Welcome back to the channel everyone today, i want to talk about what i think is going to happen on the 21st of january 2022 and how the mix of holding shares and buying in the money or at the money call options could very much cause. The next run up so stay tuned and let's make some money, and now i want to dive straight in with the key information. So this poster on reddit says i've posted before about how thomas pettifey was clearly talking about exercising call options, and now we find this random video of charles grandante, which was allegedly suppressed, a video in which he spells out plainly that cool options were absolutely screwing. The market makers back in january - he says i see this all happen and just a few days later, we have this after hours, craziness with mainstream media, pushing out nft news as an explanation.

He said this isn't a coincidence. I'm now 100 convinced that the after hours move was meant to be an iv pump with the added benefit of controlling the narrative on the nft marketplace. They needed to price us out of the options and that little mini pump and dump was the quickest and probably cheapest way to do it. On top of that, the added bonus of getting boomers to dismiss nfts as a thing that matters even ignoring the variant swaps.

Due diligence, i want to be very clear and explain to you all the reasons that call options played such a big role in the january sneeze, and why drs or holding shares and call options are a death blow to the shores. He says we need to learn from history, not just gamestop's initial sneeze but from another short squeeze example, the volkswagen short squeeze and also the june run up for amc as well. So i basically want to explain why the buying and exercising of cool options could very much cause the squeeze right now. You can currently get a free share of amc.

On top of the usual five free shares, valued up to seventeen thousand five hundred dollars. When you sign up to moomoo using the link in the description below and make your first deposit memo, are a brilliant commission free broker. They also don't make their money from payment for order flow. Mumu and futu make their money from margin interest and from payment fees, and therefore you don't have to worry about your trades, going through sketchy, dark pools or being given to citadel.

I mean we also have excellent technical indicators and advanced charting tools. They also publish daily short selling volume on top of a number of other important pieces of information right now, if you open the account with moomoo and deposit 100, you get the first two free shares and the free share of amc, and if you can deposit, two Thousand dollars, then you get the final remaining three free shares to make five free shares valid up to three thousand five hundred dollars each. So this guy on reddit says you guys who are anti-options need to get your head out of your ass i'll. Preface the following explanation with the fact that anyone who buys massively out of the money call options like the 145 strikes to expire in a few days.

This friday is probably an idiot, but if you can afford at the money or in the money options that can already be exercised, that is a much better way to play them. He says with that being said: the exercising of call options is the best punishment for market makers, who are writing, call options naked. So let's say hypothetically, you buy a call option that has a strike price of a hundred and fifty dollars or for amc. You buy an option that has a strike price of twenty dollars.

While you hold this call option, the price of gamestop flies to a thousand dollars per share and the price of amc flies to a hundred or two hundred dollars per share. So you exercise this call. You force the call writer or market maker to sell you a hundred shares at a hundred and fifty dollars or a hundred shares at twenty dollars per share for amc, and this is okay, but if they wrote those calls naked, which means they never had. The shares to begin with they have to go out into the market and buy a hundred shares for a thousand dollars each.

In order to sell you each share for only a hundred and fifty dollars a hundred shares times. An eight hundred and fifty dollar loss is an eight hundred and fifty thousand dollar loss for them in the case of amc, if you exercise those options, when amc hits two hundred dollars a share, that means the market maker has to go into the market and buy A hundred shares at two hundred dollars per share and sell them to you for twenty dollars per share, meaning they lose a hundred and eighty dollars per share, and obviously a hundred and eighty dollars lost per share for 100 shares is a 180 000 loss for them And this means that it screws these naked call writers up so much not only do they have to go into the market and buy shares which are going to be incredibly difficult for them to buy, but they also lose out massively for writing these options naked and This is true punishment in this war. He says: that's why options are powerful, it gives retail the leverage they need and it punishes illegal market maker tactics or just market makers that are selling options naked. Now you might say: well tom, i don't have the cash in my account to exercise those call options.

What can i do? Well, i was actually reading up on what's called a cell to cover transaction, so you can exercise your stock options to buy shares of your company stock. Then you sell just enough of the company shares at the same time to cover the cost of the stock option. The taxes, the brokerage commission and also the fees so say if you had a stock option, obviously for a hundred shares at twenty dollars per share, and you had a massive unrealized gain. Instead of just selling that option, you can sell to cover that option.

What that does, is it exercises the option and gives you 100 shares? Now you may not have the cash for those 100 shares, so the broker can sell 50 or 40 or 30 or 60 or 70 of those shares, which would give you the cash to exercise. The option and cover all the fees and therefore you would exercise that option. Yes, you would only get 30 of those shares back, but you effectively don't have to put any cash in because you're using those unrealized gains. Now again, the important thing here is that, because you've exercised that option, the market maker still has to go into the market and buy 100 shares, and then they can just keep 70 or 60 or 50 40 30 of those shares and obviously give the rest to You because you've exercised that call option and just use the unrealized gains to exercise the option.

It says the proceeds you receive from an exercise and sale to cover transaction will be shares of stock. You may receive a residual amount in cash as well. The advantages of this approach are benefits of stock ownership in your company potential appreciation of the price of your company's common stock and the ability to cover the stock option, cost taxes and brokerage commissions and any fees with proceeds from the sale now. So why is this important if the callers exercise they are contractually obliged to deliver the shares if they aren't fully hedged or if they've sold those options naked? That means they have to raise the ask to a high enough price to where people start selling shares.

Now, on top of this, obviously, if these shares are locked up in computer share, it means that the market makers are going to have to continue to buy the stock at any price in order to fulfill those exercise options. There are shares the market makers just have to pay a high enough price to actually get them. They sold the calls, they know the rules and they knew the risk they were taking and therefore they have to buy the shares. If you've exercised your option now, you don't necessarily have to actually exercise the option.

It is a brilliant way to compound the loss, but obviously by buying the option, especially if they're in the money or at the money, it will usually cause the market maker to hedge for those options and buy the shares in advance. But obviously, if they haven't actually bought the shares, then by exercising those options, you can force them to buy the shares. If they've sold the call naked - and he says when this happens - the premiums on options will literally go through the roof. Market makers won't be willing to sell options when they literally can't buy the shares to meet the obligation.

There will almost certainly be no new open interest created, and the holders of the call options will only be willing to sell at a massive premium over the current stock price because they know if they were to exercise the call. It will drastically raise the stock price. Since the market maker has to get the price high enough for people to be willing to sell their drs shares or the market make will have to raise their bid for the option to sky high prices, so they can buy it to close. So the call holders are incentivized to sell the option versus exercising it and they will obviously have to do this.

Otherwise, they'll be at risk of the price of amc and gamestop going so high that it effectively liquidates their account and they're forced to close out of their short position. He says, drs or holding shares and exercising options is the death blow they work synergistically together. I believe both on their own has potential to force the mother of all short squeezes. But in my opinion, if they're used together, it'll be the difference from the moa speaking at 1 to 10 million dollars per share or 50 to 100 million dollars per share for gamestop.

He says, in my opinion, drs and the resulting failed delivers will likely be the spark that forces the price into the thousands to the point where every call contract is in the money, then, once those calls start getting exercised, they have to keep buying shares to meet The obligation which will force the price higher and higher the higher the price, the more likely a call, will be exercised versus sold. He says just think about how high the price will be if they have to buy back. The entire float just to deliver shares for exercise calls before they can even start closing out their shorts. The price might already be at a million dollars before they even start.

Closing their shorts now, on top of this, the rules that actually govern call options are different from the rules that govern regular shares when it comes to settlement with regular shares. They get that typical t, plus two days before they fail to deliver, but the market makers get that t t-35 exemption before getting in trouble or before being forced to buy in. On top of that, it's also very easy to reset the failed delivers in terms of shares with those divorced pers, but with call options when you exercise the seller must deliver the security by t plus two. He says i'm not 100 sure on this area.

So i'd love some help, but he thinks he's read somewhere that market makers also get an exemption. But that's only t plus 6 and not t plus 35, and also options are much much harder, if not impossible, to reset via the use of divorced puts. And this is why thomas pettafi, the chairman of interactive brokers and charles gradanti, were both focusing on call options and not necessarily just holding shares on top of this kringle kitten was talking about the difference between amc closing at 22, 99 and 2311, and somebody replied saying I think the anger comes from the difference between out the money and in the money for the options and kringle kitten said if people want to squeeze this stock. They've just got to force dealers to purchase stock through massive hedging through in the money and at the money options, so kringle kitten is also on board with exactly what thomas petafey and charles gradanti have been saying this entire time now.

I also want to talk about the wider market and, what's currently going on in china, root has tweeted saying from breaking views. Chinese local government investment vehicles owe 8 trillion dollars and are big dollar bond issuers under stress beijing may let some local governments default. Others might try to dump assets in a weak market. It could get ugly this article's titled.

China's next debt crisis will be municipal. It says, as developers default on bonds and trade credit and leave projects half finished only to be demolished later. China's infamous army of local government finance vehicles could start going belly up. An april document from the state cabinet suggested the dysfunctional governments should be allowed to go bankrupt.

Their outstanding debt amounted to eight trillion dollars at the end of 2020.. Local government finance vehicles are a policy oddity. They were invented more or less. During the global financial crisis of 2008 to let officials get around a central ban on direct borrowing from local governments.

Many of them hold assets of dubious quality roads to nowhere empty airports. Reforms the provincial bond market in 2015 were supposed to make them unnecessary, but they're still around. So it seems that it's not only property developers in china that are in trouble, but even local governments which have issued massive amounts of dollar bonds to overseas investors in the us uk and in europe. And on top of that, another property developer.

Chamel group, which had their bonds rated investment grade or aaa until it suddenly started to default in january this month. So it's also not only sketchy highly leveraged property developers that are going bankrupt, but even investment grade aaa rated developers again. I think this just really puts into perspective that evergrande is only a small 300 billion dollar drop in the 8 trillion dollar debt ocean and finally, the global box office is predicted to do around 6.8 billion dollars in 2022, which is going to be a massive increase On the 4.4 billion performed in 2021., the box office doubled from 2 billion in 2020 to 4.4 billion in 2021 and is expected to add another 2.4 billion up to 6.8 billion for 2022.. Now i think in 2022, the number of movie releases and the average income per film or per box office debut is gon na increase, and i think we could see upwards of seven to eight billion dollars this year in 2022..

Now i think, that's absolutely incredible. For amc - and it's not only going to set amc on the path to recovery, but also the path to growing and expanding their business, guys be sure to. Let me know down in the comments below what you think is going to happen this month. On the 21st of january 2022, and as always guys, if you enjoyed this video, be sure to check out some of my others.

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