Uh last week was pretty crazy. My last video – i was actually talking about how you know getting into gme was pretty risky, but i then eventually right after shooting that video changed my mind, dumped five grand in and then made you know. Thirty thousand dollars so uh let’s, actually just jump into that really quick now, so gamestop really is the gift that keeps on giving uh. Last week we saw the share price. Go from you know all the way down in the 30s. All the way up to, i think, at a peak of what 67 70 dollars um before that actually didn’t own any shares of gamestop right. So, as of a week ago, i shot that last video i was talking about how risk is tied to reward which it is and that anybody who was playing into this game uh just needs to keep in mind that you know these things don’t play out in A linear fashion, there’s going to be a ton of volatility. If you have paper hands, if, if you’re afraid of losing the money, that you’re investing in uh maybe stay out, but then what i ended up doing is, if i scroll to the top of my robin hood right now, and we look at these uh gamestop ‘ Call options that expire this friday january 29th uh. You can see that i bought 10 contracts with an average cost of 4.85 cents and i’m up uh what twenty one thousand dollars: uh.
800 uh. 21. 850 right. So immediately after that, i was like you know what it i’ll throw some money in see what happens made out like a bandit. So, after that, i decided to double down right because now we’re in now we’re having fun we’re having a good time and let’s just see what happens. So after that, i went ahead and bought some 52 calls uh, which i’m up four thousand dollars on as well, and then i went ahead and bought 115 shares of game. Stop as well so i’m in across the board. Uh hedge in shares have some options for that. You know explosive roi on my my cost basis and that pushed my account value. If you look at the total value of my account right uh, i went from what 35 000 uh actually that’s that’s too far. Let’S, go to the one week view force uh, so i was like forty thousand dollars right. Forty thousand dollars is where i started uh before friday. All the way at the top. I was at eighty thousand dollars um at one point. It did cross the eight zero threshold. I can’t exactly get the squiggly line there right now, uh and it fell back down to you know. Seventy thousand i put two grand in, which is why i’m at 71 793 right now right point. Is you can’t win games? You don’t play guys a few people in the comments were like hey, you know just don’t be a for us and i was like all right.
Whatever i won’t be a i’ll play, the game uh got in early and i actually got in pretty late. I should say and made a ton of money, so let’s talk about what actually happened: that’s all fun uh, you know cool got my account to seven thousand dollars i’m, actually hoping to break six figures. This week and you’re probably asking the question: hey: forrest, that’s, it’s, nice. Looking at your account, how do i get mine like that? What can i do uh? What are the next steps? Yada yada, so step? One is go ahead and hit the subscribe button hit the thumbs up button highly appreciate it enough of asking for that. Uh number two is let’s. Describe what happened right so what happened last week was actually a gamma squeeze uh. So a gamma squeeze is in particular just about options. Uh options are really what’s driving all of this activity in gamestop in the first place. So, if you’re not familiar kind of the background on this is that there are some popular short sellers who are basically trying to short game, stop uh when you short stairs you, you have to cover that if you are basically, if your shares are out of the Money right, and what is happening is that there is uh enough retail investors. I should say who are buying shares and you know resisting uh, this price drop as long as well as just a ton of people who were long on gamestop in the first place.
These short sellers are, you know, they’re, not 100, at bat. In the first place, so it’s, you can’t, really say given the size of the retail base, they only own, like a very small percentage of all the total gamestop shares it’s hard to say that they’re, the ones actually driving this, but there is there’s a multiple multitude Of sources that are creating this resistance right, uh and this created a gamma squeeze last friday. This is a ton of people who went super in depth into this uh, but let’s talk about what the greeks are on options right, so you have options. So you have some contract like the one that i bought. The january 29th ‘ call right. It expires on a date there’s, a few things, a few ways that we measure uh options, activity or describe them, and their price right, one is delta delta, is basically the ratio of of if the price of the underlying asset goes up by a dollar. What percentage does the value of this contract go up? So a delta of 0.8 would mean that every dollar that it goes up, it goes up by 80 cents right and then there’s. Something called a gamma. Gamma is the rate of delta right. So think of this. As like speed and acceleration which, if you don’t, understand those this isn’t going to help, but basically delta, is speed and then gamma is acceleration. The change in speed right so gamma is the change in delta.
These things are all loosely connected, so there’s also something called intrinsic volatility. There’S also something called theta. Theta is price decay right, so as options get closer to expiration, they naturally depreciate because there’s less time for them to move uh in whatever direction people want their their bet to play out in right. All of these things are affected by let’s just say each other right, it’s, very complicated, go watch much longer youtube videos, if you want to understand how they work just understand that delta is related to you know what is the ratio between the stock, the stock price And this option price and then gamma is the rate of change in delta and theta is the decay of the value of that option. So what we had is a gamma squeeze. A gamma squeeze is basically um. Think about the the rate of change in delta uh and how that affects speculators right so when people see a ton of activity in a stock that makes them want to jump into this stock right, especially when you have options that are close to experience, because theta Is changing all of these things are hitting near their. You know either one or zero more or less right, they’re going towards their their asymptotes uh i’m – not really asymptote in this case, but they’re going towards these final values. But if you have something that’s, a low volume with a lot of out of the money contracts that need to be covered, you can have a gamma squeeze where the intrinsic volatility is basically much higher.
Suddenly, in the last mile of this options, life span, which changes the greeks, which causes the value to go up, which brings in more speculators right and so then the rate of change gamma increases which which changes delta, which increases the price which brings in more speculators And so the rate of change keeps going up right and you have this squeeze on gamma, as short sellers. In this case i should add specifically in this case people trying to cover their positions, uh they’re buying contracts, and they have to buy them at any price. So the price goes up, which means in speculators, and so they come in to buy more, etc, etc, specifically because these contracts were expiring. You know right on that friday. So what does that mean for you going forward and the impending, as everyone would like to describe it short squeeze a short squeeze, more or less being the fact that there is a large amount of shares, the short interest rate, the number of shares shorted exceeds the Number of of shares out there, which basically says that people have promised to sell shares that they don’t have and their promise is selling more than are out there, which is a problem right. This creates a very easy scenario for people to basically come in and go. Oh so you’re going to have to buy shares and there aren’t enough out there if i just go and scoop some up, you’re going to buy them for me at any price, because you’re going to want to minimize your loss.
The reason this is important is because they bet on the on the on the one side of the the the option chain right: um, where there can be infinite losses, because the price of a security can just go up and up and up and up and up And they’re gon na going to want to hedge their losses. So what that means is they’re going to buy it at any price, which means that people are going to come in and keep buying it buying up shares so that short sellers can’t acquire them which will will force the price up and it’ll just keep creating these. These two fighting forces until all these shares can finally get unloaded. So if you want to get on this, uh there’s two really important things. One. If you haven’t yet go ahead, hit the subscribe button hit. The button help me out. I’Ve only got 129 subscribers. What the uh number two it’s super risky um, you know risk is tied to reward just like i said in my last video. I am not by any means going to encourage or hype anyone up and say you got to do this. You got to get on board that’s, that’s, that’s, terrible, terrible advice. Anybody who’s saying that i think they’re not being real with you. You know i have put my own money at risk. I very well might lose it right. Everybody could be wrong. We might be wrong. The purpose of this video is just to describe what is happening is what i think is likely to happen.
What a lot of other people think is likely to happen does not mean it’s a sure thing. My money is technically at risk, and so is yours. If you put it in um, does that mean it’s a bad play? Not necessarily. I just want to put that disclaimer out there, that anybody saying it’s, a sure thing is lying to you. Risk and reward always go hand in hand, it’s very important to remember that and that’s okay, it doesn’t mean that people who only do high risk stuff are dumb or smart. It just means that they do risk your stuff. So what would you do if you wanted to play right? Let’S say you make the decision that you want to get in on this um. What i would do is probably put a limit order right, so you don’t want to put a market order for any shares, but you’re going to buy shares of gamestop on monday um, for whatever amount you decide to invest, maybe it’s a thousand dollars. Maybe a couple hundred but you’re gon na try and get shares of gamestop at the lowest price possible on monday at market open, uh it’s, probably when they’re gon na be cheapest, you might catch a dip in the day, but i expect might be wrong, but i Expect that the price is going to take off monday uh due to a ton of activity, um there’s, really just two ways: do one to a lot of people wanting to get in now, they’ve seen all this stuff, so the price is going to go up so Get it get an order in? Maybe you can put it in a few dollars up.
If you don’t know what a limit order is. All that basically says is i’m paying at most this price for these shares and anytime it gets under that price. The broker is going to try and fulfill that order, for you so they’ll go ahead and get those shares, so your order might not all be filled at once with something like this. I i really don’t don’t know what it’s going to look like guys, it’s it’s it’s, going to be tough to get in honestly. You might not get in at 70 dollars. You might have to catch it on the upswing, which might be okay right. If, if the squeeze does happen, there’s plenty of upside there um to be gained, but it could drop too. So i really, i really. I really don’t know how long the price is going to stay around 70 um on on monday. It might dip right at my market, open don’t know. People might want to take some profits. That’D be weird honestly, because i could have just taken those profits at market close on friday, so very unlikely. I don’t imagine people taking profits on monday, especially since the next set of options is going to expire on friday. So if anything we’re going to see the price explode or stay flat throughout the week with a huge, you know amount of volatility price explosion. At the end of the week, either way it’s going to be pretty exciting, so if you do get in, you got to have diamond hands.
This is not, for you know, people who are risk averse or layman. If you can’t stomach, seeing thousands of dollars come out of your account, possibly at one point in the day and it go up and down this is not for you stay away. You will get eaten alive, you’ll lose money don’t. Do it um yeah final disclaimer is none of this is financial advice by the way, so don’t get mad at me. If you lose money that’s on you, i’m just here to give you information um in general, though pretty excited with my account, you know, went from 40 000, all the way up to 71 000. That is what swing. Training is about uh it’s. My second big win of the year, my first big one in the year, was on shorting nikola, which is uh surviving a little bit longer than i expected to be honest, but hey i’m, not playing it anymore. I got out after the set of events that i was you know very confident about. I haven’t touched it since then uh looking for my next big setup, i’ve seen people talking about blackberry and a few other things. I think blackberry is a terrible company, but you know maybe the the interest, but maybe the interest drives uh. Some change in the in the share price, so yeah, really the big plays this week – are going to be gamestop. Cciv palantir has seen some gains uh, but it’s going to be all all uh all hands on deck for managing these.
These options uh on on gamestop, because they’re gon na be super volatile, and if we do see some super appreciation, i got ta figure out what my price target is. I actually haven’t decided what i want my price target to be for when i get out, because i don’t want to fomo, which is stupid, completely stupid, but that’s what i’m thinking. In any case, i appreciate you stopping by thanks for watching this video check out the other ones.