GameStop Short Squeeze by the Reddit Wall Street Bets Traders Explained
Release Date: 01/31/2021
Oil the Dollar and Rates | Normal Midterm Year Market | Micron Earnings Implied Volatility | There Is Always Something to Worry About
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Derek Moore is joined by Mike Snyder and Shane Skinner to discuss how a strong dollar, high oil prices, and the normal midterm year market cycle are dominating the talk around the stock market. If there was no Iran conflict, would the market be in the same spot? Later, looking at the options markets on Micron before next week’s earnings. Finally, why the Strait of Hormuz is causing supply issues. Straight of Hormuz oil tanker conundrum Oil and the US Dollar jump and why it may not be good news for earnings Implied Volatility on Micron Pricing the long and short straddles on Micron...
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OpenAI the Next Netscape? | VVIX Surge | Is This the End of the Selloff? | Oil Goes Parabolic This Week
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Derek Moore is joined by Mike Snyder and Shane Skinner to riff on volatility surging including VIX and VVIX. What volatility changes mean to market makers having to sell or buy more shares to hedge. Later, examine the largest 1 week surge in oil historically and where last week ranks. Plus, asking if OpenAI will wind up being the winner or more like Netscape. All this and more this week. OpenAI vs other AI companies as the eventual winner Explaining what VVIX is in relation to the VIX Why changes in volatility cause market makers to have to sell or buy shares of underlying Energy sector...
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PE Contraction | Salesforce vs Exxon | Nvidia is Cheap? | Volatility Skew | PPI Beats
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Derek Moore is joined by Shane Skinner to explain how the market just got cheaper on a forward valuation standpoint. Plus, how Nvidia EPS estimates reached a new all-time high while the stock trends sideways. Later, comparing Salesforce and Exxon, where they look at a multiple expansion vs a multiple contraction. Finally, they delve into an increase in the near-term volatility skew, and the hot PPI numbers. What is volatility skew Salesforce vs Exxon Nvidia goes sideways even though earnings and sales estimates reach new highs What does it me when stocks forward multiples contract...
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GDP Breakdown | Tariffs Not Going Away | Nvidia Earnings | Oil Moving Higher | Market Likes Tariff Ruling?
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Derek Moore is joined by Mike Snyder and Shane Skinner to discuss the Supreme Court ruling on tariffs and the market reaction. Plus, looking at what the options market is predicting for Nvidia post earnings moves. Later, WTI oil prices moving higher, did the energy sector bull run predict this? Finally, breaking down the GDP release and whether the baring the government shutdown, GDP would have been higher. All this and more this week. GDP release and breakdown No inflation from tariffs Supreme Court Ruling on Tariffs What other justifications Trump admin can use to still impose tariffs...
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Still No CPI Inflation from Tariffs | Interest Rate Cuts Coming | Surprising Sectors Leading Market | All Eyes on Nvidia Earnings & Implied Volatilty
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Derek Moore is joined by Mike Snyder to talk about the CPI release and how there isn’t any evidence that tariffs are causing any issues with inflation. So, does this mean the Fed has a green light to cut rates? As the market broadens, you might be surprised what sectors are leading and hint, it’s not tech. CPI Inflation report No inflation from tariffs Fed interest rate cuts Mag 7 passes the baton to energy, materials, and staples Nvidia earnings are coming up so what does the implied volatility say at this point? Mentioned in this Episode Derek Moore’s book Broken...
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Bitcoin & Strategy $MSTR Meltdown | Apple is Up While Microsoft Bear Market | VIX Too High With Market Within ATH
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Derek Moore is joined by Mike Snyder and Shane Skinner this week to chat about the meltdown in bitcoin and Strategy (MicroStrategy $MSTR). Why would investors choose MSTR over just Bitcoin? The enterprise value vs market value of its Bitcoin holdings. Later, The Mag 7 aren’t all acting alike as Apple is surging while Microsoft is in a bear market. Later, is volatility too high given we are so close to the previous all-time high in the S&P 500 Index? Bitcoin vs Strategy Bitcoin melts down Strategy $MSTR enterprise value vs the value of its Bitcoin holdings Apple vs Microsoft Why...
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Parabolic Silver and Gold | Mini Multiple Contraction | Nvidia vs Walmart | Earnings Estimates Growing
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Derek Moore is joined by Shane Skinner this week to discuss the parabolic moves in silver and gold including the record amount of trading. Plus, was PPI a big deal or no problem? Later, looking at the forward valuations of Walmart vs Nvidia in a hypothetical game of which one would you rather hold? You could also flip a coin which would be as good as any analysis. Meanwhile, earnings estimates have ticked higher while the S&P 500 Index moved lower, illustrating a multiple contraction in the forward PE ratio. Silver and Gold go parabolic Record trading volumes in silver and gold...
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Previewing Apple Meta Microsoft Google Earnings & Implied Volatility | Metals Rocking | Record Option Volumes | Greenland Volatility Pop | Bonds vs Gold
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Derek Moore is joined by Shane Skinner and Mike Snyder to talk about how it seems every metal is surging including Gold, Silver, Platinum, Palladium, and what else? Plus, Shane reports on the options conference and record option volumes. Oh, and did the market and volatility overreact to Greenland? It lasted all of one day. Oh, we have a big earnings week coming so what is the options market predicting for earnings moves? Big earnings week Implied volatility of most of the Mag 7 pre-earnings Record options contract volumes Greenland market event that lasted all of one day Volatility...
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Commodity Boom? | Energy Stocks Running | Tariffs Don’t Matter? | Market Broadening| Earnings Season is Here
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Derek Moore is joined by Shane Skinner and Mike Snyder to talk about whether the tariffs matter to the market anymore. Plus, energy stocks break out even though oil is still below $60. Later, how we continue to see broadening in participation of the bull market beyond the mag 7 stocks. Of course, earnings season is starting and in the end earnings matter above all else. Earnings matter in the long run XOM Exxon some back Energy stocks no longer hibernating How stocks can do well even if the underlying commodity isn’t Commodity next boom? Does the Fed theoretically use taxpayer funds...
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High Valuation Ok? | Midterm Year Performance | Supreme Court Tariff Ruling | Google’s Number 2 | Payrolls
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Derek Moore is joined by Shane Skinner and Mike Snyder to talk about whether higher valuations are warranted based on rising profit margins. Then, they think about whether the upcoming Supreme Court ruling on tariffs matters for the market. Later, they discussed Google passing Apple for the #2 highest valued company in the S&P 500 Index, midterm election years performance vs other years, regression channels in the S&P 500 Index, payroll numbers, interest rates, and even copper prices. Midterm year performance vs other presidential cycle years Supreme Court Ruling on Tariffs and...
info_outlineThe Wall Street Bets community executed a short squeeze through Reddit on stocks like GameStop and AMC Theatres this week. But what is a short squeeze? How did they and others buying stocks and options cause the stock to go up at least in the short term? Is short selling bad? Why potentially some brokers had to halt trading in certain names? A look back to the late nineties when internet chat rooms were pushing stocks. Examples of the little investor turning thousands into millions, and vice versa. How short sellers can root out fraud in companies with examples. Jay Pestrichelli and Derek Moore get into this and more in this very timely and fascinating episode.
What is a short squeeze?
What is the GameStop short squeeze?
How did Reddit group Wall Street Bets execute a short squeeze?
How some people have made a lot of money
How other people may lose a lot of money?
What is short interest ratio?
What is short interest as percent of float?
What is a delta or gamma squeeze in options on stocks?
Large in the money option open interest in GameStop at expiration
How short selling adds liquidity.
What are short days to cover metric?
Short sellers uncovering fraud in Amazon Prime documentary the China Hustle.
Short sellers with Enron, Nikola, Wirecard
Trading halts and liquidity requirements on brokerages
Congressional hearings coming on Robin Hood and Wall Street Bets GameStop activity
Examples of pump and dump in 2000 by Michael Lewis in New York Times
Short selling was found useful even in 1918.
How short selling in itself does not bankrupt companies.
How short selling that drives price lower can impact ability for secondary equity offering.
Mentioned in this Episode:
Explaining Delta and Gamma Options Squeeze Robinhood vs Softbank Whale https://brokenpiechart.libsyn.com/robinhood-option-traders-vs-the-softbank-whale
Derek Moore’s Book Broken Pie Chart https://amzn.to/2YoxRaF
Documentary “The China Hustle” on Amazon Prime Video https://amzn.to/39uBJgm
Michael Lewis article on 16-year-old penny stock trader 2001 https://www.nytimes.com/2001/02/25/magazine/jonathan-lebed-s-extracurricular-activities.html
ZEGA Financial www.zegafinancial.com
Jay Pestrichelli’s Buy and Hedge Book on Amazon https://amzn.to/2YoJDSg