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gATERheads,
I've been digging through the options chains and making spreadsheets so you guys can see what I'm seeing. I'm going to update this DD later this afternoon if you want to check back in.
**Edit: Some of you guys are putting way too much into the Ortex data. I don't quite understand what happened with Ortex but I just heard back from the Investor Relations team from ATER so hopefully I will be able to report the actual facts. **See further down in the post for update (2:16pm)
I can tell you that ATER has FTD's piling up, an options chain that is bursting, and a company trying to eliminate debt. The bear thesis is disappearing and you don't need 60% shorted free float to move up when you have a gamma ramp sitting in front of you.
Options Chains: Juicy as Fuck
Key:
Dark Red is Volume/Open Interest
Red = Open Interest (How many contracts are still open (1 Contract is = 100 shares)
Green = Notable Grouping of Call Open Interest
Black= Puts Volume and Open Interest
Light Grey = Puts Open Interest
Blue = Very Interesting Groupings
So what am I seeing???
Ok, so there are 25,737 Calls Options that are "In The Money" right now at 12.50 with a SHIT TON of OTM Call options above its head VS. 6,860 Put contracts ITM.
You might wonder, how is ATER not taking off with that lopsided of a ITM imbalance? There is a almost 4 to 1 Call to Put ratio
3.75C/P Ratio
Utilization is around 99.74%
The more Retail is buying and holding, the more dangerous ATER is becoming.
Are the market makers / CBOE properly Delta Hedging?
Based off what I'm seeing, I think the MM are rolling the dice on ATER. FTD's are increasing, there is clearly an imbalance in the Calls to Puts ratio, and if the Volume /Traffic of buy volume continues to increase.....the Market Makers (MM) could be in serious trouble. They are banking on being able to scare retail out. If retail buys and holds, ATER can get really scary for them.
2021-10-15
25746Calls ITM
73477Calls OTM
6860Puts ITM
30596Puts OTM
3.75C/P Ratio
20444(79%)Calls ITM @ $15.0
Interesting thing is at some point these Market Makers are going to have to either start hedging all these ITM calls or run the risk of being exposed. If ATER can get over $15 and stay up, the chances of a Gamma Squeeze go up exponentially. Just remember if you are playing options, Deeper ITM Strikes are better than OTM strikes. Not advice but letting people know.
So Hedge Funds shorting this know that they need to push the stock under $12.5 this week or another 1.1 million shares will need to be hedged. I expect them to desperately try to get the price under $12.5. If they can't, they start getting in deep trouble the higher this moves.....
Zacks wrote an Article about "Do ATER options Traders know something we don't" last Friday.
How do they keep dropping the Price?
They have increased using more Dark Pools the last couple of weeks and bought two sets of Put's for $12.50 for about 3319 Contracts for 10/15 Expiry to try to drop the price. Look at the time stamp, and those big Red Bars starting at 9:37AM
Shorts needed to kill momentum on ATER before it got ugly this morning.
Ortex:
VS Last Friday
This was Ortex Numbers from Friday
- 61.87% of the entire Free Float is shorted
- They have already shorted 2.10 Million shares just today to try to keep the price down
- That means 14.24 million shares are sold short currently.
- Cost to Borrow has been shooting through the roof. Average Cost To Borrow 203.17%
- Utilization is 97.44% of 100%.
**********************************************************************************************************
Spoke to Aterian's Investor Relations
- ****So this already happened last week, so if you are freaking out what will happen to ATER, this event already happened and we are still up making higher lows which is bullish off the strengthened new term/balance sheet ***\*
What we read was correct, the ATER Float was increased by approximately 9 million shares last week to pay down $66.3 million plus accrued/unpaid interest in outstanding secured term debt to High Trail. They have reduced the structure/amount to $25 million which is now mature in April 2023 and financial covenants are now more favorable than the last loan.
People seem to keep getting something confused. This was not an ATM offering but an arrangement for a fixed price for those 9 Million shares.
****Amazingly, the float increasing really did not have this horrible effect by the way of dilution. They eliminated debt and got better terms. This move actually strengthens the balance sheet and didn't kill the share price.
Shorts are still borrowing double what they are returning. ATER still has a low Float and the Cost to Borrow fees keep rising. Why??? This is because they have so many Failures to Deliver stacking up. The stock is still on the Reg SHO Threshold List and has been for days/weeks.
http://www.nasdaqtrader.com/trader.aspx?id=regshothreshold
Flag : Provided when the number of a security's shares represented in short positions is 10,000 shares or more and 0.5% or greater of the Total Shares Outstanding (TSO), for 5 consecutive settlement days or more, then the security becomes "restricted," and is subject to mandatory close-out requirements for short sales as outlined in the SEC's Regulation SHO.
FTD's
TLDR: Ok, what we know is that Market Makers somehow have not started to Delta Hedge the options chains at this point for the call side. We are at almost 4 to 1 Call to Puts (ITM) Ratio imbalance and over 2.5X imbalance on the OTM Calls to Puts.
They are still continuing to short the shit out of the stock and buy ITM / OTM Put contracts to lower the price. I called out early today they were going to attack the 12.50 Price and that's what they are doing into this close.
Iām interested to see the latest FTD data at the end of this month
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