Also on my blog with better formatting, cute footnotes and inlined images.
Note that not much here is new material, mostly rehashing existing points.

Disclaimer

This article started out as research for my betting against Bitcoin on the stock market. This isn't financial advice. As a matter of fact, I encourage all readers you to not buy or short crypto, through any market or derivative. Use your money for productive uses.
Here's a TL;DR:

1. The current parabolic price increase in Bitcoin is a bubble that has started popping.
   
2. A stablecoin called Tether is either one of the largest frauds or money laundering operation in history, and is providing most of the liquidity in the cryptocurrency ecosystem.
   
3. A BTC bubble pop, incoming regulation on stablecoins or the current NYAG investigation into tether will expose tether's insolvency to the crypto market. This is bigger than it sounds.
   
4. (Speculative, but one can hope) Current prices to mine BTC could end up higher than BTC market price, exposing BTC to a 51% attack.
   

A Recap: Bitcoin is useless and should go away

Bitcoin serves no purpose. Let's just rehash that by quickly debunking the major claimed uses over time as seen here

• Proof of concept: No argument here, but now that the market cap of cryptocurrencies is closing in on a $700B, this seems moot.
  
• Cheap Payment Network: Nonsense, since BTC transactions are currently >$10 and this worsens the more people use it.
  
• Anonymous Darknet Currency: I'd have said "no argument here", but apparently it's surprisingly easy to trace BTC nowadays. However, crypto ecosystem as a whole seems to do a decent job at laundering money as we'll see later.
  
• Reserve Currency for Crypto: Since a reserve currency should be useful as a means of exchange, and I wrote several thousand words on how BTC is not that, my position is pretty clear. Also, the fact that a cryptocurrency indexed to the US dollar has trounced BTC as the main means of exchange in the crypto ecosystem speaks for itself.
  
• Programmable Shared Database: You know what's programmable, shared and a database? The database we use at work. Just learn to implement access control lists on your SQL server.
  
• Uncorrelated Financial Asset: Given BTC crashed just like the rest of the market when COVID showed up, this doesn't hold up
  

The stupidest version of the "uncorrelated asset" argument I hear is "Bitcoin is a great hedge for inflation!"
You know what's a good "hedge for inflation"? Literally anything. The definition of inflation is "the price of money". If the price of money goes down (inflation) then everything else has a positive return by comparison.
People who say "bitcoin is a good hedge for inflation" shouldn't be trusted to manage their own money, let alone give financial advice to anyone.

• Censorship Resistant e-Gold: This is a roundabout way of saying "BTC is a store of value"! Which, again, can only be said by people who've never read the definition of "store of value" in a textbook.

I already went into detail into this, but BTC is a terrible store of value because it's volatile. Assets that can lose 20% of value overnight don't "store value". BTC is a "vehicle for speculation".
The only way price is sustained for BTC is that you can find some other idiot to sell it to. Just as a reminder, 50% of Gold is used for things that aren't speculation, like Jewelry, so you'll never have to worry finding a seller there.
Here are some real uses for bitcoin:

• Gambling is fun. You buy BTC, the price might go up! Or down! This is exciting.
  
• Hackers, money launderers and other criminals certainly find cryptocurrencies useful.
  

Reminder: BTC is an ecological scourge
The current cost to mine a BTC is around $8000 in electricity. This electricity mostly comes from subsidized coal in China.
And given the current amount of BTC generated each day, we're using about equivalent to the electricity from all of Belgium, largely in coal, to keep this going.
I don't mind wasting time on intellectual curiosities, but destroying our planet for glorified gambling is not something I'm happy about. I want cryptocurrencies to go away entirely on this basis, philosophically.

Current BTC prices are a bubble

Before we go into tether, reminder that at the time of writing, the plot of BTC price against the S&P500 looks like this
BTC price has increased by ~800% since March. Still, no one uses it for anything useful since the last bubble in 2017, or the other one before that in 2013. This is another bubble however you put it.
BTC is not "new technology"
10 years the internet became popular, Google and Amazon already existed. We're 8 years after the popular emergence of deep learning and it has already revolutionized machine translation, computer vision and natural language processing in general.
You could argue that deep learning and the internet existed before their emergence, but so did cryptocurrencies. Look up b-money and hashcash for instance.
Bitcoin has existed since 2008 and emerged in popularity around the same time as deep learning did, yet we're still to find actual uses for it except speculation and criminal uses. It's a solution waiting for a problem.
Institutional investors are also idiots
The narrative this time is that "institutional investors" are buying into BTC. This doesn't mean it's not a bubble.
Many of the institutions were buying through Grayscale Bitcoin Trust. Rather, many of them were chasing the premium over net asset value that hovered around 20%. Basically, lock money in GBTC for 6 months, cash out and collect the premium as profit. Of course, this little Ponzi couldn't last forever and the premium seems to be evaporating now.
Similarly, totally-not-a-bitcoin-ETF-wearing-a-software-company-skinsuit Microstrategy (MSTR) trades at a massive premium over fundamentals.
There will always be traders chasing bonuses from numbers going up, regardless what is making the number going up. The same "institutional investors" were buying obviously terrible CDOs in the run-up to 2008.

Tether is lunacy

Tether is a cryptocurrency whose exchange rate is supposed to be pegged to the US Dollar. Initially this was done by having 1-to-1 US Dollar reserves for each tether issued. Then they got scammed by their money launderer, losing some $800M, which made them insolvent.
Anyway, now tether maintains their reserves are whatever they want them to be and they haven't gotten audited since 2017.
You know, normal stuff.
There's a problem to backing your USD-pegged security with something that isn't US Dollars. Namely, if the price of the thing you're backing your US Dollars against goes down, you're now insolvent. If you were backing $10B in tether with $10B of bitcoin, then the bitcoin drops by half, you're insolvent by $5B.
And then this spotlessly clean company they somehow added $20B to their balance sheet in the second half of 2020
Reminder: one side of that balance sheet is currently floating around the cryptocurrency ecosystem. Cryptocurrency traders own it as an asset and sell it to others. The other half of the balance sheet is whatever tether wants.
There are only two possibilities that explain tether's growth:

• Massive unbacked issuances, because they're afraid their scam has run its course.
  
• Money laundering. Lots of it.
  

It could also be a happy mix of both.
One particularly interesting date is 30/8/2020, where tether added $3B to its balance sheet overnight. This is interesting because it predates the subsequent movement in bitcoin price and large movements in other cryptocurrencies.
The story from tether and tether's bank's CEO is that this money largely comes from foreign nationals through an OTC desk which implies the transaction goes as following:

1. A foreign national sends money in a foreign currency to an OTC desk. This is exactly as clean as you'd think -- often raw cash transactions in the millions.
   
2. That OTC desk converts the money to USD and sends it to tether's correspondent US bank. The OTC desk gives tether to the foreign national.
   
3. Wait tether has a correspondent US bank?
   

Oh, I forgot to mention, no bank wants tether as a customer because they obviously break KYC/AML compliance. So tether first bought invested in a bank called Noble which then lost its relationship with Wells-Fargo when they realized tether were lying to them about AML. Poor tether lost its legal access to USD.
Tether has been banking in the Bahamas with a bank called Deltec since. First they had a money launderer called Crypto Capital Corp to send funds to customers, who stole the $800M from them and subsequently went to jail.
But worry not! Tether found a way to get banked in USD afterwards. Curious coincidence, an executive at Deltec was randomly blogging about buying small US community banks in 2018. You know, that thing money launderers do.
So tether's story is that in 2020, they took in roughly twenty billion USD of shady foreign money into the small community US bank their deltec bankers bought. These transactions are necessarily breaking KYC/AML. The foreign parties to those transactions wouldn't take such a rickety route to convert billions into cryptocurrencies if they weren't laughed out of the room in serious banks.
But of course, Deltec will say it did KYC on tether. Really solid KYC, clearly, since they're the last bank on earth taking tether's business. Tether says they do KYC on their customers (the large OTC desks). And I'm sure the OTC desks would be shocked, shocked if the cash money they get in Russia and China turns out to be dirty. So everyone can pass the buck of responsibility down the road and claim "We do KYC on our customers".
Sure you do, tether. If you did such great KYC, you wouldn't have such problems finding banking relationships. I mean when even HSBC is not doing business with you you're apparently more obviously moving criminal money than fucking drug cartels.
And, according to tether's people, this money is what's backing tether's reserves. Money that will get frozen the instant a prosecutor even looks at it.
Reminder: the above is the charitable, positive case for tether.
The less charitable case is that they took crayons and added zeros to their balance sheet, and that there's a couple billions waiting to burn a hole in the crypto ecosystem.
Anyway, the $25B garbage fire that is tether will make a great book/netflix series at some point and their hilariously stupid CTO going on podcasts while flinching on questions about how BTC ended up on their balance sheet will be a fun part of it.
But I'm not here to write a book, I'm here to make money by shorting all of this. For my purposes, even in the positive case tether is a ticking time bomb waiting to burn a hole in the crypto ecosystem, because...

KYC and AML are coming for cryptocurrencies

If you listen to "crypto news", all incoming crypto regulation is just great, because that means crypto is becoming legit. However, companies investing in crypto are very angry about them.
This is because crypto transactions break the FinCEN travel rule, where KYC information should "travel" along transactions, to prevent money laundering obfuscation schemes.
Of course, according to the crypto industry this is "stifling innovation". A more reasonable take is that by being leaving the crypto industry outside normal financial regulations, we're enabling a "race to the bottom". As we saw with shadow banks in the 2000-2007 era this leads to "creative banking". I don't want my bankers to be creative, I want them to be solvent.

Tether's effect on the crypto ecosystem

When tether implodes, it's taking most of the crypto industry along for a fun ride. Tether can implode in one of a few ways:

1. A BTC price crash triggers it. If
   
2. Regulators decide they've had enough of AML avoidance and regulate them.
   
3. The NYAG investigation, which is waiting for an update in a few weeks, finds something and shuts them out.
   

Let's assume tether falls to $0 for simplicity. The analysis is the same directionally if tether significantly "breaks the buck".
This doesn't happen instantly, but it happens quickly. The peg breaks, and most people holding tether will try to sell it for other crypto (BTC, ETH, etc.). This puts downward pressure on the price of tether, incentivizing even more people to "pass the buck". Automated inter-exchange arbitrage bots might try to exploit emerging gaps in bid-ask spreads, only to end up with worthless tether instead, as their operators rush to pull the plug.
Then, we have a small village of cryptocurrency enthusiasts being out some $24B. With the trading bots turned off and the trading lubricant (a dollar pegged asset) gone, the bid-ask spreads blow up. You get a predictable flight to safety -- that is, to real money. This puts downward pressure on BTC.
While all of this is happening, there are all sorts of fun second-order effects happen. A lot of DeFi derivative products are priced in cryptocurrencies, so having normally stable prices shuffle around (eg. USDC price moving above $1 in a flight to safety) triggers a tsunami of margin calls. Some exchanges might insolvent (they're the ones redeeming tether for USD after all).

If BTC price drops below $8000, fun things happen

Currently, the price to mine a BTC is roughly $8000. Most of the mining comes from huge mining farms using subsidized coal in China, and mining costs more the more hardware there is to mine it.
Since the price of BTC hasn't substantially dropped below cost to mine we're in for a fun experiment if the price drops below this threshold. Most of these farms should turn off so that the price to mine comes back to breakeven in a case of prisoner's dilemma.
But if too much hardware turns off, this leaves mining hardware idle and the door becomes wide open to a 51% attack. It's not clear at what price below breakeven cost to mine a 51% attack becomes a serious threat, but once this threshold is crossed, we're in the "irreparable harm to BTC" risk zone.
And for a person like me, who just wants to see crypto disappear forever this is very exciting.
Maybe those mining farms could be replaced with nice forests soaking up all the carbon they emitted for posterity. One can hope.

How do I bet against all of this?

Microstrategy (MSTR) is, at this point, a bitcoin ETF wearing the skinsuit of a dying software company.
Michael Saylor, MSTR's CEO, is quite the character. I wrote a lot about his lack understanding of what a currency is, but it's on another level to look at the early stages of a bubble pop and decide this is a good time to buy $10M more of the stuff, as seen here
However, this bubble is tame by Michael's standards. Look at the historical stock of his company
What's happening on the left is that Saylor pumped the numbers with accounting fraud then the SEC took issue with the fake numbers. The stock dropped 90% practically overnight. Their accountants, PWC, paid $51M in fines. Saylor and friends paid fines, partly with company stock.
You could also short GBTC, but when Mr. Saylor provides you with an options market instead, why not use it? Shorting on crypto exchanges that might become insolvent in the very event you want to happen with this bet is a bad idea, on the other hand.

Mike can't cash out

The bitcoin market is illiquid and leveraged when it comes to real money coming in and leaving the ecosystem. Buys in the $10M-$100M seemingly move the price of BTC by upwards of $1000 in the last weeks. This means hundreds of millions of real money means tens of billions in movement in BTC market capitalization.
Now imagine what cashing $1.1B of BTC into real money would mean for the price. And this is purely in market terms, before the PR damage from bitcoin's demigod abandoning ship would have second-order effects.
Saylor has painted himself into a corner. Even if he wanted to cash out, he can't.

MSTR fundamentals: Why it should be valued below $10

In early 2020, MSTR was a slowly dying business. The EBITDA has been rapidly evaporating in the last 5 years
At that point, MSTR a stock price of $115 meaning a market cap of $1.1B. This included some $560M of cash they were sitting on. I presume the remaining $550M was an implicit sales premium for the inevitable private equity firm investors expected was going to relieve them of this stock and make the business profitable again.
Of course, they didn't sell.
Instead, they took the $560m they were sitting on and bought $400m of BTC at prices $11k and $13k in late summer 2020. Then, in early December, they took on $600m of debt to buy BTC with at $23k. They also bought $10m more in January at a price of $30.5k.
At this point, we can mostly value MSTR like a trust.

• Price the underlying software business as being worth $600M, as the market did before the bitcoin nonsense. If BTC went to $0, this is what we'd value it at, and the MSTR stock should be around $65.
  
• But wait! MSTR took on $650M in debt in December. Their actual value with a BTC priced at $0 should be much, much lower than $65 depending on how you value the debt. You could make an argument it should be in the single digits.
  
• They hold 70,784 BTC. At current prices ($32,000) this is worth roughly $2.2B. With the current market cap of MSTR ($577 stock price), this means MSTR is currently priced at an eye watering $3B premium over fundamental value.
  

GBTC's 20% premium-to-NAV is a joke compared to the MSTR premium.

Greeting Theta Gang boys and girls,
I hope you're well and not bankrupt after last week. I'm just now recovering mentally myself. I saw a few WSB converts and some newbies asking for tips, so here you go. V2 of my Options guide. I hope it helps.
​
I spent a huge amount of time learning about options and tried to distill my knowledge down into a helpful guide. This should especially be useful for newbies and growing options traders.
While I feel I’m a successful trader, I'm not a guru and my advice is not meant to be gospel, but this will hopefully be a good starting point, teach you a lot, and make you a better trader. I plan to keep typing up more info from my notebook, expanding this guide, and posting it every couple months.
Any feedback or additions are appreciated
Per requests, I added details of good and bad trades I made. Some painful lessons learned are now included. I also tried to organize this better as it got longer.
Here's what I tell options beginners:
I would strongly recommend buying a beginner's options book and read it cover to cover. That helped me a lot.
I like this beginner book: https://www.amazon.com/dp/B00GWSXX8U/ref=cm_sw_r_cp_apa_OxNDFb2GK9YW7
Helpful websites:

• Tasty Trade (TT) and Ally Invest have helpful articles and videos.
  • https://www.tastytrade.com/tt
  • https://www.youtube.com/c/tastytrade1/featured
• Ally training:
  • What is options trading? https://www.ally.com/do-it-right/investing/trading-options-for-beginners/?CP=EM2012111
  • Top 10 options mistakes: https://www.ally.com/do-it-right/investing/top-10-option-trading-mistakes/?CP=EM2012111
• 3 common option mistakes: https://us.etrade.com/knowledge/library/options/common-mistakes-options-traders-make
• Common options strategies: https://www.optionsbro.com/basic-options-strategies/
• Investopedia has tons of great investing info for stocks and options: https://www.investopedia.com/
• Kamikaze Cash Theta Gang Videos: https://youtube.com/playlist?list=PLOweupE79XXiBaeH_xBpkUcYUsrAaKQen
• 20 rules of professional traders: https://www.investopedia.com/articles/active-trading/022715/20-rules-followed-professional-traders.asp

Don't trade until you understand:

• You can lose your entire contract value when buying.
• You can lose a lot of money when selling "naked", theoretically unlimited.
• How option expiration works.
• Theta (decay) and how it works. This is imperative since it's attrition when buying and a payout when selling. https://www.optionseducation.org/advancedconcepts/theta
• DTE: Days till expiration/expiry
• Options positions with respect to price:
  • ITM: In the money; strike is below stock value. Signif
  • ATM: At the money; strike is just at or above the stock value, often very highly traded. Can be very effective with moderate - long term expiry.
  • NTM: Near the money; strike is above the stock value, but fairly close. Slightly unofficial term.
  • OTM: Out of the money; price is at least a few strikes from the current stock price. I would say 10-30% over stock price.
  • Very OTM: Not a real definition, this is essentially a lottery ticket. Cheap, but almost certain to expire worthless unless there is explosive movement.
• Understand delta in general and how delta changes with ITM and OTM options.
• Understand all the greeks at a high level, as you get better understand them well. The greeks: https://www.optionsplaybook.com/options-introduction/option-greeks/
• IV, IV crush, and how IV affects pricing. In general, you want to sell when IV is high and buy when the IV is low. Increasing IV is good for held calls/puts. IV drop or crush is generally good for sellers.
• Selling options can be quite beneficial. Once you have a good general understanding, lookup thetagang . Kamikaze Cash has good youtube videos on most theta strategies (linked above). I personally believe selling options (especially cash secured) is much safer and can consistently make you profits. Θ Gang 4 life.
• FOMO and how to avoid chasing a dangerous trend. DO NOT CHASE FROM FOMO!
• What intrinsic and extrinsic value are. Know how they are affected by being exercised/assigned and how theta affects them.
• Understand that some of WSB recommendations are straight up high-risk gambling and factor in the information accordingly. Be careful with Meme stocks and the survivorship bias on YOLO plays. However, I love the sub and think it’s hilarious. It has a lot of valuable information / DD if you are comfortable with the “colorful” language. It’s also great if you like rocket ship emojis.

Basics / Mechanics

• Understand the 4 "main" option types. Buying or selling a call and buying or selling a put. Spreads and more complex multi-legged option strategies are based off these in some way (see below)
• You can sell calls with 100 shares of stock or if you own an underlying longer term option; see LEAPS and PMCCs later. Selling calls naked is incredibly risky and often requires Level 4 (very advanced) permissions and usually a lot of capital. I will literally never sell calls naked since I don't want to ruin my life and end up living in a dumpster eating saltine crackers.
• Puts can be sold/written cash covered (cash secured), which means you have the cash in your account to buy 100 shares. Your broker will put this money on hold until the trade is closed. Puts can be sold "naked" using Margin and Level 3 (with most brokers). Your broker will hold a percentage of cost of 100 shares (often 30-40%, 100% on meme stocks) allowing you to sell more puts. This increases your available capital/power as well as increasing risk.

General Tips and Ideas:

• Don't EVER leave (short) spreads open on expiration day, close them. (more details below)
• Start off trading very small. Slowly build up over weeks / months. You need to get accustomed to a fifty dollar swing a day, then a few hundred, then a few thousand. You need to ensure you don't get emotional (see below). I started trading options with 5k, then 25k, 50k, and later over 100k. I added my own funds over time and used my gains to build my account. Don’t go all in immediately, that’s dangerous and unwise.
• Especially as you build up the amount of money you have invested, keep it diversified among several stocks.
  • Don't go all in on one thing, ever. Be able to take a hit from one stock and not mortally wound your portfolio.
  • A company may be doing great, then there's a major product issue out of nowhere. If you are overexposed in one stock this can really hurt you.
  • I had to roll options I sold that were about to expire completely worthless because FDX's CEO changed and the stock took a hard dip.
• Don't trade emotionally. If you realize you are emotionally trading for vengeance, you should probably exit the trade and cool off for several days with that stock. Same if you get caught up in a wave of hysteria.
• Have a plan for every trade, ideally with entries / exits that are specific values, ranges, or a set condition. This helps remove emotions. This is super important for strong movements and high volatility (see later).
• Use an options profit calculator from your broker or an online one before entering a "new" trade, especially a complex multi legged trade: https://www.optionsprofitcalculator.com/
• “Rolling” an option: Closing your existing option and opening a similar one at different strike and/or expiration.
  • Rolling a call “Up” would be selling a call you own and buying a cheaper call at a higher strike.
  • Rolling a put “Down and out” closes your original one and buying or selling one at a lower strike at a longer expiry.
  • Better broker interfaces have a literal “Roll” button. I know E-trade does. You can manually do it by selecting relevant contract legs.
• If you have a losing trade, re-evaluate it. If your initial assumption is definitely incorrect, close it. Don't stay in losing trades forever and lose the entire value of the option over stubbornness. If you re-evaluate and you think your assumption was right, hold, potentially consider adding another cheaper option (or buy another call / put). Rolling out sold options can help here.
• Don't try to day trade, especially with options. It's statistically unlikely to be profitable. Day-trading with options introduces extra liquidity risks and is dangerous, especially with spreads.
• Try not to over-trade, you'll likely mis-time the market over time. When I get emotional I over trade, then lose additional money on wash sales. If you scale your entries into positions it should help alleviate your desire to exit positions when they turn badly against you. Whenever I buy calls I do it at larger increments after W almost made me loss my hair; luckily it eventually came back.
• NEVER enter a position on a stock you have no idea about, especially when you read about it online or heard about it from some rando.
• At market open options contracts are often volatile and inflated. Buying during this time can be more expensive. Options are usually cheaper mid-day, I read somewhere 2-3PM is cheapest. I’ve had success around 12-1PM EST after prices settle.
• Try wheeling on cheaper stocks once you get all fundamentals down.
• When selling puts if you are very bullish consider "doubling down"; note this is higher risk. Use the credit from your put sale to buy shares or a cheap call. This can be roughly inversed with puts, except I wouldn't ever recommend shorting shares.
• Learn from your mistakes. You can’t go back in time and beating yourself up (to a point) is useless. Make a physical &/or mental note of it so you don’t do it again. If you don’t learn from it, then beat yourself up so you won’t do it again.
• If you have friends that like to trade, I find it helpful to discuss strategies and planned plays. I talk openly with my close friends about my current holdings and planned trades, it helps keep me accountable. If I get a wide-eyed look, I might be doing something excessively risky or stupid. I’ve over-leveraged myself in calls twice and I knew I shouldn’t have done it both times. When I tell my friends what I did and I’m embarrassed, it exemplifies the face that I shouldn’t have done it in the first place. You will also get ideas for new strategies or plays from them. It’s good to stay versatile and use multiple strategies when appropriate. Beware of group think/echo chambers.
• I recommend NEVER telling someone what to buy/sell and when. I’ll tell people MY plays or what I like and why, but I will not encourage them to emulate what I do. Depending on the audience, I’ll tell them my exact positions along with my exit and entrance strategy. With closer friends I’ll offer my thoughts on their trades (if asked). If my friend is doing something really risky (one of my friends does some scary stuff) I may ask them if they want my advice, and provide it, especially if they overlooked a risk/event. I will not encourage someone to execute/enter a trade since it has a high potential for hurt feelings or animosity all around.
• Don’t fall in love with a stock. Just because something made you money before and you have high confidence in it doesn’t mean it will keep performing. I joke that FDX betrayed me when it started dipping and losing me money. I was over-confident of its bounce-back and sold too many puts too quickly. I’m in several losing trades because of it. However, I will keep good stocks in my rostetracking list or try different strategies or re-enter trades when they change their behavior.
• As you start to both buy and sell options and get more experience in general, you'll start seeing the two sides to every trade. You will likely start adjusting your strategies or trying new trades out because of this. Things will likely click one day. Most/all the greeks and options concepts will become almost second nature. For me this was when I could build an Iron Condor from scratch, which was a watershed moment involving a good understanding of many strategies.
• Understand Liquidity and volume.
  • Trading in low volume, low open interest contracts results in wide bid/ask spreads and difficulty having your contracts filled. Look at all the data for a contract, not just the strike and price.
  • Monthly Expiration dates typically have better liquidity.
  • Multi-legged trades (Common examples are 2-legged vertical spreads or 4-legged iron condors) have more difficulty being filled, especially on bad brokers like Robin Hood. Having very liquid options for all legs is extremely helpful in obtaining timely and well-priced fills, which maximize your potential profits.
• Time in market vs timing the market:
  • It is extremely difficult to time the market perfectly. If you wait for the perfect opportunity forever, history has proven you will miss out on gains. Keeping all your money out of the market has proven to be ineffective. Now if there is something serious happening with a stock/the market (like say a new pandemic), don’t go all in. I recommend entering incrementally at dips. If the stock has huge upside potential it may never go down, so it might make sense to partially enter at the current price.
  • IMIO selling puts is a great strategy to get into a stock you like, or at least make money off it. I think buying stock in lots of 100 is usually for suckers. Selling an ATM or ITM put (assuming the math works out) on a stock you were going to buy and hold is ALMOST free money.
  • I recommend keeping some cash available regardless. If you have a very large account or expect a downturn, hedging with indexes like QQQ, SPY, or VIX or calls/puts may be wise.
• Every trade can't be a winner. You will take some losses, you must get used to it. I don’t like having a realized loss of 1K or more on any trade. However, this will happen, especially with larger accounts.
  • As long as you win more often and beat the S&P that year I consider it okay. I’m kind of aggressive, so I consider 20%+ annually good. 30%+ annually is great. 40%+ and I’m dancing. After trading options I am almost baffled by my old belief that 5% annual returns (mostly from dividend ETFs) was “good”. That’s nothing to me now since I’m willing to take risks. Note: While lots of people danced in 2020, realize that’s an insane Bull Run year and is atypical.
  • Adhere to your own risk tolerance and never over-extend yourself, especially with margin use. Don’t make huge gambles leaving you uncomfortable. Only gamble with money you are willing to lose.
  • My personal strategy is to make safer gains for the year and then enter slightly riskier strategies using those gains. I can be slightly-moderately more aggressive and compound my gains. For me I often sell puts to make money, then when I see a big opportunity I’ll sell a put and buy an OTM or moderately ITM call.
• Understand it’s not safe to try and get rich overnight. However, once you hit big “steps” things may start to snowball. You can enter more positions and take more risks if you choose to.
  • For me this when I hit 50k, then 100k. I was able to balance low and moderate risk positions to more significantly grow my account. I’ll even do a high risk thing now and again because my gains can absorb it (assuming I have them).
  • I can’t wait to get to 250K, then 500K. I know it’ll take quite a long time, but I am confident I’ll eventually be able to have 500K and (hopefully) 1M in my non-401k trading account with gains and additions from my job. I can only imagine how “dangerous” I will be with that kind of capital.
• If you missed "the next big thing" like AAPL, TSLA, or the time machine I’m building in my basement. Don't get upset, learn from it. Adapt and become a better trader for next time.
  • Figure out why a company was so promising, before they mooned. Determine how you would have traded differently in hindsight. Apply those lessons to the next company you believe has long term growth prospects.
  • For me that's putting in 1-2.5k towards shares and/or buying LEAPS on it. Depending on my bullishness I may buy “cheap”, fairly far OTM calls. The far OTM options are sort of lottery tickets. If I'm right the (relatively) low cost will have explosive profits; if I'm wrong, they didn't cost that much so it's a calculated loss I’m willing to accept. For more serious bets I’ll buy ITM LEAPS to run PMCCs on. I also like to buy 1-2K in my 401k for very long-term plays.
• The stock market hates uncertainty, it seems to crave the status quo. A shakeup can potential tank a stock, even if it's nothing. With shares you can wait it out, but this can be problematic for options. If you see volatile/uncertain times ahead (politics, disease, manufacturing, earnings, etc.), you might want to reduce your overall portfolio risks or hedge.

Profit Retention / Loss Mitigation

• If selling options, it is a viable strategy to close early after a large gain with many DTE left until expiry. See TT videos / strategies on this.
• Don't hold options through earnings unless you literally want to gamble. I like playing on earnings run ups, but that can be risky.
• If you hold options through earnings, IV crush will happen immediately afterwards, devaluing the option. However, if the option is profitable enough, IV crush won’t matter, which will still make money for a call buyer. A sold put sufficiently far OTM will benefit from IV crush, even if the stock dips after slightly bad or lukewarm earnings.
• Don't throw good money after bad. Don't gamble on a recovery if your assumption appears to be wrong or the market is flat out tanking. If you are wrong and still believe in the company, wait twice as long as your original plan (wait for your 2nd entry point vs 1st) before adding to your position.
• Consider using stop losses to lock-in profits on rides up or sometimes use them to prevent losses. Note, stops can be easily triggered in volatile options. Now when I'm up a lot on calls (especially around earnings or large momentum run-ups) I always set stop losses. I have been burned too many times. In December 2020 I didn't set a SL on several thousand dollars of FDX calls I was already up on and I "lost" ~$5K of unrealized gains. If you're up big, don't get too greedy.
• A possible strategy if a stock is on a tear and you have multiple options open: Close some positions (I prefer to do this incrementally if the stock has momentum), but leave 1+ open in case the stock goes into outer space/the floor. Next, set a stop loss with a little buffer below its current movement / range so it doesn't get hit unless the stock falls hard. Finally, watch the stock closely and if it keeps rising, keep moving the stop loss up in little bits incrementally. This will let you keep more profits on a hot streak, but give some protection and secure more gains. It will also help eliminate FOMO if a stock exceeds your expectations.
• Have rules when to roll out, down & out, or up & out. I like TT’s roll at break even or at 1x loss and to always roll for a credit (or for me a very minor cost). Obviously these rules need some monitoring. Know your stocks, the news, and technicals so you don’t jump the gun.
  • If you roll early for a credit and you’re right, it’s not the end of the world. You’ll just need to hold longer, which will obviously tie up capital. Sometimes it’s better to tie up some money (especially if you aren’t paying interest) than eating a huge loss.
  • Rolling too late can be worse though. I currently have a very underwater FDX put I sold that is over 2x loss, rolling it does almost nothing unless you want to pay a debit or extend it extremely far out.
• On huge options gains, I strongly you recommend taking profits by rolling up/down or incrementally sell your contracts at several different prices (this is why having multiple contracts is nice).
  • Rolling up involves selling your initial call, then using a fraction of your proceeds to buy a cheaper, further OTM call with the same expiry; puts are inverse this. When rolling up I like to ensure the new option’s cost is 15-40% of my realized gains. I’ll buy a more or less expensive new optoin based on my convication to the stock and predicted movements. You can also roll up and out to get a further expiry and strike.
  • This is monumentally important if you are playing with incredibly high rising stocks or during a short squeeze.
  • Sad story time: I completely screwed up when I forgot to roll up, twice, during the GME gamma/short squeeze. I didn’t take my own advice; I didn’t have a real exit or transition plan and I got emotional. It all happened so fast and I was at work; the insanity of the run up and subsequent gamma squeeze caught me off guard. I should’ve clocked out and thought through the situation for 15-30 minutes to form an impromptu plan, then executed trade(s). My moderate risk tolerance coupled with my desire to take profits took over. When the stock partially cratered after a run up, I sold to retain gains. In the heat of the moment I thought the squeeze was squoze and it was going to plummet into the ground and I wasn’t being rational.
    • On 1x 4K call I would’ve made an additional 15-25K if I rolled up to a cheaper contract with some of my profits.
    • I know I missed out on significantly more with a 2nd call I had. Depending when I rolled it, it would likely have been an additional 25-50k in profits.
  • I talked about learning from your mistakes above. This mistake is branded into my brain due to the massive gains I missed out on by not rolling up. I’m furious with myself as I write this 1 week after the GME gamma squeeze, I’m a planner and I didn’t plan. If anything I own is significantly up ever again, I’m rolling up (or at least setting a stop loss). If necessary, I’ll roll up a trade multiple times to keep extracting profits.
  • Learn from my mistake so you don’t miss out on gains too. I strongly recommend rolling up when you are up big on a call / roll down when you are up big on a put. This enables you to take profits, stay in the game, and keep extracting more gains.
• If you trade a lot of options, talk to your broker about a discount. I was getting the standard $.50/contract with E-Trade, but I traded over 300 contracts a quarter and was able to get the fee reduced by over $.10 by just asking. I am now doing more spreads and condors, so once my volume gets very high, I’ll ask again.
• If you have a broker that isn’t great and you want to switch, leverage your current trading fees to the new broker. Tell them you’ll move over $### thousand if they beat your current options trading fee per contract.

Trade Planning & Position Management Tips

• As you gain experience, start monitoring what kind of Delta, OTM, DTE, etc. you are most profitable with. Use it in your future trades. You'll often see the tasty trade 30-45DTE .3 Delta strategy for selling.
• Before entering a trade, look at rough technicals like resistances and supports to consider your relevant strikes as well as entry/exit points. Look at upcoming earnings & dividend dates as well as stock/market news.
• Consider staggering strikes and expirations for safety and diversity; it’s nice to avoid assignment on 3 puts at once because you used the same strike for all 3.
• Incrementally enter positions on large rises/falls. One of my favor strategies is to buy dips after over reactions. By doing this slowly in large price "steps" it helps combat FOMO and helps you avoid getting slaughtered.
  • This will also help you avoid "chasing a falling knife". It also ties into having a plan.
  • I set alerts at several predetermined prices and I REALLY try not to enter new trades unless I hit my preset points. It makes me less emotional and usually more effective.
• Don't buy far expiration options with poor liquidity for shorter term plays. I bought 1x GME 1-year+ LEAPS call before the 2021 short squeeze. That was stupid, I should've bought 2-3x 60-120 day calls to have better liquidity. I also paper-handed it and missed out on my lambo.
• If selling options, consider rolling (for a credit) to avoid assignment when it makes sense / meets your plan. Rolling closer to expiration can be a valid strategy to get theta on your side. On the flip side, if the stock moons or plummets it could've been better to roll before it got crazy deep ITM. See rolling “rules” above.
• Covered Calls:
  • If a stock has a large movement range, I think it can be worthwhile to wait to open a CC after the last one is closed/expires. I have been more successful waiting for another opportunity vs. opening one immediately on the Monday after the second the last one expires.
  • Consider selling covered calls at all time highs/peaks. If you sell a CC and the stock dips significantly, and you think it’s temporary, you can buy to close your CC for a quick profit, then reopen it later.
  • If you own Meme stocks, selling covered calls runs the risk of missing out on large gains. On these stocks I typically only sell them further OTM than I normally would or not at all. If I do sell CC on a Meme stock I try to ensure I have 25-100 other shares that won’t be called away.

-Advanced Beginner-
Spreads

• Spreads (with 2 legs) are neat because they manipulate how delta and theta act. It caps your gains and losses, but you can profit with less stock movement. Try several spreads on a P/L calculator to see for yourself.
• Spreads usually require margin trading.
• Spreads allow you to define max losses (assuming you close before expiration day) and use less capital.
  • Experienced traders will open many spreads at identical/similar strikes to heavily profit off movement. Spreads can make you/lose you a lot of money if you are right.
  • For example. I could make a $200 premium off a $500 risk trade, max loss would be $300. This is much more effective capital utilization than a naked or cash secured put, however it does not have the same downside protection or “wheel” potential as a sold put. Higher risk, higher reward.
• Vertical Debit spreads: I think of these like mini calls/puts. I personally don’t use them unless calls are outrageously expensive or the break even is absurdly high, but there’s nothing wrong with them. A call debit spread will lower your breakeven and overall cost vs just a call. You can do clever things like making a positive theta call spread if you’re creative. I like doing this since I hate losing money to theta.
• Vertical Credit spreads:
  • Very good theta strategy to define downside/upside risks.
  • A put credit spread is bullish and allows you to bet on upward movement with less capital and defined losses.
  • A call credit spread is a bearish strategy that allows you to bet on downward movement. These are very cool since they allow you to sell calls without selling naked calls, which can ruin you financially. I see selling these as better than buying puts since it’s so much easier to be profitable; to be redundant, Θ rocks.
  • https://www.schwab.com/resource-centeinsights/content/reducing-risk-with-credit-spread-options-strategy-0
• I repeat this on purpose: Don't EVER leave short spreads open on expiration day, close them. If you don't close, they better be VERY far from the strike on a non-volatile stock. In after hours a stock can jump/dip below your strike and be exercised without the other leg to protect you. This can lead to massive, life ruining losses. This is not an exaggeration, google this and be scared. It happened to a fair number of people with TSLA. Video explanation: https://www.youtube.com/watch?v=rtVFj9nRRDo&t=315s
• Short Straddle:

Trading Mechanics, Taxes, Market Manipulation

• Learn about wash sale rules. They suck and are very easy to activate with options. This will eliminate your ability to write off losses. Over trading can easily cause wash sales. https://www.investopedia.com/terms/w/washsalerule.asp
• Short attacks:
  • Learn to recognize these sketchy attacks by hedges/firms. They manipulate the market, it’s been documented countless times. A common one is rapid short selling, which pushes the price down.
  • Short Ladder attacks:
    • https://www.google.com/amp/s/seekingalpha.com/amp/instablog/11442671-gerald-klein/3096735-anatomy-of-a-short-attack
    • Some people say short ladder attacks don't exist. I've seen some very strange stock nosedives off low volume, so I tend to think they do.
  • If you plan well enough and the market doesn’t give up on the stock you may be able to use it as a great opportunity to buy the dip.
• Cramer explains how he intentionally manipulated the market when he ran a hedge fund years ago. Multiple links to the video are below since this video gets pulled often, Cramer / The street never wanted this to go public.
  • Reuters article: https://www.reuters.com/article/cramer-interview-idUKN2036292620070320
  • httpss://youtu.be/r07Gg92YjOI
  • https://youtu.be/VMuEis3byY4
  • https://youtu.be/JEzsfPmh894
  • https://youtu.be/QFfjX8dW-QQ
  • Due to this video I don’t fully trust Cramer. His show can give you stock ideas to buy (or inverse), but you never know where his true loyalties lie.
• Plan for taxes if you are up big. You may need to over withhold or contribute to taxes quarterly depending on your situation. https://www.irs.gov/taxtopics/tc306

-Intermediate / Advanced Strategies (work in progress)-
You’ll notice many of these strategies inverse one another.
Options Strategy Finder
This website is great for learning about new strategies, you’ll see many links to it below.
https://www.theoptionsguide.com/option-trading-strategies.aspx
Short Strangle / Straddle

• Both of these strategies profit from little price movement. I recommend using a P/L calculator to determine BE, profit, etc.
• A straddle sells (or buys) two options at the same expiry and strike.
• A strangle sells (or buys) two options at same expiry with different strikes.
• Both these strategies involved selling a Call and a Put for a credit. Straddle uses ATM legs, strangle uses OTM legs.
• Limited max profits and unlimited risk. Due to the unlimited risk, I am not a fan. However, many people like these a lot.
• https://www.theoptionsguide.com/short-strangle.aspx
• https://www.theoptionsguide.com/short-straddle.aspx

Iron Condor and Iron Butterflies

• These strategies profit from neutral or mostly neutral stock movement. They receive a credit to open and benefit from theta decay. If your stock is range bound, these may be a good choice.
• These are both 4 "legged" trades, so you will have 4 trading fees to enter or exit the trade. A lower cost or zero cost broker shines here. However, “bad” free brokers will give you poor fills, which may not be worth the discount.
• Condors and butterflies have "wings" which are your purchased puts and calls. The wider the wing the higher the max profit/risk. The condor body can be riskier and skinny with a narrow high profit range or wider for a much greater chance of success with lower payout.
• An iron condor is built by combining a put credit spread and a call credit spread with the same expiry.
• An iron condor can be thought of as a modified short strangle with limited risk, and therefore a bit less profit. I prefer defined limited risk.
• The butterfly is similar except instead of a plateau it has a sharp peak. My personal mental note is that a condor looks more like a strangle with wings, while a butterfly looks like a straddle with wings.
• Pay attention to earnings dates when you open these, I have forgotten to check before and it led to bad trades.
• https://www.theoptionsguide.com/iron-condor.aspx
• https://www.theoptionsguide.com/iron-butterfly.aspx

Long Condor (Debit Call Condor)

• The debit version of an Iron Condor. You expect the price to stay inside your defined range. This strategy profits from neutral or mostly neutral stock movement. I’ve never tried this, Iron Condors make more sense to me.
• Limited risk / limited reward.
• https://www.theoptionsguide.com/condor.aspx

Short Condor (Credit Call Condor)

• Inverse of an Iron Condor. You expect the price to go OUTSIDE your defined range. These are useful when you expect significant price movement. Credit to open.
• Limited risk / limited reward.
• Can be harder to set up. I want to try these, haven’t yet.
• https://www.theoptionsguide.com/short-condor.aspx

Reverse Iron Condor

• Inverse of an Iron Condor. You expect the price to go OUTSIDE your defined range. These are useful when you expect significant price movement. Debit to open.
• Limited risk / limited reward.
• https://www.theoptionsguide.com/reverse-iron-condor.aspx

LEAPs

• LEAP Options are options that are long term with many DTE, often over a year until expiration. LEAP calls are great for long term growth plays (downtrends with LEAP puts) or simply when you really like a company and can't afford 100 shares. LEAPs (or any "longer term" option) enables you to sell a PMCC or PMCP (below)

PMCC / PMCP

• PMCC or PMCP are poor man's covered call (or poor man's covered puts). They are diagonal options often used with purchased LEAPs. You sell a shorter DTE call/put with a further OTM strike than your purchased call/put. For PMCC/PMCPs it is often recommended to recoup your extrinsic value as soon as possible, some recommend with your first call CC or put sale, to ensure you are positive if the option is assigned early. These have a lot of moving parts and strategies. If you buy a barely ITM call/put and sell a nearby strike call/put you run the risk of the purchased option getting "blown by" on large stock movement and ending up with a very negative losing trade. Keeping your purchased LEAP deeper ITM should protect you. Check your initial PMCC using an options calculation to make sure you don't screw up.
• I'm currently tinkering with these myself. So far I like .7-.9 delta call LEAPS with 30-45 DTE calls on my CC. The goal is to hold the LEAP long term, potentially until expiration, and constantly sell calls/puts on it that expire worthless. Typically the call/put is rolled up and out or down and out if it's going to be assigned, unless you don't want your LEAP anymore.
• Some people look at these many sold CC or puts as profits, I look at them as lowering my cost basis until it's zero (or even negative). I have a page in my notebook I write each CC on my NIO LEAP (I Meme stock sometimes). I find it satisfying to slowly see the cost of the original option disappear. When I originally wrote this I had ~2 years left on it and it's 9-10% paid for; that doesn't even count the actual gains the LEAP has.
• TT states this is considered an IV play, which I partially agree with. You want to buy these during low IV times since an IV drop will hurt your LEAP value. I look at them more as a way to sell calls/puts on a high IV company with a lot of price movement and potential upside/downside.

Advanced Orders

• Guide to several order types: https://us.etrade.com/knowledge/events/webinars/order-types-from-basic-to-advanced-07162019
• One Triggers Other (OTO):
  • Good brokers will allow you to set these up, some will require a desktop to do it. This lets you link one action to another. In programming think of it like an if-then. You’ll tie a buy/sell to another buy/sell
  • Setting trailing stops on options is very chaotic since their price movement can be drastic due to volatility. I prefer to set my trailing stop to a stock.
  • What I like to do is set a trailing stop on a stock (or just link it to a stock price drop) and have it sell 1 share I own. Then it immediately executes a market order to sell my call. I’ve had good luck doing this with incredibly volatile plays were stop losses aren’t effective. I’ll often have an order saved and ready saved for when a strong run up starts. When my price alerts start blowing up my phone, I’ll immediately hit execute to turn it on.

​
Disclaimer:
I’m not a financial adviser, I'm actually an engineer. I’m not telling you to invest in a specific stock/option or even use a specific strategy. I’ve outlined and more extensively elaborated on what I personally like. You should test several strategies and find what works best for you.
I'm just a guy who trades (mainly options) part-time for financial gain and fun. I don't claim to be some investing savant.

Hey apes,
tl;dr Please read this whole post. This is how we can win and why Wall Street is so scared of us.
I've still got these diamond hands and I like GameStop even more. Why? Because our favorite company has received the biggest injection of consumer capital a brand has likely ever received. Our favorite company is literally the storefront battle line where the little guy is taking on Wall Street, won but got cheated out of victory, and has codified memes like "diamond hands" into a modern version of David vs Goliath. And we still just want to go to the moon. The rest of this post is going to explore 2 certainties: 1) we can go to the moon with GME, and would have already except for blatant market manipulation and fraud, so we have to recognize that this is a war and we have to innovate to get to the moon, and 2) it's actually really easy to go to the moon and we figured out the legal cheat code to get there.
Why do we know we can go to the moon with GME? Because Wall Street cheated to crash our rocket ship. But the important thing to recognize is that they crashed our rocket ship to the GME moon by shutting off consumer demand then colluding to flood supply and use short ladder attacks to impose a downward stock trend. But media pundits (who are paid by Wall Street interests) are saying "fundamentals" and presenting talk of "Reddit guys are the bad market influence video game players because they don't know what they're doing, like we do, the experts." No. Supply and demand. That's how the market functions at its most basic parts. We had them in a squeeze and they turned off demand because they have advance data that showed them how fucked they were if they didn't turn off our ability to buy more GME.
How do we know that supply and demand drives stock price? Let's assess recent trends that don't concern GME. Here are two examples off the top of my head:

1. Signal Advance. One tweet from Elon Musk about using the Signal App drove people into a company not related to the Signal App. A small cap company that trades on the OTC (remember that for later - it's important for winning a war against short sellers while playing within the legality of market rules). A sudden demand for just 2 million shares of Signal Advance spiked the share price 5,643%... yes, demand of a small cap stock pushed a price up 5,643%. Demand. The thing Wall Street shut off when we were buying GME. Here's an article about Signal Advance. I think this moment is incredible information for us and it's worth a read to solidify the idea that supply and demand drives price.

https://www.theceomagazine.com/business/finance/musk-signal-advance/
2) Dogecoin. Again, Elon is providing us incredible information here. The exposure of and resulting demand for Dogecoin, even though the market cap is huuuuuuge and the cryptocurrency was actually intended as a joke, is driving the price through the roof. The last time I checked my dogecoins they went from fractions of a cent per coin to about 8 cents per coin. That is a huge gain based solely on consumer demand and psychological willingness to join into a meme attached to the perception of potentially life changing financial gains.
So what does this tell us about GME?
The squeeze isn't squoze, apes... here's some high level confirmation of this fact in an interview that u/rekoms12 alerted me to that is actually an attempt to say the squeeze already happened. This video is an interview with Ihor Dusaniwsky, the head guy at S3, the agency that has been blasting reports that short interests in GME covered, uses a statistical model that doesn't account for naked shorting as a possibility (he actually gives the game away by explaining how short selling is supposed to work considered with data of a GME short interest above 100%), and is paid by hedge funds for market data. Keep all of those things in mind.
Here's the link: https://youtu.be/22r48IVx7c8
As u/Rekoms12 observed, Ihor contradicts himself in the interview at a critical juncture. He says the upward movement of GME was retail demand, not a short squeeze. Supply and demand... But then he says that the squeeze happened at around $300, and then the price corrected. So was it a squeeze or not? And what's very telling to me is that Ihor and the interviewer don't talk about Robinhood and other brokerages artificially turning off consumer demand at the same time hedge funds turned up supply, the point when the price starts to dip.
What else do we know that's critical to understanding that the squeeze isn't squeeze?
We're getting gaslit with a mass media narrative that says GME is a bad investment. Because fundamentals... but let's dissect that:

1. again, GameStop is literally the face and rallying point where we occupied and fucked with Wall Street in a real and serious way. So seriously that they cheated markets in broad view of the world. That is an injection of consumer capital and potential loyalty spending that has unfathomable value. The fact that none of the GME hit pieces mention the demand side market manipulation as the catalyst for a price drop or offer honest consideration of GameStop's new WORLD profile as the face of small consumers resisting rich assholes fucking us and our wives as a value add to the fundamentals definitely shows that they're lying.
2. I've read reports that the real short report scheduled for February 9th will now be delayed until Feb 25th. Hmm. What that tells me is that they haven't settled their short positions at all. The greedy fucks actually, most likely, increased their short positions while they were cheating us. So why the delay? Simple. Their only out from the short squeeze is to turn market sentiment against GME, against us, and wait us out. It's a delay tactic. They think they can win a game of patience with us where they have an options deadline they're trapped in. They need us to let them out of the trap. But I'm no Portnoy because I have diamond hands.
3. here's how bullshitty these pricks are actually being when they say their superior understanding of "fundamentals" justify them not letting us do what we want. This article is from Bloomberg. It is literally called "Is the Key to Beating the Market Written in the Stars?", stars by saying "Henry Weingarten invests his clients’ money by charting the movement of heavenly bodies," and includes line like:

By grounding astrology in the less mystical-sounding business cycle, Williams inspired a new generation of financial astrologers. The most decorated is Arch Crawford, 77. Mark Hulbert, a ranker of financial newsletters, has rated Crawford the country’s top stock market timer a number of times. One of his biggest wins came in 2008, when he essentially called the crash. Crawford, a veteran of Merrill Lynch & Co., nails his CNBC soundbites and comes off as only mildly eccentric when discussing his craft. “I have the moon on the midheaven in Capricorn, which means I gain the attention of people without trying,” he tells me. “I have been written up in all the best places.”
And the article gets deeper:
US MARKETS ARE ‘EASY’ IF YOU REMEMBER THAT TRUMP’S 2018 HOROSCOPE IS STELLAR
Here's the article; PLEASE READ IT to understand the truth of HOW FUCKING MANY (even places like Merril-Lynch!!!) HEDGE FUNDS INVEST AND JUDGE COMPANY FUNDAMENTALS BASED ON ASTROLOGY!!! And they're chastising retail traders ABOUT FUNDAMENTALS!!!
https://www.bloomberg.com/news/features/2018-07-27/is-the-key-to-beating-the-market-written-in-the-stars
Would you trust an astrologer to tell you what to do with your hedge fund and call it sound fundamentals. Please take the time to google how widespread "financial astrology" is on Wall Street. It really tells us how full of shit they are about GME fundamentals... I wish this was a joke. It's not. And, again, my hands are fucking diamond.
How do we win?
It's the Age of Aquarius, baby. I learned that on MarketWatch, though this isn't an official MarketWatch article, like the official Bloomberg article above:
https://www.marketwatch.com/press-release/age-of-aquarius-final-activation-on-december-21st-at-622-pm-utc-2020-12-14
And how does that help? It helps because of something we learned, the real thing Wall Street is so terrified of us figuring out because it breaks their short selling game: pump and dumps are illegal, but our diamond hands pump and pump strategy isn't regulated, and it's legal (and fyi, I trust diamond hands with my money way more than Tina, my wife's boyfriend's tarot card reademarket astrologer). How do we know pump and hold is legal? Two things:

1. Here's the definition of Pump and Dump from Investopedia:

Pump-and-dump is a scheme that attempts to boost the price of a stock through recommendations based on false, misleading, or greatly exaggerated statements. The perpetrators of this scheme already have an established position in the company's stock and sell their positions after the hype has led to a higher share price. This practice is illegal based on securities law and can lead to heavy fines.
But what if you just say "I just like the stock. Want to like it with me and hold onto it with me because you have diamond fucking hands, you beautiful ape baby." Or what if you say, "I'm into this stock for the memes instead of the Wall Street star chart fundamentals." Or just "I don't care what you say about it. I like it and I want it and I'm keeping it." And what if you have that market perspective about a stock and identify some legitimate underlying potential in a stock like u/deepfuckingvalue saw in our favorite stock, GME, that now has a ride or die consumer base motivated by decades of getting fucked over because we finally figured out how to say, "Apes angry. Apes together strong. Game stop."
2) And to reconfirm that our Pump and Hold Diamond Hands (PHD-H) ape market strategy is legal, I got this Wall Street Journal article on Robinhood titled "GameStop frenzy is tough call for regulators focused on transparency"; here's the link:
https://www.wsj.com/articles/gamestop-frenzy-is-tough-call-for-regulators-focused-on-transparency-11612693802
The key takeaway for me in this article is when a very important Wall Street astrologer says: “You can sell garbage to the public as long as you say to the public, ‘This is garbage and you’d be an idiot to buy it, but would you like to buy it?’” The Wall Street astrologer who said that is Harvey Pitt, a former SEC chairman. An SEC chairman told us that... WE FIGURED OUT THE CHEAT CODE APES. THE WAR WE'RE IN IS LITERALLY MARKET ASTROLOGY vs DIAMOND HANDS. AND WE HAVE THE ADVANTAGE BECAUSE WE CAN DO DIAMOND HANDED MEME PUMPS LEGALLY WHICH DISADVANTAGES HEDGE FUNDS IN SHORT POSITIONS. AND WE HAVE THEM TRAPPED IN SHORT POSITIONS!!!
They literally told us how to beat them at the market game.
How do we beat and humiliate Wall Street?
Let's fuk these fuckers who have humiliated and shamed us for not being educated like them over their GME manipulation while they're investing billions of dollars (maybe trillions) based on star charts.
As MarketWatch told us, it's the Age of Aquarius. And we're currently under Aquarius Zodiac sign. Something else I found out while researching for this post is that the Aquarius Zodiac is ruled by Saturn and Uranus. So let's ride a rocket together. Let's say/protest market cheating as a community and tell Wall Street: "it's Aquarius (which you know better than us because you're about fundies, not tendies), so we decided to ride a diamond hands rocket past Saturn and straight to Uranus."
Here's the small cap stock we can do this with:
Aquarius AI INC
As SEC chairman Harvey Pitt told us to do, I'm pretty sure this stock is complete garbage. I bought some because I'm an idiot. I literally bought this stock because I want to tell Wall Street "I rode an Aquarius rocket to Uranus, I fucked, then I rode the rocket back to earth.
That's the main reason I like the stock. Why else, though:

1. Aquarius AI has AI in their name. This is definitely a stupid reason to like and buy this stock, but I made a few grand on Dogecoin stalking Papa Elon's Twitter, and he's so into AI that I think he's a robot. So this is for Elon.
2. Aquarius AI is involved in E-Sports Betting. Here's an article about it:

https://www.aquariusai.ca/aquarius-ai-announces-transition-into-esports-betting-management-changes-private-placement-financing-and-proposed-shares-for-debt-transaction-2/
So this is definitely stupid because Wall Street told me liking GME with diamond hands is a dumb ape strategy (which it says in their star charts), but DraftKings made huge Super Bowl money, E-Sports is getting bigger and bigger, and Aquarius AI being involved in E-Sports Betting means it fits with my love (and future consumer spending habits) that are fixated on GameStop. Also, I'm on Reddit and play video games and Wall Street mocked me for that. In fact, I didn't even know I could bet on E-Sports!!! Fuck buying my wife's boyfriend more stamina crackers. I'm betting on Starcraft. So this is for elite video game players and GameStop.
3) Aquarius AI trades on the OTC. Why is that important? Because it's very uncommon for an OTC stock to get shorted, so it's largely outside the schemes Wall Street conspired with to cheat us out of GME tendies.
4) The CEO of Aquarius AI has crazy eyes. That's probably a stupider reason to invest than Trump's horoscope like that hedge fund manager in the Bloomberg article, right?
5) Aquarius AI trades for $0.07 right now, there are only 22.3M outstanding shares, and the market cap is only $1.5M. That's way easier to rocket with a PHD-H community investment strategy than Signal did after Elon's tweet. WAY EASIER!!! And this is also a totally stupid reason to invest in this garbage stock, but that makes it easier to ride an Aquarius rocket to Uranus, then back to Earth. And that sounds fun.
6) Also, I have diamond hands. I want to see how much I lose after the Aquarius AI peak so we can extrapolate real market research about the impact of turning of demand side for GME to halt price momentum. That's such a stupid idea it isn't even regulated because no one smart enough to regulate the markets has ever been stupid enough to want to do that. So... is it stupid to invest in a garbage stock to get less stupid? Definitely. You'd be stupid to invest. Are you stupid? I am.
7) Also, I just like the stock.
Apes, let's rocket the fuck out of Aquarius AI INC and mock these hedge fund cheaters. It's legal. And it's a legitimate protest. And I want us to be able to look back at this moment and say, "Diamond hands, Wall Street. You fucked us on GME. But we rode an Aquarius AI Rocket straight to Uranus, then we rode it back home, you astrology fundamental fucks."
Who's with me? I'm in. I'm staying in. Diamond Hands. It won't take many of us.
p.s. I know some of you apes will go full paper hands and jump off the Aquarius AI rocket at Mars, or wherever. But whatever. I'madvocating you be stupid enough to not profit from this Pump and Hold strategy about this garbage stock I like that I'm not selling. But if you're less stupid than that, I implore you to be so stupid that you reinvest you're Aquarius AI rocket tendies back in GME, for totally stupid reasons, like you just want to.

I have a new account and I don't know if this will post but this is my summary about the whole GME situation. Removing all the hype and all the myths, this is what actually went down.
I think there is so much spin on the whole situation and I want to present my view of what happened.
First of all, I'm going to explain what wallstreetbets was all about prior to GME.
Wallstreetbets is a subreddit that was originally meant for "investors" who liked to take big financial risks with the stock market. These risks were sometimes taken for fun and sometimes taken in the hopes of getting lucky and getting a massive return on investment in as short a time period as possible. The user base prior to the massive influx was actually made up of somewhat experienced investors who understood the market and the risks they were taking. Yes, they called themselves and each other autistic and retarded. But that was actually really far from the truth. The reason they called each other retards is because when you're posting information about stocks you always have to explain, for legal reasons, that you're not a financial advisor. If you are a financial advisor it's actually illegal to post that information. But the community has a certain self satirizing sense of humour. As a result, some users would say that their advice shouldn't be trusted because they are not qualified to be financial advisors because they are retarded and eat crayons or whatever else they could come up with to be funny. It was also a way to ironically justify some of the gambles they were taking because they knew they were being reckless with their portfolios. If someone was making a decision with an investment where they had a 90% chance of losing all their money and a 10% chance of doubling their value, they would justify going through with it by saying they were autistic or they were so dumb they accidentally hit the buy button. They had a similar sense of humour and used to call the moderators and each other gay. This was not due to homophobia but because the joke was that if you were constantly making decisions which would result in massive financial losses you could only possibly doing it because you like to get fucked.
Sometimes they would help each other out by posting research they had done on stocks that they thought were undervalued or had a potential to increase in value over a short period of time for numerous different reasons.
Wallstreetbets was never meant to be any kind of movement. It was just a subreddit for people who enjoyed taking chances and more often than not lost copious amounts of money.
They even had flairs for posting losses and gains. More often than not, losses. It was more about posting massive losses for shock value or posting gains to brag. They called the losses "loss porn". It was just a way of sharing what they were doing and just getting attention and feeling better about the losses.
So where does Game Stop (GME) come in to the picture?
Sometimes users of the subreddit would post due diligence that was actually really well thought out. Some users had done some research on Game Stop and realized that the shares were undervalued. They weren't expecting what happened at all, at least not initially. The original thinking was that GME was undervalued because, unlike similar companies which had declined such as Blockbuster, the company still has the potential to turn around and increase their revenue as they had capitol and infrastructure and could very easily turn around their business model. They could move away from physical copies of games and physical merchandise and move into esports and online sales. The fact this could happen had been overlooked and as a result there was a chance to get a large return by investing before any such changes were announced and selling after the stock shot up or by holding long as the company gradually improved its earnings.
Quite a few users bought in to GME long before there was a massive uptick in the value of the stock.
Here's where the hedge funds come in to play. Quite a few investors and hedge funds had shorted GME the same way they had shorted Blockbuster. Shorting is slang for short selling. Which is a process where investors borrow shares from a brokerage and sell them immediately hoping they can buy back the shares at a lower price.
To simplify it, let's say you borrowed a share for $10. You now owe the broker $10. But you also sell the share for $10 so your debt is covered. Later, when the value has dropped you buy the share back for $2. So the share you borrowed is now worth less but you only owe the brokerage $2 as you didn't borrow cash but the value of the share. So you only owe the brokerage $2. So you pay the brokerage back $2 and you pocket the $8 that the share decreased in value from the time you borrowed it until the time you sold it back to the brokerage. There is a time limit on the borrowed share as well. The brokerage expects it to be sold back within a reasonable amount of time depending on the agreement.
So short selling is basically a bet that a shares value will decline and you profit by the amount the shares value declines.
Because everyone thought GME would decline in value over time lots of investors and hedge funds thought it was a safe bet to short GME because everyone thought the company would go out of business like Blockbuster not taking in to account the subtle differences between the two companies and that there were hidden ways GME could turn around and become a more profitable company again.
And now I'm going to skip ahead to explain what happened next.
There were some news about changes to the company and some of those changes indicated that the company would turn around. The news increased the value of the shares somewhat. This wasn't initially as big of a deal. However the shares continued to gain value long enough that shorting the stock was no longer a profitable move and was resulting in major losses.
Going back to the example before, if you borrowed a share for $10 and sold it and it was now worth $20 your only option would be to close your position once your time window is up. Closing your position means buying back the share for its current value and returning it to the brokerage. So you would be forced to take a loss of $10. Unlike with shares there is an unlimited potential for losses when you short sell. The more the stock grows in value the more money you lose.
Since the company was turning around many short sellers were forced to close their positions.
What are fundamentals? Fundamentals basically means what the actual value of a stock should be based on a businesses performance and ability to generate revenue. This definition will matter in a moment.
The value of a shorted stock suddenly increasing can result in what's known as a short squeeze. A short squeeze is when the value of a stock suddenly increases and the shorts are forced to close their positions as soon as possible to minimize their losses. The more the stock goes up, the more a short seller loses.
But with stocks the supply and demand can also play a role in their value. This is why the value of Gamestop shares suddenly skyrocketed at first.
To close their positions the short sellers all had to buy back stock at the same time and return it to the brokers. This created an artificially increased demand. It's a temporary increase which is basically a bubble caused by the shorts closing their positions.
Because GME was basically the most heavily shorted stock ever the value increased drastically.
Contrary to popular opinion, this is actually where Reddit played the biggest role in what happened next.
Some of the users of Wallstreetbets were now posting about their massive gains and the public caught wind of what was happening. Everyone saw the stock going up and saw an opportunity to buy in. This is a newer phenomenon. It's colloquially referred to as a meme stock. The public attention increased the demand. Everyone wanted in on the gains. So at the same time that the shorts started closing their positions everyone started buying in. This created more demand and the stock bubbled.
In case you don't know what a bubble is, it just means that the value of the stock is increasing due to heavy demand and interest and not due to the fact that the business is increasing as much in value. When a bubble happens there will always be an eventual correction. Either gradual or sudden depending on the specifics. The correction will return the value of the stock back down to a reasonable amount based on the businesses actual performance and not based on the hype.
So now there was a perfect storm of the shorts closing their positions and many investors buying in hoping to sell the stock once it peaked before its value dropped back down once the buying frenzy stopped.
So, essentially, the GME phenomenon was a meme stock meeting a short squeeze.
The sad part about this whole thing is how many people who didn't know enough about how the market works just thought it was an opportunity to make massive amounts of money in a short period of time. They didn't know what risk they were taking or when the window of opportunity would close.
The hype really didn't help. Lots of different interests were hyping the stock online. This is where the real market manipulation occurred. People who had bought in to the stock knew that the more people bought in the more their shares would increase in value. In addition the short sellers knew that the less people bought in the less they would lose.
This created strong polarization about the situation both online and in the media. And it became impossible for someone who didn't have at least an intermediate understanding of the stock market to discern the hype and misinformation from the reality.
What happened was that there was a lot of buying from retail investors fuelled by online misinformation or lack of knowledge and all the shorts trying to close their positions to minimize losses which created a bubble. The savvy retail investors sold their stock at or near the peak of the bubble and made a killing with return rates of about 1,700% while everyone else lost money.
The lesson learned here is not to believe online hype and information from online sources or even the media if there is a strong conflict of interest.
Anything else you may have heard about the situation is being spun and is fictitious.
There was no rally to try to take out the hedge funds. That was an incidental side effect of what happened. Although that narrative definitely encouraged more people to buy and hold, making the bubble bigger and also creating the demand needed for those selling to be able to cut their losses or earn their gains by selling the stock.
There was no big conspiracy by hedge funds to try to destroy Game Stop although that narrative definitely encouraged those with nostalgia for the business to buy in.
The biggest problem with this is how online narrative turned into a form of market manipulation and how both sides, retail and hedge funds, were manipulating online discussion and even the media to try to maximize their gains or reduce their losses.
There was no silver squeeze either. That was paid advertising by the hedge funds to get people to buy silver to try to shift the buying away from GME and into silver to reduce their losses while realizing short term gains in silver.
There's only one story here. A short squeeze met a meme stock. Any other narrative is either disinformation, confusion or wishful thinking.
The end.
I know I'm going to be hated for this post and I expect to be downvoted into oblivion. But I don't care. I just want people to see what actually happened so that we don't all make the same mistakes and lose money.
Disclosure: I am not a financial advisor and I did briefly own some GME shares to try to take advantage of the volatility and lost about $20.
I hope this clears up a lot of the confusion for anyone trying to understand the GME phenomenon.