance in this case is the stocks return relative to the market and the Variance is the measure of how the market moves to its mean value of 1.0.
What does covariance do for us? It refers how the stocks move together do they go up and down at the same time or is it an inverse

reaction where the stocks will move in the opposite direction. Variance measures how far the market moves away from the mean of 1. How would I be able to use this. Well beta helps to measure either the rise and fall of the stock within the options market.

So a beta that is greater than 1 is more volatile than the market. A beta that is lower than 1 but greater than zero is to be considered less risky move with in the market. Okay so I understand what beta can do is there anything else I should know? Well yeah...using beta is a

great way to measure short term risk but it is not a complete or a comprehensive measure of risk. It’s sole movement is to measure the movement between the underlying stock and the market median i.e. S&P500.Okay so I get that beta means that but what is Negative Beta and why are

folks talking about it so much. Well a stock that has a negative beta within the market moves in the opposite direction of the market median. So take GME for example the last I checked when writing this article GME had a negative beta of 23% so this means for every 1 price of the

market changes GME is going to move overall by 23% of a change in the opposite direction. (Granted this number could’ve changed since it was written so don’t behold me to it). Okay but how does this work and why should I have one? Well Negative Beta stocks are good to have when

he market is doing pretty poorly. So think about it this way...Look at what happened to the overall market today. GME is stayed mostly Green throughout the day finishing about 14 dollars above where we closed on Monday. Now when we look at the market overall we’ll see that our

median which was the S&P 500 continued to drop for most of the day. The S&P 500 symbol is INX if you want to look and compare it to $GME $AMC $TSLA $KOSS or any other stock #Holders. The overall percent of change on the S&P 500 was -12.88% but what we saw was a move in the

opposite direction for $GME while we finished at 14 dollars above the close we saw highs of about 204 with this particular stock. So this correlation tends to fluctuate all day depending upon how our overall median market score goes up or down.This is important to not as we get

into a market that may not perform the way we want it to. what are the 7 Key takeaways:
1. Beta is another way for valuing risk in the options market.
2. Beta helps us understand how the underlying stock moves in tandem with the market
median or the S&P 500.

3. Beta helps us to figure out in the short term how risky a stock price might be and how it
would affect our portfolio.
4. Negative Beta moves in the opposite direction of the market. So If the market dives it
also moves in that direction. Now if the market tends to

stay the same with less movement we’ll also see that same change.
5. Negative beta stocks are risky in that when the overall market is doing well this tend to lose more than the risk free rate.
6. When a negative beta stock is added to a portfolio is usually done to hedge other

risk within the market.
7. You can find it within your trading platform. Keep in mind that each platform may calculate this amount differently so if you want the formula I can add it here but just know that it’s there and I will do my best to post the updated beta information

or these stocks.

here is so much more to discuss about beta but I wanted you all to have this before we move into tomorrow. Part 2 is coming and It will cover something new that occurred today. Part 3 Dark Pools. I will have to wait to post that after a meeting in the am as

as there is no time to do that tonight and it to the post. Share what you know and I hope that helps. Explain what negative beta stocks are, how they move with the market, and why many us hold beta stocks if you have both AMC and GME.Additionally, if you’re wondering why AMC

didn’t move very much in the positive spectrum I offer you this. According to Fidelity AMC has a better of -0.27 so that means for every 1% change in the overall market median AMC will move 0.0027% of it’s price ratio. Some quick and dirty math will show that we only moved about

0.5% from the overall total as the separation from the market took place. Not bad but still has some improvement and ways to go in order for AMC to take advantage of the overall downturn of the market. I honestly hope this will help each of you understand the concept.

If you have any questions. Please post them and I’ll get to them as soon as I can. Take care all and part 2 on the news that occurred today is coming next. #DiamondHands #holders #AMC #GME #TSLA #KOSS #OCGN #GTII #memes