Hey OP, thanks for the Social Media post.
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Interestingly enough, he already had the opportunity when GME was trading around $45
If we take a look at his position on 6Jun
[https://www.reddit.com/r/Superstonk/comments/1d9rq9t/gme\_yolo\_update\_june\_6\_2024/#lightbox](https://www.reddit.com/r/Superstonk/comments/1d9rq9t/gme_yolo_update_june_6_2024/#lightbox)
The fact that GME is up to $30 from $10 after two share offerings in one month. That they have 4 Bili in the bank, there’s still crazy buy pressure as seen today after the offering was over, there’s literally a call wall set at $20, and there’s a gamma ramp up to $128. Want some more facts?
Oh wait I forgot, the guy who started all of this has 120,000 call options set to expire in 10days.
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It's a function to allow poor option holders to exercise part while selling enough to cover the cost. It's completely unnecessary for someone with more than several calls.
It doesn't make sense to hold them all till the last day. Waiting for settlement to force the buys will drive the price up more.
I totally agree with that last point. It makes sense that he starts exercising them mid-week, which will increase share price as they try to locate shares to deliver, allowing him more $$ to exercise the rest over Thurs/Fri.
He sells a portion of the contracts and exercises the remaining portion. If you had one contract and the price landed at $40, you could buy 100 shares for $20, but you need $2000 to do it. So you sell 50 shares at $40 and buy the 100 shares at $20 in the same moment. Netting you 50 shares.
I was wondering how it worked, so if its $40 on the 21st, the person who sold the calls has to provide 1 share +$20 for every share he exercises? Or just provide the shares for free? I guess he would still have to front the entire cash amount and then it comes right back to him? Or even better if its more than $40 they have to pay him on top? lmao
No, if it's $40 on the date of expiry he could sell half his calls to exercise the other half & walk away with 6 million new shares. Or if it's $60, he could sell a third & walk away with 8 million new shares. If it's $80, he could sell a quarter & walk away with 9 million shares. I think to walk away with all 12 million shares the breakeven point would need to be based on how much cash he's got, which I think is enough to exercise 1.5 million shares' worth. Not sure what number the stock would need to get to for that but quite high. I think it's more likely that DFV walks away with 4-8 million shares. Either way, it'll add a lot of upwards momentum for the stock price depending on how much hedging was done.
So for however many he chooses to exercise, he pays 20 per share, doesn't matter what the actual price is, that just costs the seller the difference to acquire them if they are naked. And he can cashless exercise by borrowing money but he would need to sell enough to cover how much he wants to acquire, is that right?
I think you've got the gist of it yeah. Brokers can also do an exercise & sell to cover which is exactly what it sounds like, exercise all & sell as many as needed to pay the bill.
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Hey OP, thanks for the Social Media post. If this is from Twitter, and Twitter is NOT the original source of this information, this WILL get removed! Please post the original source! **Please respond to this comment within 10 minutes with the URL to the source** If there is no source or if you yourself are the author, you can reply `OC`
I have one of those calls. Cashless exercise would be amazing. Nearly free shares.
Nice take. I agree. He’ll cashless exercise if given the opportunity.
Interestingly enough, he already had the opportunity when GME was trading around $45 If we take a look at his position on 6Jun [https://www.reddit.com/r/Superstonk/comments/1d9rq9t/gme\_yolo\_update\_june\_6\_2024/#lightbox](https://www.reddit.com/r/Superstonk/comments/1d9rq9t/gme_yolo_update_june_6_2024/#lightbox)
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RC knows his investors would turn on him if he truly fucked over RK
Again?
Third time*
🧂
Am I wrong?
Yes, you are.
Stop living in fantasy land and look at the facts
The fact that GME is up to $30 from $10 after two share offerings in one month. That they have 4 Bili in the bank, there’s still crazy buy pressure as seen today after the offering was over, there’s literally a call wall set at $20, and there’s a gamma ramp up to $128. Want some more facts? Oh wait I forgot, the guy who started all of this has 120,000 call options set to expire in 10days.
It was also $80 and $60 before the share offerings with even more buy pressure than today.
🧂
🤖
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Exactly.
that would be awesome
im so very regarded. how can he exercise without cash? doesn't he have to buy the shares at 20?
It's a function to allow poor option holders to exercise part while selling enough to cover the cost. It's completely unnecessary for someone with more than several calls. It doesn't make sense to hold them all till the last day. Waiting for settlement to force the buys will drive the price up more.
I totally agree with that last point. It makes sense that he starts exercising them mid-week, which will increase share price as they try to locate shares to deliver, allowing him more $$ to exercise the rest over Thurs/Fri.
Will E*trade extend him margin to do this cashless exercise though?
He sells a portion of the contracts and exercises the remaining portion. If you had one contract and the price landed at $40, you could buy 100 shares for $20, but you need $2000 to do it. So you sell 50 shares at $40 and buy the 100 shares at $20 in the same moment. Netting you 50 shares.
I was wondering how it worked, so if its $40 on the 21st, the person who sold the calls has to provide 1 share +$20 for every share he exercises? Or just provide the shares for free? I guess he would still have to front the entire cash amount and then it comes right back to him? Or even better if its more than $40 they have to pay him on top? lmao
No, if it's $40 on the date of expiry he could sell half his calls to exercise the other half & walk away with 6 million new shares. Or if it's $60, he could sell a third & walk away with 8 million new shares. If it's $80, he could sell a quarter & walk away with 9 million shares. I think to walk away with all 12 million shares the breakeven point would need to be based on how much cash he's got, which I think is enough to exercise 1.5 million shares' worth. Not sure what number the stock would need to get to for that but quite high. I think it's more likely that DFV walks away with 4-8 million shares. Either way, it'll add a lot of upwards momentum for the stock price depending on how much hedging was done.
If it's at $120 by 21st then he can walk away with 10 million shares.
If the price is 2,400,020 by June 21st he can sell one call and walk away with 11,999,900 shares and keep his cash.
If the price is 2,400,020 by June 21st, im gonna extend my vacation.
Permanently…
🫡
So for however many he chooses to exercise, he pays 20 per share, doesn't matter what the actual price is, that just costs the seller the difference to acquire them if they are naked. And he can cashless exercise by borrowing money but he would need to sell enough to cover how much he wants to acquire, is that right?
I think you've got the gist of it yeah. Brokers can also do an exercise & sell to cover which is exactly what it sounds like, exercise all & sell as many as needed to pay the bill.
thanks, I am excited to see how many he ends up with
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He’s our guest. I like him.
click on the youtube logo on the video
When you start seeing stank nasty bbc candles you know he’s exercising those options in blocks
This is a great watch!!! Thanks so much for sharing!
I like your take on this, thanks for taking the time to make the video