What's going on moon gang, i hope that you're having a good one in this video, i want to talk about what is the best way to get a stock to shoot straight to the moon. Should we be buying shares of the company, or should we be buying options? On top of that, i also want to share a few quick thoughts of short volume data and make sure you stick around into the end, because i'll be going over the most up-to-date and recent short interest numbers for both amc and gamestop. Just for a little bit of basis on this video, i'm currently filming it on sunday april 18th and as of now amc is trading at 9.36 cents, while gamestop aka gme is trading at 161.. All right.

So, let's talk about the absolute best way to get a stock shoot straight to the moon for the purpose of this discussion, let's get a little bit of terminology out of the way, a short squeeze. If you check it out, google, it investopedia. Basically, what it's going to tell you is a short squeeze is when there's a lot of people, betting against a stock, and their prediction is wrong and in turns there's a lot of other people buying the stock, and it ends up going upward. The people who were betting against it, they eventually hit the risk, tolerance, so they're forced to cover their position and mechanically.

When you cover your position, if you're short, that means that you actually have to buy stock and thus that's adding more buying pressure causing the stock to go up a bit more eventually, this could cause other shorts to hit their risk tolerance, and you can see how This snowball is out of hand. On the other hand, we've also heard the term a gamma squeeze. This relates a bit more to the options market. Basically, it's when there's quite a few out of the money call options and someone buys quite a few out of the money, call options.

And then the stock ends up trending upward, which means that they go from out of the money to end the money and these market makers, the people who originally sold the call options. Basically it's a term referred to as like delta hedging, their delta exposure. Basically, it's a fancy term that these market makers need to protect their own risk protect their own, but because there might be a lot of people who choose to exercise the call options. So, as all these call options go from out of the money to in the money and forces market makers to buy the underlying stock, which adds more buying pressure, and thus that could help more out of the money go in the money.

It's another snowballing thing that eventually drives the stock upward. You have a short squeeze and a gamma squeeze both cause a stock to go upward, and i don't have the exact stats on it, but i would be willing to wager that they commonly play into each other. A gamma squeeze can play into a short squeeze. The short squeeze can play into a gamma squeeze and vice versa, but the end result is that one relates to stocks.

One relates to options and they both have the effect of driving the under the stock or the underlying stock sky high. We also have to talk about two other axioms, and then i think i have an analogy that could better explain this whole situation and kind of share my opinion on, like which one is quote: unquote better to do but um in terms of these two other axioms. If you buy a stock at that moment in time, you are adding buying pressure, helping it go up on by like, on the flip side, if you sell a stock um you're, adding to the selling pressure and you're helping driving driving it down. The same cannot be said about the options market if we were to live in a vacuum and uh, that's a very important caveat.

So if you were to buy a call, sell a call, buy a put, sell, put you're not directly impacting uh the current price of the the stock that this derivative options are all derivatives that this derivative is based on now i said if we lived in a Vacuum that would be true, but so mechanically, if you buy any option, sell any option: you're not impacting the stock, but there is a scenario and because all this options, data is public, for example, amc trading at 9.36 cents and for some reason we saw whales coming In and just buying as many call options as they could at 10 11 12 for whatever expiration date, it does have a psychological impact of like well, hey, that's a lot of money. Maybe they know something that we don't, so i want to buy cautions or maybe i don't want to deal with theta decay or options in general, so it causes me to buy the underlying stock. So, like many things in the stock market, the argument is a lot more complex and there's multiple layers to it. But in the end we don't live in a vacuum, so it does have that impact, and i think this analogy might do a better job at explaining the whole scenario um.

So let's say that a gigantic fire is equivalent to a stock going sky high going to the moon past the moon. That's the end result so we're looking for a gigantic fire. I would say that, in this scenario, buying options specifically out of the money call options is equivalent to gasoline while buying stock is the match. As you can see, you can see where i'm going with this - that, if you just have gasoline and no fire at all you're not going to get anywhere, but on the flip side there is an argument that all if you just have a match, yeah.

Of course, you can make a giant fire, but it's way way easier and you'll. Do it way more rapidly, if you also have gasoline. So in my opinion, i think that there is no oh, like this one's better than this one. I honestly truly believe that they play off of each other and you kind of need a combo of the two um.

Once again, these are just my own opinions, i'm in no way financial advisor. Please do your own due diligence on this whole situation, but just to my understanding of the stock market of the options market they play into each other, and all of us are in amc and gamestop for the whole concept of them. Going as high as possible and with that um, i truly truly believe that we're going to need some sort of combination of the two. I don't think that one is better than the other, but in that scenario just remember buying stocks is the match.

Buying options is the gasoline and the end result. We just want a gigantic fire, so that's my thoughts on what's better for of how to actually get a stock to squeeze. I think we need a combo of the two, and now i i saw a little bit of discussion about going on with short volume. This is on fintel a lot of people like to look at the short volume.

I just wanted to give a little bit of caution about using this as a data point it is commonly considered to be, i guess, quote, unquote dirty data, so, for example, on friday the 16th amc there were, it had a training volume of just over 40 million And 15 million of that was short volume. This is due to dirty data and a little bit misleading, because we don't know what percentage of these 15 million shorts were legitimate shorts because we live in a world now, where a lot of liquidity is provided by high frequency training, for example, if you were trying To sell amc, a share of amc at 10, a high frequency trading algorithm - and i mean these things - fire in nanoseconds, milliseconds, very, very fast. They might see that order. They might see that someone else is in at 1001, so they might short at 1001 and then buy your share at 10., so they're they're really just providing liquidity um.

This honestly could deserve a video of its own, but basically i i would argue that it's not really bullish, it's not really bearish, they just provide liquidity and they are a decent they're. A non-zero percentage number uh portion of this overall number. So with that, we don't know how out of this 50 million, we don't know how much of it is just high frequency traders providing liquidity versus like legitimate shorts and actual hedge funds say no. I want to short whatever 1 million and because of that, like i'm gon na swing, it i'm going to short it and we hold.

We just don't know the percentage, and i honestly it probably switches per day and that's why. I think short volume data is a little bit misleading and that's why, if i'm personally trying to track the short interest or really what's going on, how is it trending? I think the shares on loan is probably the most valuable data we can use in this situation, which actually brings me right into the current numbers going on. Let's kick it off with amc, so on friday april 16th, the short entrance like once again, another record high amc's, went up by 1.43 and the estimated short interest is 22.5. So when i was talking about like the best data point um, this is where we need to talk about utilization and shares on loan.

Remember amc has a free flow as in the shares that you and i can trade of about 400 million shares. As of now, it was 145 145 million heading into friday, but, as you can see here, um two million more were borrowed. So that means on loan and remember on loan doesn't mean that they're definitively short betting against the market. But you don't really pay a borrow fee without shorting it.

So i would say a high high percentage of these are actually short on the market and then utilization is just a percentage. The max value is 100, it's how many are willing to be lent and then how many are actually borrowed and taken on loan. So out of that pool out of the entire pool of ones that are willing to be lent about 99 starting off on friday, were taken and were actually on loan, and then i would assume we're either at 99 point something or 100 we've almost maxed this out. These are sky high, so not only are the numbers trending upward they've been incredibly trending upward ever since thursday march 18th and we're just continually breaking the previous day's record.

The amount of money and shares betting against amc is, to put it blatantly, is the highest we've ever seen it sky high. So remember, even with that, in my coming back to my examples of a short squeeze and a gamma squeeze, all the people are betting against. It and now we're at the situation where we need some bullish follow-through in the price action to capture these shorts, which could lead to a short squeeze, and then that can lead to a gamma squeeze which could lead to a bigger short squeeze. That's the scenario we're currently in, but right now, um an extra 2 million, so i would estimate were somewhere around at least 147 million shares on loan on amc that could be betting against the company in terms of gamestop.

Friday was an incredible day. The short interest actually went up by 4.24, the current estimated short interest is 26 and the borrow change went up by about half a million the the shares the free float. The shares that you and i could trade for gamestop is around 45 million. It's it's actually.

Almost a tenth of amc's, it's a lower float company um. So the shares on loan right now is roughly 14 million. If we were to add these two together and the utilization is almost a third of amc's, it's 31. So that's just a situation in the the pool of shares that, like people are willing to lend out, only a third of them are actually being borrowed by most likely some other hedge fund.

That's how you can interpret this data, but it also shows the importance of why you need all three. You need the utilization number. You need the shares on loan number and then obviously we all care about the short interest. So um all three are kind of a piece of the puzzle that tells you the entire story um.

So that's. What's going on with the short interest numbers for both gamestop amc we kind of went over on. I just want to caution you on using the short volume data that data it's just kind of dirty um, it's dirty, it's not as straightforward as it seems, and then we obviously also talked about the main thing this video of. Should you be buying shares or options.

I would argue that um, a combination of the two is most beneficial for getting a stock to go absolutely to the moon. I didn't plan on talking about this, but i just want to interject one little thing: um, something that i'm seeing on youtube. Reddit and twitter is this argument of um x is a distraction from y um. My opinion on that is uh.

Just i don't agree in the sense that, like we're in a scenario where maybe y isn't moving at all and x is so, why not try to make money off of x and then that'll give you more firepower more ammo to get into y to get y To move in the direction that you want it to um, the name of the game is to get these things to move and if they're not moving one of the best ways to get it to move, is you just need more firepower, so, if x can give You more firepower. I think it would be a bit silly to not take advantage of that opportunity, but once again, these are just my own opinions uh for this entire video. I do implore you to do your own due diligence, your own research, because i'm in no way a financial advisor. If you enjoyed this video, i would really really appreciate it if you could help me out with the youtube algorithm by leaving a comment dropping like and most importantly, hitting that subscribe button.

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