$tsla every few months will undergo an “infinity” call gamma squeeze that will keep pumping the stock up.

There’s been some talk on Twitter about this if you just like search tesla gamma, squeeze, etc. so I’m not the only one to observe this.

Someone starts by buying way OTM calls > force market makers to buy stock to hedge calls initially, which moves it only a bit up > release good news > force algos who trade news to buy stock > the original OTM calls are now closer to ATM > due to gamma...

market makers have to buy more stock > after seeing the initial move, now retail is piling into calls too due to FOMO > shorts are buying back stock & hedging with calls > causes market makers to now desperately buy more stocks to hedge > cycle repeats > stock price goes upward.

Obvs this won’t work if you don’t have good news to release but Elon always does. This doesn’t work if no retail help you buy more calls, but everyone here will FOMO. Just go to wsb and check out the posts. This doesn’t work if there weren’t so many shorts in Tesla but there...

always will be who have to manage risk. This wont work if some big find offloads Tesla shares as it goes up, but most are holding, including Elon. This doesn’t work if SPY tanks either due to beta, but SPY just goes up too on average.

Once the calls expire, the stock price won’t drop since it erases all downside gamma. Then you repeat this every few months. This is how you can get a stock easily to go higher. Now who’s the initial call buyers? No idea. It could even be Elon himself or insider buying

This is what Porsche did with Volkswagen to cause the squeeze. Porsche loaded up on the calls first and then released their “news”

This got me thinking the way Elon is taunting the shorts & SEC could mean he knows what’s happening too. The thing is, since all the initial person is doing is buying calls, he’s not doing anything bad. It’s not his fault that people then FOMO...

market makes them rush to delta hedge, and shorts continue the call buying + share covering. The initial call buys may have started the chain, but the rest is set in motion by everyone else. this means you actually can’t short Tesla. It’s just strictly -Expected value to do so.

I bet you if you take a graph of SPY and Tesla side by side, on almost all days in which Tesla actually dropped, SPY probably dropped that day too. But there were days in which SPY probably barely went up but a Tesla shot up a a lot

So if you short Tesla, you would be strictly better off shorting SPY. Shorting Tesla also means paying a much higher IV in put options too and having more upside risk in short shares.

The other way a short can win on Tesla is some bad news, but can you really time that greater than the times you keep buying puts???

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