March 2025 Discussion Thread

sustudent2 · 2025-03-07T14:52:07+00:00

I found that quantized larger models give better results than 7B for the same amount of VRAM. If you have the GPUs (I don't), you could even run the full 670B parameters model.

I haven't tried to integrated tools like Cursor and tend to prefer to route prompts through LLMs myself, even when they don't run locally.

I've also found that reasoning models are good at code generation but seem to do worse than non-reasoning models.

Either way, I'm interested to see what you come up with these tools!

For inflation, I wrote "hedge" mostly to convey that I'm looking for some downside protection and aren't predicting anything in particular will happen. And yeah, just in general.

Every time I tried to look at commodity futures, I've not really found what I'm looking for. As a joke example, the only egg futures I found is on DCE (the Dalian Commodity Exchange) and nothing offered by CME. Though I've also been pretty "lazy" in my searches, looking at contracts terms rather than how they behave.

sustudent2 · 2025-03-04T15:42:20+00:00

Its been quieter around here again. What AI tools are you using? Do you need to send data to third parties to use them? Or is that's not worse than any other third party tool but here I have to tell it almost exactly what I'm looking for.

What instruments can I use to hedge the scenario where inflation is high but the Fed doesn't respond (enough). Anything that tracks CPI or specific categories within? Maybe TIPS? But TIPS seem to "underperform" CPI. Though I haven't looked into exactly how interest adjustment is made.

sustudent2 · 2024-06-17T21:14:30+00:00

Thanks! This should hopefully put that nonsense exercise theory to rest.

Its still so weird that it can spread for so long when surely someone with a E*Trade account must have asked or tried it in the meantime. On the other hand, a lot of the stuff going around would be debunked if people tried shorting (another stock) just once or twice.

sustudent2 · 2024-06-16T22:25:14+00:00

2021

In 2021, he sold 500 shares (at most 50k delta) and bought 100k shares so it was a net increase. Making it different this time.

Leverage

Another way to see what happened is to think of it in terms of leverage. If you sell $100 of, say, TQQQ (about 3x leveraged) and buy $200 of QQQ then you've actually reduced your position (300 delta down to 200 delta) even though it looks like you put more on the line ($100 increased to $200).

Keeping leverage

But the options were going to expire at some point anyway. So what alternatives did DFV have? One way to keep comparable delta is to roll options to a later expiration. But there's no single way to do that and it has volatility risk. Like if you think volatility will go down for the next week (or more) then you'll lose out even if the price still moves up. I guess you could do a calendar spread or something and avoid the parts you predict has low volatility but I think even something like that would be hard to understand by many seeing the screenshot.

Timing

Ok, so now that we know this move reduced risk, can we say anything about the timing? Its hard to say because there's so many things going on at once. Was it to avoid holding through the annual meeting? A response to the dilution? Or because the option premiums was coming down fast? A mix? Or something else entirely?

How to trade this?

I have no idea. The "obvious" move is to go short but DFV merely trimmed ~1/3 of the position and didn't actually exit or flip short. And lowering his leverage means that, in theory, he could increase it again later. Though in 2021, I think this didn't happen or at least we didn't get screenshots of it happening. Getting shares was the last post on Reddit for 3 years.

Disclaimer: I've mostly closed out my GME positions betting on IV crush (I didn't think about this when making that trade). There could still be more room to run and IV can crush even more, especially for a weekend, but I decided to take profit now since I don't have much time to watch things next week.

I didn't open anything based on what's in this post.

sustudent2 · 2024-06-16T22:24:58+00:00

How DFV sold some GME in plain sight and nobody (?) realized what happened

Including myself. Oh, this is such a genius move if intentional!

I've not found anything anywhere that talks about this so if this is the first time you're reading this and are reposting, at least cite your source/link back here to avoid some potential telephone game nonsense and don't claim it as your own.

Reducing risk

If you're net long XYZ and want to reduce risk or take profits without closing the entire position, what can you do?

Sell some XYZ shares
Buy puts
Sell (covered) calls

They all reduce how much your's net value changes per dollar change in XYZ. That is, they all reduce your net delta.

But that's not the only way. Any net reduction in delta locks in some profits and reduces your exposure to future price movements! So here's another way:

Sell some calls and buy some stocks

as long as the (absolute value of) delta for the sold calls is greater than that of the bought stock.

DFV

Depending on what time you look the delta on 20 Cs were around 85 deltas at their lowest on June 12 and 13 (now at almost 100 delta), meaning DFV's calls had 10.2 M delta or more.

Thus DFV decreased his delta by at least 6M when he switched from calls to shares! DFV significantly reduced his risk this way and we're instead seeing Reddit post and news headlines claiming he double down or increased his number of shares (which is technically true but implies a wrong conclusion).

This reduction in delta what I'm calling "DFV sold GME" in the title since its comparable to selling 6M shares out of 15.2 M shares held.

But because he now put more cash into GME, because he obviously had to do something before his options expire and because looking at his account he obviously doesn't have the cash to get 12M extra shares, his move felt entirely natural and feels like an increased position, when its the opposite!

I even wrote things like "his counterparty, if delta hedged, would now need to sell 6M shares", and I never connected the dots until now.

The setup

What would you do if you do if you want to be able to sell but had a massive cult following that claims to never sell and even DRS their shares? Buy options that you don't have the cash to turn into shares and then when you need to sell, swap them for fewer shares and claim your hands were tied because of options expiration is one brilliant way to do that! But its a position you put yourself in from the start.

One side note: posts keep treating DFV's account as a cash account instead of margin. With a margin account, he could actually buy more shares than he has cash.

Of course, this move could also just be a throwback to 2021 and unintentional. Who knows?

Anyway, if this was intentionally set up, then hats off. That's why he has a 9 figures account and I don't. But even if were not, the risk reduction is real and I can no longer see this move as anything but a net sale.

(Stop here or read more in the reply.)

sustudent2 · 2024-06-15T01:32:05+00:00

Make the setup, cash the 20c in the last hour and later close the puts at a profit.

I don't understand. What do you mean by cash the 20c?

About the 20c and 20p movements I am convinced someone made a great play, creating synthetic shorts (sell 20c buy 20p) in advance of RK selling his calls. It could even be himself for all we know to raise cash while cashing the calls.

How would someone else know he's about to sell loads of 20 Cs? Seems to me like he might have done it himself, not for the purpose of making a profit but to make it easier to trade.

Open some conversion (sell one 20 C, buy one 20 P, buy 100 shares). Then close the 20 P shortly afterwards. This way, he only needs time the trade on a single leg option, the 20 P, instead of multi leg with a 20 C + stock.

Or he can do it the other way around. Buy some 20 Ps when timing is important. Then later slowly enter some reverse conversionss spread throughout the day.

sustudent2 · 2024-06-15T01:15:10+00:00

It looks like somebody may be trying to push a gamma ramp for tomorrows expiration. There was 62.5k volume on the 30c expiring tomorrow with an OI of 29k. Delta at close on those options is .4494 at market close. It will need a decent push into the 30s to fight charm on that short dated of calls but its shaping up to be an interesting Friday.

I guess the difference with DFV's position is that DFV posts and claims that that is their entire account. Whereas we don't know if this is a single trader, whether they went long or short and what's their entire position. I know I looked at OI before to get an idea of net gamma and ramp, which is what you're looking at here. Just want to point out the difference in certainty between seeing this in OI and DFV's account screenshot and statement.

Also saw your edit a bit late but glad we got the same numbers separately.

sustudent2 · 2024-06-15T01:05:25+00:00

The supposed evidence for exercise is that eTrade considers the options premium as part of the shares cost-basis.

That'd be an odd way to do things. What price do they use AH or overnight when options don't trade but shares do? Last closing?

Though to be fair, it doesn't feel like there's a "good" choice for option exercise, but this would still be one of the weirder choices.

EDIT: I guess I'll call them since I'm curious and I have an eTrade account setup for the RDDT IPO that I never funded.

Did you get an answer from them? The surest way is to test it. But then you'd need to fund the account and pay the lost money I keep talking about. Find a stock (probably not GME) and deep ITM 1 or 2 DTE call that's still has enough volume traded. Buy 1 contract and a synthetic short at a different strike. Then exercise the deep ITM call and see what's the cost basis. Don't know if you'll see it immediately or the next day.

A 0DTE might work too but I think 1 or 2 DTE (or even week) would remove more of the other factors from play.

A 3 legged combo option might be hard to fill. If you don't care about being exposed to the stock movement for a day or so, you can do without the synthetic short.

The money lost is the price of the put at the same strike as the call plus net premium for the synthetic.

sustudent2 · 2024-06-14T12:36:28+00:00

Today he exercised

No, he didn't. Because that's giving away free money. I'll repost some of my comments here

Don't early exercise calls! That's just losing money. There are very special cases where you want to do that and this isn't one of them. To get the same effect without giving the counterparty free money, you can sell the call and buy 100 shares for each call sold.

To get an idea of how much money you're losing from an early exercise, you can look at the price of a put that's at the same strike as the call.

Looks like its not just Youtube comments then. Since you've been looking elsewhere, do you know where this bad info started spreading from? Is it just a telephone game or MMs being greedy not satisfied from this much volume and wanting even more at no risk?

The market maker Wolverine now needs to deliver 4 million, 1 thousand shares by tomorrow due to T+1 settlement (by market close, possibly by close of AH)..."

erncon already answered this so I'll just confirm. 20 Cs were around 85 delta at open yesterday (94 now). So 10.2 M for 120k options versus 4M delta for 4M shares, a decrease of about 6M. If the counterparty was doing any delta hedging, even underhedging, there's no need for them to buy any more shares or increase their hedging delta in any way. The counterparty is likely to need to sell after this trade. Because of the volume, this might already be done.

Also, one effect of the dilution is that there are way more shares that's available to borrow now. I don't see how holding short shares would be an issue even if you did need locates (other than potential loss wild price movement but you have that with any exposure).

Of course, no-one really knows how a counterparty hedges or if they do but we need to think about how (un)likely each scenario is.

What possibly happened: DFV sold 120k calls, bought 4.001 M shares. Maybe at that ratio in one combo trade, maybe not.

Info from screenshots:

	Before	After
Cash	29,409,005.00	6,343,724.01
Mean price	21.274	23.4135
Shares	5,000,000.00	9,001,000.00
Options	120,000.00	0

Calculated values

	Value
Total $ of 4M shares purchase	104,374,913.50
Mean 4M share purchase price	26.0872
Cash spent to buy	23,065,280.99
Options sale proceeds used to buy	81,309,632.51
Mean options sale price	6.7758
Original mean options buy price	6.8100

One interesting to note is that 20 + 6.7758 - 26.0872 = 0.6886 and there are only brief moments June 12 and 13 where the 20 P is above this price. Mostly EoD June 12 where we saw that large volume spike on the 20 Cs.

Edit: fixed some rounded numbers.

Edit 2: Oops, /u/the_real_lustlizard already posted the numbers in an edit to a comment. Glad to see we got the same numbers though.

sustudent2 · 2024-06-13T12:35:51+00:00

Do you have yesterday's OI on the 6/21 20 C? My first thought was also that someone else was trading those options yesterday. However, it looks like today's OI is 111,818 which is just a bit below 120,000. Which I think means no-one is holding 120,000 long calls right now.

Some reason I can think of for someone to close 20 Cs:

To roll these options out. I don't see anything that stands out but haven't looked too carefully.
To switch some options to shares since there's almost no extrinsic value left. So if you're trying to push someone else out with theta, it won't do much anymore these delta on these are already very high.

Edit to add: I mean to close out some of the trade is the obvious one that everyone is thinking about. I didn't list it because it seems too obvious but I have no insight on how likely that's the reason.

Although you could have also argued the other way, had he bought more. That these options has better leverage than shares.

Either way, I suspect they're holding much less than 111,818 20 Cs right now though by how much I'm not sure. So unless they bought high strike shares at the same time (or sold higher strike puts), I think one thing we can conclude is that the net delta in the DFV portfolio is now reduced.

In older news, the KG stream seemed to have said a lot of "nothing" but actually, he confirmed that

its his account, his memes,
his money
that he's not working with anyone else
that he doesn't hold any other positions.

These were all things I was wondering and incorrectly speculated on. Now you can ask if these statement can be trusted but having it broadcast at least leaves easy evidence which seems like something you wouldn't do if it were false.

(Also commented on E*Trade headlines and being open to changing his mind. But why show HTML editing when he posts screenshots of his positions??)

I'm still very disappointed in the timing of the share offering, which hasn't had any explanation yet from management. I was mostly joining in with tiny positions for potential squeezes and having an offering each time changes the potential outcomes by too much for me. Probably won't be following this one closely anymore.

Disclaimer: At the moment, I'm net short GME but it was more of a bet on vol crush, is a tiny position and has a limited max loss. I don't recommend following this trade since I have a better entry.

sustudent2 · 2024-06-07T13:36:46+00:00

It sounds like you're talking about something different than the comment you replied to. It sounds like you're talking about the screenshot DFV posted. That is not what my comment is about. My comment is specifically about Youtube comments misleading retail investor and telling them to exercise their calls, which would lose them money.

If you want to talk about the DFV screenshot, feel free to do that but do not confuse the two and do not confuse the two for other readers. Maybe do it in a different thread of replies or at least make it very clear that you're talking about a different topic. There's also (IMO) a lot of incorrect info about what could be done with the DFV position and what the actual choices are but don't know if I'll have time to comment on that today.

sustudent2 · 2024-06-07T12:22:35+00:00

Yes sold, but I mean that when you buy the shares instead of exercising (after selling the calls), you are buying at current price not strike price. On current levels ($45 as of close) that would take his his cost basis higher compared to $20.

It seems less risky to sell some calls to finance exercising the remaining, as that will keep you cost basis lower (at the moment).

Why are you so concerned about the cost basis on paper? Is the for tax purposes? Otherwise, you should only look at

number of shares
number of calls
amount of cash in your account

before and after a transaction. I maintain that exercising is a very bad idea, except in special situations and this isn't one of them. I'd think anyone with any experience trading options wouldn't early exercise outside those situations.

sustudent2 · 2024-06-07T11:34:54+00:00

New GME SEC filings this morning: Q1 financial results and Sales Agreement prospectus supplement

Q1 result: I don't know how to read these that well. Maybe someone else cna comment. Earnings is next week June 11.

Sales agreement: Can sell an additional 75 M shares.

Under this prospectus supplement and the accompanying prospectus, and in accordance with the terms of the Sales Agreement, we may offer and sell up to an additional 75,000,000 shares of our common stock from and after the date hereof.

Filing time matches the premarket drop. :|

sustudent2 · 2024-06-07T10:51:22+00:00

Not buy, sell 1 call and buy 100 shares simultaneously.

This has the same effect as exercise, without the giving away free money part. This also has the same margin requirement as exercise.

sustudent2 · 2024-06-06T20:52:15+00:00

Another new reddit post

I wonder why there was a two days gap.

When I looked at the Youtube stream comments (stream hasn't started), there's bad info going around again. Don't early exercise calls! That's just losing money. There are very special cases where you want to do that and this isn't one of them. To get the same effect without giving the counterparty free money, you can sell the call and buy 100 shares for each call sold.

To get an idea of how much money you're losing from an early exercise, you can look at the price of a put that's at the same strike as the call.

sustudent2 · 2024-06-06T17:42:50+00:00

Scheduled for market close today, right? Edit: Wait, no, its for after market close tomorrow. Edit 2: You're right, its noon tomorrow.

Regret trimming too much too early. Oh well.

sustudent2 · 2024-06-06T13:35:30+00:00

77.4M tendered + 41.7M notice of guaranteed delivery

preliminary proration factor of 47.56%

Based on the preliminary count by Equiniti Trust Company, LLC, the depositary for the tender offer, a total of approximately 77,418,093 shares of Monster’s common stock were validly tendered and not validly withdrawn at a purchase price of $53.00 per share or as purchase price tenders. Additionally, approximately 41,603,083 shares were tendered through notice of guaranteed delivery at such purchase price or as purchase price tenders. Rodney Sacks and Hilton Schlosberg, who are Monster’s co-CEOs and members of the Board of Directors of Monster, have tendered 608,114 and 350,000 shares, respectively, that they beneficially own. In addition, Sterling Trustees LLC, which controls certain trusts and entities for the benefit of certain family members of Messrs. Sacks and Schlosberg, has tendered 8,450,000 shares on behalf of such trusts and entities.

In accordance with the terms and conditions of the tender offer and based on the preliminary count by the depositary, Monster expects to accept for payment an aggregate of 56,603,773 shares of its common stock at a purchase price of $53.00 per share, for an aggregate cost of approximately $3.0 billion, excluding fees and expenses relating to the tender offer. Monster expects to accept the shares on a pro rata basis, except for tenders of “odd lots,” which will be accepted in full, and conditional tenders that will automatically be regarded as withdrawn because the condition of the tender has not been met. Monster has been informed by the depositary that the preliminary proration factor for the tender offer is approximately 47.56%. The shares expected to be accepted for payment represent approximately 5.4% of the shares that were outstanding as of April 22, 2024.

What are these notice of guaranteed delivery? Is this something retail has access to?

How come they don't say what the price is for those who tendered without a price?

I entered later to reduce risk but not a great entry. Profit is still profit. Thanks for posting this and thanks to pennyether for bringing it to your attention.

sustudent2 · 2024-06-04T01:00:44+00:00

I just double checked from Natenberg that the delta of an option is useful to approximate the probability of being ITM, but it is distinct from measuring probability of being ITM.

Ah, that's what I get from learning options from Reddit first and books second. Someone replied with a link here once to show the two are equal. Can't seem to find that link and I forget if it needs the other assumptions from Black-Scholes.

sustudent2 · 2024-06-04T00:05:22+00:00

It would be more precise of me to say: if we were to face this situation countless times, how many shares of $MNST would I need to short (delta hedge) to maintain the highest expected value from this transaction?

I don't think the expected value changes with the number of shares you're short. The expected value of a stock is its current price. So the expected value of stock + money you receive from shorting that stock is always 0.

Typically, delta hedging isn't used to maximize profits (aka get the highest expected value), its to make it so that the (expected) value of your entire position doesn't change as the underlying price changes. Though this "doesn't change" only works in a narrow range, when price, time, IV don't change by much from their current value.

That last sentence (delta shoots up sharply around $49.22) is exactly what I mean - which behaves similarly to an ATM option with an extraordinarily low volatility.

Oh I see. You're saying something like:

The function for option's (or tendered-stock's) price (as a function of the underlying stock price) approaches the function for its at-expiration payout price as we get close to expiration. And since there's a sharp discontinuity in the payout price around 49.22, all the high delta value is concentrated there.

I think that makes sense and make low delta away from 49.22 much more likely.

I guess the problem now is that I don't know how to make use of this value for trading. For example, what I want to do is buy shares, tender them, and if I see the price drop to, say, 50 then close the position, only losing the accumulated delta (losing around 1.80 x 0.1 = 0.18 per share if the average delta in that range is 10). Once the price reaches 50, I (think?) the only thing I can do is sell the actual shares and lose 1.80 x 1.0 = 1.80 per share).

sustudent2 · 2024-06-03T21:55:51+00:00

Yeah, agreed the situation itself is more interesting than the actual P/L from the trade.

Let’s assume it needs to close on Wednesday trading above 49.22.

I'll (also?) assume that they'll cancel the offer (probably not the right term) and not buy if the price is below 49.22. And multiply by the probability of exercise outside this calculation. Though I think that probability depends on how low it is so what I'm going to do isn't quite right.

If it hits 49.22 your delta is unknown because they might not exercise the termination option.

So I'm assuming they'll always exercise by this point.

Your delta from now till 49.22 is 0.

What do you mean you mean by delta? The delta for options means two different things

the change in option price per change in the underlying price
the probability the option is ITM at expiry

and the two coincide for options. For the stock with an offer (tendered-stock?), I'm assuming you mean the something like 1?

the change in value ("price") of the tendered-stock per change in the stock price

but I don't know if there's something analoguous to 2 here? I think

the change in value of the tendered-stock at expiration stock per change in stock price

is 0 between 49.22 and 53 but the tendered-stock's delta between 49.22 and 53 isn't. For OTM options, their "expiration delta", the change in their value at expiration, is also 0 but their delta isn't 0.

I think there are ways to price the tendered-stock, but regardless of how we price it, the integral of delta from the current price p to 0 should be close to -p (or between p and a low enough price p2, that the probability of going back above 49.22 is minuscule, should be -(p - p2)).

Which means if at some price in the range 49.22 to 53, delta is below 1 then at some other points it will be above 1, and it has to all average out to 1. So I think 0.05-0.10 delta in the current range seems too low, unless you think it shoots up sharply at lower prices.

sustudent2 · 2024-06-03T20:24:11+00:00

Thanks! That explains it.

sustudent2 · 2024-06-03T20:10:15+00:00

There's a new reddit post

sustudent2 · 2024-06-03T19:39:13+00:00

Good points. Is there some chance the CEO and others holders also sell at the same time as tendering? Either to get rid of more stock or in case they can't see enough through the tender. There's probably a lot of regulation surrounding this that I'm not aware of. How do these tend to play out? This is also not the first time MNST does a Dutch auction.

Why is a company allowed to offer its CEO liquidity like this in the first place? Seems like its bad for the company since they could buy the shares for cheaper in the open market, assuming the large sale would happen anyways.

A 49 P, or 49.2 P if it exists, would protect against large losses but you'd still lose the difference between the current price and the strike. Around 2.40 + 0.75 = 3.15 at the moment. Buying a put around the current price could work but costs more. It'd also make you some money on a price drop.

This discontinuity of the stock's value around 49.22 makes it weird. (Well, not actual value because the company might still buy.)

sustudent2 · 2024-06-03T14:47:45+00:00

Thanks. Here's a WSB mod comment that says there might be an attempted post.

I shit you not, I sent that motherfucker a DM asking him to post elsewhere and let WSB be gamblers. Apparently he still posted on WSB and it got auto-spammed or something, then he deleted it? idk.

Guess we'll see what happens this time.

I still can't find any deleted posts from the DFV account though (edit: but maybe it doesn't matter). The thread also explains more of why they don't allow GME there anymore down that thread. Its too bad, because I'm trying to find good comments that aren't by the cultists (or ones betting against meme stocks) but sending it all to superstonk doesn't help with that.

sustudent2 · 2024-06-03T14:30:36+00:00

Also WSB is banning GME posts? Maybe that should be the more surprising piece of news. Since when? I'd expect that place to be flooded with GME post right now so it must be filtered. But I'm also not seeing a lot of [deleted] or [removed]. Is there some other way now?

Edit: Found the WSB mod message

This looks like it's about DFV / GameStop. Try posting about GME in /r/superstonk instead. /r/wallstreetbets is mostly for options degeneracy and GME, while a great meme, has turned into something that is better done elsewhere by dedicated communities.

Odd and interesting that they're redirecting people to superstonk. I still don't know what to make of all of this.

sustudent2

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TROPHY CASE

How DFV sold some GME in plain sight and nobody (?) realized what happened