Is it too Late to Buy AMC Stock? MASSIVE PROFITS

hey everyone we kevin here let's talk

about amc because amc is up 2 900

this year it is up 95.22

today that's almost a double and it is

up another 5

in after hours currently trading at

65.70

so what the heck is happening is it a

gamma squeeze is it fomo is it a short

squeeze

and what are the strategies for

investing in amc

is it too late to buy is there a

protected way that we can buy and try to

make some money

versus a lot of money should we bother

what am i doing what have i done with

the money that i said i would invest

into amc

well let's talk first thanks to the

covet pandemic obviously

and many lockdowns amc has been

brutalized in the market and it's

not a surprise that amc is not expected

to be profitable

at any point for really the next three

years in fact forward guidance

right now based on wall street

indicators are that we're

expecting negative earnings for amc

through at least the end of 2023 and

there is no guidance for 2024

or 5 that indicates profitability a lot

of this has to do with a lot of leftover

debt

that amc still has on their balance

sheet which has a lot

led a lot of folks to say hey amc should

just sell a bunch of shares

especially while the price is higher to

start eradicating

their debt which is exactly what they

did yesterday when they sold about eight

million dollars

worth of shares but they got a lot more

debt to go so there's definitely more

capacity for them to sell

a lot more shares but let's focus right

now

not so much on what amc is doing because

ultimately what amc

does from a business point of view has

to be up to them

and will likely be in the best interest

of the company because keep in mind if a

company sells shares

even though that dilutes the value for

shareholders

especially if you own the stock that

means you own a smaller slice of the

bigger pie

it does give the company money to buy

other movie theaters or pay off debt

which

ultimately is a good thing because as a

shareholder in the long run

you want the company not just to survive

but to invest and

thrive very important but now we gotta

talk about more importantly the share

price action that's happening right now

so thanks to measures i like the short

interest

we are able to notice that companies

like amc since march

has had an increasing amount of short

selling pressure

piling into the stock and it's not just

amc

it's companies like workhorse

cloverhealth many specs

even kathy woods arc invest

have been shorted like crazy and many

companies have seen their short

interests explode

especially since hedge funds started

shorting in february

specifically biotech and tech and then

eventually online consumer

discretionaries february and march

they ended up making a lot of money

shorting these companies and they've

moved into

what else can we short this is why we

started seeing the amc short

interest move up again at the beginning

of may to about

mid-may we started seeing short interest

go

up more short pressure because the hedge

funds and institutional investors or

anyone shorting

they're looking to make money in fact

they're not just shorting

biotechs and then tax and consumer

discretionaries and then

some of our recovery plays like amc or

the spax or whatever

but there is also a lot of speculation

that hedge funds

are part of the reason why we're seeing

a massive crypto sell-off or at least

have seen a substantial crypto sell-off

in that hedge funds we're looking for

the next best thing to short and what do

hedge funds have access to that we don't

shorting cryptocurrencies and so maybe

they shorted the snot out of

cryptocurrencies

as well and so this obviously frustrates

a lot of us retail investors because

we don't even have access in many cases

to short

cryptocurrencies and even if we wanted

to most of us

don't like betting against our futures

most of us don't like betting against

our retirement portfolios or betting

against the companies we work for

or shop at or support short selling even

though

short sellers like to say it's good to

weed out fraud in markets

short sellers generally aren't liked

there's a reason

elon musk sells tesla shorts

like literally short shorts and they're

red

and tesla sells them to make fun of

short sellers

but anyway retail investors in general

and some institutional investors on our

side are pretty

tired of short sellers winning and so

amc has recently become the battlefield

to fight back so get this in a typical

week amc

usually has a trading volume of around

20 to 50 million shares

per week well last week amc traded with

a volume of over

not 20 to 50 million but instead 2

billion shares to make that a little

more clear if in a usual week we have 20

to 50 million

now we've got 2 000 million in shares

volume

and this week has only been two days

long

and we've already had 1.234

billion shares already traded that's

more than half

of what we've had last week in just two

days on a shorter week here

on top of that there are an insane

amount of call options that have

recently been piling in on amc

a typical call option on amc at any

given price

usually has like three to five thousand

contracts on it the highest

put option contract for amc right now on

june 18th

is a thirty dollar put with 32

000 contracts that's a lot but get this

the highest option available for calls

right now on amc

is the 73 dollar call option the 73

call option for june 18th has 75

863 option contracts on it in other

words on june 18th 7.5 million shares of

amc have the right to be bought at 73

and those will be completely worthless

those contracts if amc is trading for

even a penny below 73 or they could be

very valuable depending on how high

amc goes but determining how high amc

can go whether it can go to

a thousand or ten thousand or a hundred

thousand is very difficult at this point

and that's because this rally is not

fundamentally driven it is not a

fundamentals rally we're not looking at

the price to earnings ratio or the

future price to earnings ratio or the

future cash flows

uh or doing a discount analysis on this

to determine

okay what is this worth in the future oh

wow it's undervalued no what's happening

right now

are a combination or is a combination of

three things

let me explain each of these and then

we're going to talk strategies

so number one gamma squeeze and delta

hedging so this sounds really

complicated

i'm just going to make this very very

simple so

delta it has to do with the change in

price of an option

gamma has to do with the rate of change

of the change in price now if you didn't

understand

what i just said don't even worry about

it because here's the real

simple bottom line because that's the

delta hand gene gamma squeeze we could

we could do a whole video on that okay

let's just make it even easier than that

now that we've defined we know what

those are okay they have to do with

options pricing

let's put that aside for a moment let's

make this very simple

call options you know what a call option

is if you buy

a call option you have the right to buy

100 shares per option that you have so

if you say

i'm gonna buy one 73 dollar call

option uh with a strike on june 18th of

2021

that means on or before june 18 2021

you have the right to buy 100 shares of

amc

at 73 but for you to have that right

somebody has to be willing to sell you

those shares

if they don't already own those shares

the person who

is giving or selling you the contract

has massive risk

because if the share price becomes much

more expensive then it's going to cost

them a lot of money to buy those shares

to give you the right to buy them at 73

so the way to offset this risk

or hedge that risk is by the person

who's selling you that call option

going out into the market and literally

just buying the shares

so they have the shares available for

you that way they can sell you the

options contract

make a premium for selling you the

option but

what happens then oh wow all that

buying of shares drives the price of the

stock up

people who bought call options are like

oh wow i just made a lot of money on my

call options because as the price of the

stock goes up

the price of options goes up sometimes

two to three to 10x is fast depending on

the duration of the option

and now people buying call options are

like wait a minute i'm making money

really fast

and i'm telling all my friends and

family about all this extra money i'm

making or maybe i'm not maybe i'm

keeping it a secret

fine whatever and guess what you go buy

more call options which again forces the

the seller of those call options to go

buy more shares

so this literally leads to this

perpetual feedback

loop and perpetual energy of more people

buying calls

more shares being bought price going up

the second thing that's happening

is fomo buying people are seeing people

become overnight millionaires by

5 or 10xing their money with options

really quickly so more people want to

buy

options leading to more gamma squeezing

in the options

it's nuts the price continues to go up

and now this cycle can't go on forever

but it can go on for a while why can it

go on for a while

because of number three the more the

price goes up

the more short sellers get squeezed out

of their

short positions that's because short

sellers are borrowing their shares

paying interest on those shares and they

risk getting margin called because

they're

borrowing anytime you're borrowing if

your equity

goes negative or or falls too much you

can get a margin call which means you

have to either bring in more money

to reload your shorts so to speak add

more money to make sure you have equity

or you just gotta give up your short

position and end up

covering which just literally means

buying the shares

so if you literally missed everything i

said for the last two minutes you can

either

rewind or you could get life insurance

in as little as five minutes by going to

metkevin.com life

or i could just recap it by saying

people's buying lots of shares because

people's buying lots of call options

and because the price keeps going up

more people keep buying and the more

people keep buying the more the price

goes up

the more short sellers are like oh damn

i don't know that i want to be in this

trade i'ma buy more shares too

to cover my short position okay so in

other words lots and lots

of buying all together and it's

all tied together under the guys that we

are apes

holding on strong because it's not a

guys maybe it is the truth

the stronger retail buyers hold on

the more those short sellers who are

borrowing who are paying interest

get weaker and weaker they start getting

paper hands and they start covering

because see as retail buyers as long as

we're not borrowing we're not paying

interest we're not getting short

squeezed doesn't matter to us

we can hold on for dear life way longer

than they can because they're paying

massive loan fees every day or having to

feed the kitty

by bringing in more money to prevent

those calls those

margin calls yeah so what can stop this

well eventually people start selling

eventually

people start taking profits or you get

brokerages that because of the dtcc or

whatever

stop allowing us to buy out of the money

call options

on amc kind of like what they what they

did with gamestop

back in on january 28th of 2021 which

i'll never forget because it was my

birthday

and i covered it live and this is why

you always want to make sure to

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then it went up like 19

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but anyway where do we go from here and

how do we make money

well remember where we go from here

could potentially be dependent on what

happens at brokerages

if they restrict us from buying again we

stop that gamma squeeze from happening

which means we

stop the potential short squeeze from

continuing and prices could come down

especially as folks decide you know what

it's time for me to cash

out and take some profits and take some

attendees home take some of that bacon

home

or we could potentially which we are

seeing right now see a lack of

other call options available being sold

to us because market makers say you know

we're just not selling any more of these

call options it's too risky and then we

have less to buy

and then maybe we're not buying those

out of the money calls anymore and

there's less

gamma squeezing that needs to be done in

the first or that ends up happening in

the first place because there's less

delta hedging

again all that basically means is

there's less pressure on buying the

stock

and so how do you make money on amc and

is it too late to buy should you even

bother buying amc right now well

here are a few choices that you have

number one you could literally just buy

the shares the most you could lose with

this strategy is a hundred percent but

usually you don't lose anywhere near 100

unless the stock goes bankrupt so for

example if you put ten thousand dollars

into

amc at sixty dollars and it goes to

thirty dollars hey you lost five

thousand dollars you lost fifty percent

if it goes to 15 okay you're down to 2

500

you still have something left right the

odds of you losing 100

generally relatively low when you buy

the shares or you could buy

options which the cool thing about

options is they are a form

of leverage if you get shorter term call

options

you have a good chance of losing 100 of

your money but you could also two

three four five eight x your money

really really freaking fast

and this is why a lot of people like i

don't care this is my yolo

i'll put my money in knowing i'm

gambling knowing i could lose everything

but

right now with the movement the the

roulette wheel is tilted towards green

okay

it's it's tilted in our favor is what it

feels like but we don't know

how long it'll be tilted until it tilts

back it's just an odds game and it's a

timing game

the other thing you could do and i did

this this morning is you could

sell a put now usually when people hear

put they're like oh my gosh put that's

associated with being bearish no no

no no selling a put is actually bullish

see what i did

was i sold a put when amc was at about

59

i sold a 73 put and i

sold seven of those contracts that means

that i got a seventeen thousand dollar

credit so in other words i got paid

seventeen thousand dollars in return

i promise that this friday i will agree

to

buy amc shares at 73

if the price is less than 73 so if the

price of amc

shares is dollars

on on friday at the close i have agreed

to pay 73 for 700 shares

at the close of business on friday in

return for me making that agreement

i got seventeen thousand dollars which

is actually

kind of like buying the shares at forty

eight dollars so even though most of the

day today well

i would say probably like the last two

thirds of the day

uh amc was trading for around 58 to

65 i was basically able to buy amc

shares for 48 which is really cool

and i did that by selling a put now the

downside is

if uh amc goes up to

a hundred dollars or a hundred fifty

dollars i don't get to participate

in that gain because all i'm gonna get

to keep is my seventeen thousand dollars

i don't have a call option so i don't

have a right to own any of the shares

i would then have to go in the free

market on friday take my extra 17 grand

and go shopping for these now more

expensive shares the other downside

would be

if amc shares fall a lot i would be

forced to buy at 48

which could be overpaying but i did get

paid that 17 000

credit which is letting me buy them for

48 and i'm okay with that because i said

i would be buying amc shares this week

so that is a creative option that you

could use to lower your cost basis when

you know

you're going to buy within a time frame

anyway and i made an agreement that i

would buy

this week and so that is an option that

i took it actually

de-risked my investment and it gave me

an option to get into amc at a lower

price which is really cool and

if i don't get assigned the options or

if i don't get assigned the shares

i could always buy the shares now i have

an extra 17 000

as well which is kind of cool so it

would be a profitable move i'm very very

happy with the decision to sell some

puts

we'll see what happens though i'm very

very tempted

to buy calls but remember this

every day the market is green your risk

goes up i would love

an opportunity to have a little dip in

the market and then buy some calls

but hey i don't make the market number

four

way to make money on amc is you could do

the dirty and take bearish positions

like shorting

buying a put or selling a call but we're

not going to discuss

those here because ultimately that's for

hedge funds or people who want to hedge

their portfolio

and we're not going to talk about that

that's an option for you though and i

want you to know that's available

but it's not something i'm considering

doing and it's not something that i

think most of us watching really care to

hear about right now so

what about the future well folks

remember as

price comes down your risk goes down as

price goes up

your risk goes up price is way up this

is

very very very very very risky now

with great risk can sometimes come

really really really great rewards

and i think that's what we're keeping

our fingers crossed on

is that we can on friday buy some big

fat call options

or tomorrow buy some big fat call

options make some really big attendees

take that money invest in either more

call options or just

take our money and run and go wow we won

at las vegas

and we won at the casino that's great

you just have to know

when to walk away from the table and for

right now

i don't think anybody's walking away

from the table because this is ape

nation

and we're holding on now we'll see what

happens going forward

but i'm excited for friday because if i

don't get assigned those shares

i'll probably be going shopping for some

options we'll see

not financial advice don't sue me bro if

you lose all your money remember

just for clarity i am trading into amc

right now

with less than one half of one percent

of my portfolio

so i want you to always know risk

adjusted how much of my portfolio

i am putting into these place thank you

so very much for watching and folks

we'll see in the next one make sure to

subscribe if you found it helpful

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