I expect a run up this week. The fuse has been lit. Don't mistake AMC with BBBY/RDBX. I started seeing AMC/GME more as crypto than regular stock. Very volatile, meme-bound securities in which hedge funds have been trapped in. 600m USD to boost spreadsheets? Yes, Kenny G is back at it again. They are stalling the margin call.
For those who don't understand what a margin call is. Let me explain it very 'shortly' lol.
Hedge fund borrows 100 shares of AMC for short purposes. They sell the shares because they expect the price to plummet. Later they buy the share back for a cheaper price, return the 100 shares and keep the profit.
IF however the price start to rise, things look different. I bet we have all blown up a trading account. Well, if price soars, these hedge funds can be liquidated. That means an automatic buy-back is triggered to return the shares to the original owner. This buy-back doesnt know price. This buy-back of shares is automatically buying back every shares that is available at that time, until they returned the shares.
It's AUTOMATIC. 1 share at 10.000$? Bought! 400 shares at 10.001$? Bought! 10 shares at 1.000.000$? Bought, if there are no other shares available at that particular moment. Even if there are shares for 1 Billion $, they are being bought back regardless.
Of course, no one is going to wait this long. That's why 1000$, 2000$ is easily achievable. Heck, even 10k at some point is easily possible. Not everyone is going to sell up there. Just be happy with what you walk away with, but don't fumble the bag. Prepare an exit strategy that makes sense for YOU. Set your prices and go live your life. Don't beat yourself up over money lost. Don't lose your head over money made.
Stay calm. Stay zen.
For those who don't understand what a margin call is. Let me explain it very 'shortly' lol.
Hedge fund borrows 100 shares of AMC for short purposes. They sell the shares because they expect the price to plummet. Later they buy the share back for a cheaper price, return the 100 shares and keep the profit.
IF however the price start to rise, things look different. I bet we have all blown up a trading account. Well, if price soars, these hedge funds can be liquidated. That means an automatic buy-back is triggered to return the shares to the original owner. This buy-back doesnt know price. This buy-back of shares is automatically buying back every shares that is available at that time, until they returned the shares.
It's AUTOMATIC. 1 share at 10.000$? Bought! 400 shares at 10.001$? Bought! 10 shares at 1.000.000$? Bought, if there are no other shares available at that particular moment. Even if there are shares for 1 Billion $, they are being bought back regardless.
Of course, no one is going to wait this long. That's why 1000$, 2000$ is easily achievable. Heck, even 10k at some point is easily possible. Not everyone is going to sell up there. Just be happy with what you walk away with, but don't fumble the bag. Prepare an exit strategy that makes sense for YOU. Set your prices and go live your life. Don't beat yourself up over money lost. Don't lose your head over money made.
Stay calm. Stay zen.
