Max Pain or Short squeeze?
Updated
This is a guide to the common options trading phenomenon with a real-world example:
What Is a Short Squeeze?
A short squeeze is an unusual condition that triggers rapidly rising prices in a stock or other tradeable security. For a short squeeze to occur the security must have an unusual degree of short-sellers holding positions in it. The short squeeze begins when the price jumps higher unexpectedly. The condition plays out as a significant measure of the short sellers coincidentally decide to cut losses and exit their positions.
What Is Max Pain?
Max pain, or the max pain price, is the strike price with the most open options contracts (i.e., puts and calls), and it is the price at which the stock would cause financial losses for the largest number of option holders at expiration.
The term max pain stems from the maximum pain theory, which states that most traders who buy and hold options contracts until expiration will lose money.
What Is Quadruple Witching?
Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. While stock options contracts and index options expire on the third Friday of every month, all four asset classes expire simultaneously on the third Friday of March, June, September, and December.
Quadruple witching is similar to the triple witching dates, when three out of the four markets expire at the same time, or double witching, when two markets out of the four markets expire at the same time.
Triple/Quadruple Witching Dates 2021:
March 19, 2021
June 18, 2021
September 17, 2021
December 17, 2021
Short Interest: 16.72: 85.84 Million shares
Ownership: 381.8 M (74.25) general public, 131 M (25.4%) Institutional, 99.65%
Those who shorted the stock will be in big trouble soon if they have not covered their shorts yet!
September 17, 2021
Total OI: 673,725
Put Call Ratio: 1.0929
Put OI:351,811
Call OI: 321,914
Highest Put: 15
Highest Call:145
Max Pain: 30
AMC is ranked 10th on WSB and experienced a +483% increase on daily mentions..!
What do you think is going to happen in the next 3 weeks? another short squeeze or max pain???
write a comment about your opinion
Reference Article:
1- Short Squeez:
https://www.investopedia.com/terms/s/shortsqueeze.asp
2- Max Pain:
https://www.investopedia.com/terms/m/maxpain.asp
3- Quadruple Witching
https://www.investopedia.com/terms/q/quadruplewitching.asp
4-Essential Options Trading Guide:
https://www.investopedia.com/options-basics-tutorial-4583012
What Is a Short Squeeze?
A short squeeze is an unusual condition that triggers rapidly rising prices in a stock or other tradeable security. For a short squeeze to occur the security must have an unusual degree of short-sellers holding positions in it. The short squeeze begins when the price jumps higher unexpectedly. The condition plays out as a significant measure of the short sellers coincidentally decide to cut losses and exit their positions.
What Is Max Pain?
Max pain, or the max pain price, is the strike price with the most open options contracts (i.e., puts and calls), and it is the price at which the stock would cause financial losses for the largest number of option holders at expiration.
The term max pain stems from the maximum pain theory, which states that most traders who buy and hold options contracts until expiration will lose money.
What Is Quadruple Witching?
Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. While stock options contracts and index options expire on the third Friday of every month, all four asset classes expire simultaneously on the third Friday of March, June, September, and December.
Quadruple witching is similar to the triple witching dates, when three out of the four markets expire at the same time, or double witching, when two markets out of the four markets expire at the same time.
Triple/Quadruple Witching Dates 2021:
March 19, 2021
June 18, 2021
September 17, 2021
December 17, 2021
Short Interest: 16.72: 85.84 Million shares
Ownership: 381.8 M (74.25) general public, 131 M (25.4%) Institutional, 99.65%
Those who shorted the stock will be in big trouble soon if they have not covered their shorts yet!
September 17, 2021
Total OI: 673,725
Put Call Ratio: 1.0929
Put OI:351,811
Call OI: 321,914
Highest Put: 15
Highest Call:145
Max Pain: 30
AMC is ranked 10th on WSB and experienced a +483% increase on daily mentions..!
What do you think is going to happen in the next 3 weeks? another short squeeze or max pain???
write a comment about your opinion
Reference Article:
1- Short Squeez:
https://www.investopedia.com/terms/s/shortsqueeze.asp
2- Max Pain:
https://www.investopedia.com/terms/m/maxpain.asp
3- Quadruple Witching
https://www.investopedia.com/terms/q/quadruplewitching.asp
4-Essential Options Trading Guide:
https://www.investopedia.com/options-basics-tutorial-4583012
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