GME AMC Options Anomalies

Simply, vol trades with price in meme stocks. It's the only way you can print 500+ vols. Index vol trades inverse to price (generally). When the bubble broke the vols imploded with the stock.
 
destriero said:
Simply, vol trades with price in meme stocks. It's the only way you can print 500+ vols. Index vol trades inverse to price (generally). When the bubble broke the vols imploded with the stock.
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Did vol “implode with the stock” basically because the swings last week were more aggressive than this week? It happened when the price started to melt away from highs...Seems to be moving pretty fast back down to where it came from but Seems less violent to me but I’m literally fucking retarded.
 
zghorner said:
Did vol “implode with the stock” basically because the swings last week were more aggressive than this week? It happened when the price started to melt away from highs...Seems to be moving pretty fast back down to where it came from but Seems less violent to me but I’m literally fucking retarded.
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There are some limitations to pricing models. Like greeks in reporting season (pre/post vol-drift) and micro-driven liquidity. The vols cannot be sustained when the price action is one way (down) as the driver of the vol was unlimited upside risk due to short covering. In reality it wasn't that crowded a trade (short GME) but the perception gave it life and the reversion (to the mean) of short-interest followed. You cannot support a 500 vol-line on the downside in a one-way market where the fundamental driver is gone.
 
FWIW, I shorted a 200-wide 10-point condor for >8 in GME. I had to leg each side in the verticals, but filled within minutes. The equity vol equivalent of negative oil futures.
 
tsznecki said:
You know it's been tough being naked long GME and etc options even if you knew the move was going to happen.
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This is especially true due to Robinhood traders. A newbie investor friend of mine bragged that he executed his GME call two weeks ago, well before the actual expiration. I don't know of a good "early assignment" indicator, but my guess is that it would be blaring loudly for GME vs. other stocks.
 
Spaghetti Code said:
This is especially true due to Robinhood traders. A newbie investor friend of mine bragged that he executed his GME call two weeks ago, well before the actual expiration. I don't know of a good "early assignment" indicator, but my guess is that it would be blaring loudly for GME vs. other stocks.
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*exercised/ WTF would you exercise a call in shares with a 500+ vol-figure?
 
Spaghetti Code said:
This is especially true due to Robinhood traders. A newbie investor friend of mine bragged that he executed his GME call two weeks ago, well before the actual expiration. I don't know of a good "early assignment" indicator, but my guess is that it would be blaring loudly for GME vs. other stocks.
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They exercised because they are too stupid to look at the fwd/synthetic. They were pricing their options off the shares.
 
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