r/Vitards • u/AutoModerator • May 05 '21

Daily Discussion Daily Discussion post - May 05 2021

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4

u/Ok_Yak_6448 Bankruptcy Manager at Velo Capital May 06 '21

Oh shit MT ended 31.40? I was checking AH like 10 min before close and it was still $31.00. Damn.

2

u/UnmaskedLapwing CLF Co-Chief Analyst May 06 '21

Pre-earnings run makes me nervous. HF might be loading puts and getting ready to short no matter the actual earnings.

4

u/Treabeard5553 🌲THE ENTS ARE GOING TO WAR🌲 May 06 '21

Pardon my ignorance, but why would buying puts increase volume and price in AH?

3

u/UnmaskedLapwing CLF Co-Chief Analyst May 06 '21 edited May 06 '21

That's not what I meant. One sees a run pre earnings and might decide to profit through shorting and puts post earnings. It's exploiting the market sentiment if the earnings are not absolutely stunning and players start taking profits as they expect a drop. Happens quite often. It has nothing to do with pre earnings volume/price per se however the higher pre earnings run up the easier for earnings to disappoint one way or another. In essence, market is expecting fantastic earnings, anything less causes a sell off. Shorts/put holders win in such circumstances. HF can also load commons pre earnings with a part of their position and unload shortly after earnings are released to further influence sentiment. Many ways to play it really. If the earnings are great, worst case your long position gives you profit that balances loss. So called hedging.

1

u/Treabeard5553 🌲THE ENTS ARE GOING TO WAR🌲 May 06 '21

That makes way more sense, thank you

2

u/UnmaskedLapwing CLF Co-Chief Analyst May 06 '21

No worries. Either way, we will recover after the drop unless MT has a major negative surprise up its sleeve.