The Hour of Reckoning Will Come, Keep HODLING

For all the smooth brains delta hedging is the percentage of shares that Market makers buy for each option sold. For example if MMs sell a call and Delta is .25, they hedge by buying 25 shares to cover the 100 share contract.

Implied Volatility is the expected volatility over the life of the option. The higher the IV is, the lower the gamma, which means for each dollar the price increases, at a high volatility, the lower the rate of change for delta. Gamma is the rate of change of delta and delta is the percentage the option price increases for each dollar the stock increases. The closer the option you bought is to being ITM, the higher the delta, and the higher the gamma.

For example, if I buy a call for a premium of $1.00 with a delta of .5 and a gamma of .1, and after purchase the stock increases $1 this is what happens:

My option value will increase to 1.50, and then my delta will increase to .60 (.5 + .1 = .6 which is my gamma added to my delta). As the the stock rises my gamma will increase as well, so let’s say my gamma increases to .20.

The next $1 stock increase will mean my call is now worth 2.10 and my delta is now .8 (.60 + .20).

What does this mean for GameStop?

Right now IV is too high for a high probability of any type of gamma squeeze. The higher the IV the more gamma decreases, meaning for each dollar the stock goes up, the lower the amount is added to delta. A gamma squeeze occurs when the stock is at a low IV in comparison to historical levels. The lower the IV, the greater the rate of change for delta, and the more market makers will have to buy of the underlying stock on a price increase. This means that in lower IV conditions, MMs would have to hedge with many many more shares than they would have to hedge with in high IV conditions, squeezing the stock up more and more exponentially.

When MMs sell contracts, they hedge their positions by delta hedging. This means that in order to take a neutral positions they have to remain delta neutral, right now, they have to own and buy a much lower number of shares to hedge due to high IV.

So say there is a volatile price action that leads to a lot of calls being in the money, a gamma squeeze would be way more likely if MMS had only hedged a small % of their sold contacts, because then that would mean they would have to buy back a larger number of shares for their now itm contract they sold.

Calls sold this morning were banking on either them expiring out of the money or an IV decrease. An IV decrease would mean they could buy their call back at a lower price to close the position, pocketing the difference, or keep the entire premium of the option expired out of the money. Higher IV= generally higher premiums and lower IV= generally lower premiums.

A gamma squeeze is not likely until IV drops a lot more, this is a long game. The good thing is, a lower IV will drastically reduce options premiums meaning you apes can go dump more money into far OTM weeklies. A gamma squeeze could potentially trigger the MOASS. Diamond hands will win.

The stock will more than likely trade, sideways for a while or drastically dip and rise again before any type of squeeze due to indirect GME shorting through ETFs. Shorts want either a reverse gamma squeeze or a massive sell off.

The float percentage is wayyy higher than you think, taking out ETF short positions is just kicking the can down the road for hedge funds and delaying the inevitable banana rocket to Mars 🦍 🍌 🚀. Shorting the ETFs is a way to take out huge short positions without publicly disclosing the actual insane percentage of float shorted. u/NorthBalance goes into detail about this here

https://www.reddit.com/r/GME/comments/md69vo/dd_why_gme_went_up_today_and_how_citadel_may/?utm_source=share&utm_medium=ios_app&utm_name=iossmf

There is manipulation going on and the giant billion dollar market buy orders are evidence of this. By putting in these massive buy orders they are tricking the algorithm into lowering share borrow rates, so they can more cheaply flood the market with shares. This is to give the illusion that short percentage is lower than it is without actually intending on having these market orders executed.

There are already some closed door SEC meetings with whistleblowers, and there are new rules going into affect from JPow’s positiveish market outlook which will cut them off from the unlimited covid funding they've used to keep this whole scam going. Blackpool and OTC latter trading is not a myth. They are attacking the stock from multiple avenues but it is only a matter of time until the hour of reckoning, and it will be fast, and it will be swift, and the tendies will be delivered.

The dip on Wednesday was due to a short attack after shorting more ETFs with GME, the high on Thursday was due to the new T+6 SEC rule on delivering shares for purchased ETF shares. Thursday coincided with the T+6 date for when hedges opened more short etf positions last week. They are shorting the entire Russell 2000. There may be another volatile price movement mid next week when they have to abide by the T+6 rule for the ETFs shorted Wednesday.

TLDR

There will be dips, there will be half moons, don’t sell, HODL, and buy the dip. This is an instance of who has the most willpower not the deepest pockets, because each day the shorts do not cover, they BLEED. It’s a matter of time, but the time will come.