Brief Question

DallasCowboysFan · Oct 12, 2020

Actually two........

I read Zerohedge today and they said that the stock market rallied because :

institutional investors remained skeptical with a near-record number of non-commercial spec shorts in the Nasdaq 100 mini according to the latest CFTC Commitment of Traders report, and after spiking to a historic level just two weeks earlier, the negative bets on the Nasdaq stubbornly persisted..

we see massive upside call strikes suddenly back ‘in-play” on the meltup this week into their Friday’s expiration in some of those mega-cap Tech stocks (AMZN in particularly, but ADBE and NFLX as well) that traded back in August, forcing what looks to be “short Gamma” -type buying / hedging this morning from the Dealer short them in order to stay neutral."

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Is the reason that the markets rose is because the bears that had bought put options have to buy call options now, driving up the price of the stocks, to offset losses in their put positions?

What did they mean by a double squeeze? Was it the continuing losses on their put positions compounded by rising tech prices and call options?

https://www.zerohedge.com/markets/n...mid-unprecedented-gammafutures-double-squeeze

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A few weeks ago I put in a low bid for a stock. Let's say the stock was trading for $20
and I put in bid for $19, just in case it moved lower for an unknown reason.

My broker, TDA, and Marketwatch continued to say the last bid was $19.95.

If someone submits a bid, regardless of the price, why isn't it reflected in the data?
Or, does it only publish prices that fall within a certain window?

Thanks

newwurldmn · Oct 12, 2020

DallasCowboysFan said:
Actually two........

I read Zerohedge today and they said that the stock market rallied because :

institutional investors remained skeptical with a near-record number of non-commercial spec shorts in the Nasdaq 100 mini according to the latest CFTC Commitment of Traders report, and after spiking to a historic level just two weeks earlier, the negative bets on the Nasdaq stubbornly persisted..

we see massive upside call strikes suddenly back ‘in-play” on the meltup this week into their Friday’s expiration in some of those mega-cap Tech stocks (AMZN in particularly, but ADBE and NFLX as well) that traded back in August, forcing what looks to be “short Gamma” -type buying / hedging this morning from the Dealer short them in order to stay neutral."

---

Is the reason that the markets rose is because the bears that had bought put options have to buy call options now, driving up the price of the stocks, to offset losses in their put positions?

What did they mean by a double squeeze? Was it the continuing losses on their put positions compounded by rising tech prices and call options?

https://www.zerohedge.com/markets/n...mid-unprecedented-gammafutures-double-squeeze

---

A few weeks ago I put in a low bid for a stock. Let's say the stock was trading for $20
and I put in bid for $19, just in case it moved lower for an unknown reason.

My broker, TDA, and Marketwatch continued to say the last bid was $19.95.

If someone submits a bid, regardless of the price, why isn't it reflected in the data?
Or, does it only publish prices that fall within a certain window?

Thanks

This question should be in trading as its a legitimate question.

I don't believe the option gamma story is the driver of the markets. Perhaps its front running stimulus money that will just go into Robinhood accounts. Or perhaps its the fact that the market is pricing in more certainty that Trump will lose - and lose decisively (that there won't be a contested election).

Overnight · Oct 12, 2020

Kinda' curious how this massive rise happened on a day when the US banks were closed? Relatively light volume?

(Remember, today was a US holiday.)

Arnie · Oct 12, 2020

newwurldmn said:
This question should be in trading as its a legitimate question.

I don't believe the option gamma story is the driver of the markets. Perhaps its front running stimulus money that will just go into Robinhood accounts. Or perhaps its the fact that the market is pricing in more certainty that Trump will lose - and lose decisively (that there won't be a contested election).

This.
There betting on a Blue wave= Mo' money, mo' money and mo' money
In todays vernacular, "stimulus"
Forget the original $3.4 billion. They will go bigly.

newwurldmn · Oct 12, 2020

Arnie said:
This.
There betting on a Blue wave= Mo' money, mo' money and mo' money
In todays vernacular, "stimulus"
Forget the original $3.4 billion. They will go bigly.

Well to make it political, both parties want stimulus and I’m sure anyone who needs it won’t get it. It will go to people who will use it to buy more aapl stock.
Just like the first round.

DallasCowboysFan · Oct 12, 2020

newwurldmn said:
This question should be in trading as its a legitimate question.

I don't believe the option gamma story is the driver of the markets. Perhaps its front running stimulus money that will just go into Robinhood accounts. Or perhaps its the fact that the market is pricing in more certainty that Trump will lose - and lose decisively (that there won't be a contested election).

So, what happens if Trump wins because the polls, and the MSM are corrupt, and they are reporting false information to sway voters and public opinion?

DallasCowboysFan · Oct 12, 2020

Overnight said:
Kinda' curious how this massive rise happened on a day when the US banks were closed? Relatively light volume?

(Remember, today was a US holiday.)

Normally, you might be able to attribute the rise in the DOW and the SP 500 to buys in the major stocks like Apple, MSFT etc.

But, the heat index looked good across the board.

DallasCowboysFan · Oct 12, 2020

newwurldmn said:
Well to make it political, both parties want stimulus and I’m sure anyone who needs it won’t get it. It will go to people who will use it to buy more aapl stock.
Just like the first round.

The election is 4 weeks away.
We'll get a stimulus plan.
But like you said, it will go to friends and special interests.
Not the working man on the street.

Overnight · Oct 12, 2020

DallasCowboysFan said:
...
We'll get a stimulus plan...

No way. Nancy, Mnuchin, Mconnel and Trump are like the four horsemen of the stupidopalypse.

Playing their stupid games. But the BS is now falling hard on Pelosi, who is so full fail for the people, constantly inserting her pork knowing the reps will not pass it...She WANTS this thing dragged out until after the election, and is dragging down USA citizens with it.

newwurldmn · Oct 12, 2020

DallasCowboysFan said:
So, what happens if Trump wins because the polls, and the MSM are corrupt, and they are reporting false information to sway voters and public opinion?

There will be volatility but less than if the election is disputable.

It's my belief that the market is negative on Trump's handling of COVID.