Gamestop Round 2? How An Options-Buying Frenzy Is Providing Another Jolt To Meme Stocks

[Option Beast]( 02/27/2021   |   [View in browser]( --------------------------------------------------------------- [Gamestop Round 2? How An Options-Buying Frenzy Is Providing Another Jolt To Meme Stocks]( Another options-fueled buying frenzy appeared to be sending shares of GameStop Corp. and other "meme" stocks soaring on Thursday. But unlike last month's market-rattling move, it wasn't clear that individual investors were the primary driver. The primary mechanism, however, appeared largely the same. A surge in purchases of GameStop call options, centered on those with a strike price of $60 and due to expire at the end of the week, was seen late Wednesday afternoon, said Gust Kepler, chief executive of BlackBoxStocks, a stock-and-options analytics and social platform. That triggered an alert sent by BlackBoxStocks at 3:27 p.m. Eastern, he said. Another alert was triggered early Thursday by heavy interest in calls with a $125 strike price. The company tracks options buying activity, with an eye toward large institutional buyers. Concerted activity by individual investors can also be picked up as brokers, which are part of the institutional universe, move to fill orders. The recent activity appeared to likely be a combination of big, professional players as well as individual buyers, Kepler said, in an interview. [More...]( SPONSORED CONTENT [[Exposed] What Pro Option Traders Don't Want You To Know...]( The pros want you to believe that options trading has to be risky. But a careful and caution engineer figured out a way nearly anyone can trade options SAFELY. Free guide reveals the step by step system: [Click here to get this FREE guide before it's too late.]( [REFLECTIONS.... The Bull Stays Strong by David Sager](#) Investors are betting the U.S. economy will rev-up in the coming months. The economic data underscores the market's apparent conviction that a rapid recovery is underway and building momentum; fueling more optimism for the coming year. Investors dumped government bonds and streamed into shares of economically sensitive companies (forgotten for months), betting that the U.S. economy will accelerate in the coming months. As businesses reopen across the nation sparking commerce, shades of 'normalcy' will shine again. On Thursday, January sales jumped 5.3% from December, handily beating expectations. Shares of small companies and sectors of the market like financial and energy, notched strong gains. The jump in bond yields comes as the economy is stroked by enthusiasm about a speedy return to economic health. JPMorgan strategists said Friday that they expect consumers to shatter expectations for the rest of the year. Meanwhile Federal Reserve Bank of Boston President, Eric Rosengren said he expects the economy to pick up steam as vaccines are distributed. The Dow Jones Industrial Average rose 35.92 points or 0.11% to 31,494.32 this past week. The S&P 500 slipped 0.71% to 3901 and the Nasdaq Composite lost 1.57% to 13,874- with the techs cooling off a bit. Lastly, the Russell 2000 Index of small businesses gained 48.30 points or a healthy 2.2%. In the bond market the yield on the 10 year Treasury note rose to 1.344% from 1.286% on Thursday. Yields rise as bond prices fall. "The market is painting a picture of optimism: strong growth and rising, but not troublesome inflation. We agree," BofA Securities U.S. economist Michelle Meyer--who sees GDP growing by 6% in 2021--wrote on Friday. Marijuana stocks are on fire, pushing many past what analysts say they are 'worth.' With a new Democratic president and congress, the future ahead for North America's cannabis stocks looks extremely promising. In the U.S Senate, Majority Leader Chuck Schumer and other top Democratic lawmakers this month gave signals to openness to 'tearing down pot prohibitions.' U.S. legalization, analysts say is 'far away.' "I'm not sure the first fight will be cannabis," said Mitch Baruchowitz, managing partner at Mereida Capital, who follows marijuana stocks. "I don't think bills always take the shape people think they will. Our government tends to negotiate a lot." Most all of the Canadian producers, which represent the bulk of marijuana stocks trading on U.S. exchanges, will be looking to cultivate big opportunities in the U.S.--to off set struggles at home. A Bit Of Bitcoin.....Tesla's CEO, Elon Musk is talking about the automaker's Bitcoin purchase last week. In response to a comment from Binance CEO Chengpeng Zhao, (he called Tesla's $1.5 billion Bitcoin purchase "adventurous" for a S.&P. 500 company,) Musk tweeted that Tesla"s Bitcoin purchase "is not directly reflective" of his opinion. He said owning Bitcoin is simply less dumb than holding cash," and added Tesla's Bitcoin bet was "adventourous enough for an S&P 500 company. The CEO also said that he isn't an investor, he is an engineer and doesn't even own any publicly traded stock aside from Tesla." He added "when fiat currency has negative real interest, only a fool wouldn't look elsewhere. Bitcoin is almost as bad as fiat money. The key word is 'almost.' " Bitcoin continues to move upward, reaching $57,101.49 on February 21,2021, giving it a total value of over one trillion dollars. That's very roughly the market value of companies like Samsung or Facebook. As Michael Venuto of Toroso Asset Management said, " (Bitcoin's) price is more or less a meme. It gets people excited but perhaps for all the wrong reasons, preventing them from going down the rabbit hole." Maybe we will find out how deep the 'hole' is! Stronger Oil, Stronger Gas Prices.....Oil prices rise to near one year highs as vaccines roll out, stimulus is on the horizon and Saudi production cuts phase in, all huge influencing factors in the 'balancing' of oil. It's a remarkable turnaround for oil prices, after demand tanked during the coronavirus lockdowns, causing the WTI price to fall into negative territory for the first time since the spring of 2020. The market is now looking past the Covid-19 pandemic and well into next year. The hope is by then vaccines will have allowed some form of 'normalcy' to resume, boosting demand for energy. Saudi Arabia's pledge to cut output by one million barrels a day in February and March has 'put a floor' under oil prices. According to the American Petroleum Institute on Tuesday, demand was 'buoyant.' Oil stocks dropped by 5.8 million barrels last week, while analysts had expected a fall of 2.3 million barrels. "Crude oil has been on a tear," said Marrios Hadjikyriacos, investment analyst at trading platform XM. "It seems that the US spending extravaganza and the Saudi Arabia slashing its crude production in the coming months have more than offset European demand fears, propelling crude above its pre-pandemic levels." The general feeling among the oil analysts and specialists is that oil will 'settle' in the $60.00 to $65.00 range boosting gasoline prices in the area of $2.50 to $2.75 in the near to long term. RUMBLINGS ON THE STREET Vlad Tenev, Robinhood CEO, in congressional testimony, Barron's "I'm not going to say we did everything perfect and that we haven't made mistakes... But what I commit to is making sure we improve from this." Kiran Ganesh. A multi asset strategist at UBS Global Wealth Management, WSJ "A main driver for equity markets over the past few months has been a lack of competition," Mr. Ganesh said. "If yields rise, then we could see some people rotating away from growth names and toward credit or bonds." Arthur van Slooten, global asset allocation strategist at Societe Generale, WSJ "Investors are taking a little bit of a pause," said Mr. van Slooten. "We believe there is further to go. When the reflation trade is back on and there is more confidence about this, we'll see a continuation of the market performance that we've had in recent weeks," he added. Jim Vogel, interest rates strategist at FHN Financial, WSJ "The reflation trade has moved past fundamentals and has just become a large macro secular reflation trade that appears to ignore any of the standard cyclical inflation factors," said Mr. Vogel. With the so-called reflation trade, investors bet that the economy will rebound quickly, sparking higher inflation and rising yields. [An Investor's Guide to Options Trading Levels]( The combination of $0 commissions at most brokerage firms downtime from the pandemic and those stimulus checks has prompted millions of people to start investing for the first time. Many of those new investors, as well as many more experienced investors are also dipping a toe into the options market for the first time. However, unlike stock trading, options trading requires your broker to enable special permissions on your account, and even after you're approved to trade options, what you're allowed to do can still be limited. This tiered system is designed to protect investors from taking on risks they can't afford, don't understand, or both. Each broker has their own system of defining these levels and approving investors to use them, but there are similarities between them. Most trading platforms have between three and five tiers for options trading. Level 1 requires the least amount of experience and the highest level typically reserved for experienced options traders with healthy account balance. Robinhood, for example, uses a three-level system while Fidelity uses a five-tier system but both have a similar progression in what strategies traders are allowed to use. The breakdown for the levels, no matter the platform, typically goes from least amount of risk to most risky positions. [Article continues...]( [Americans Are Struggling, But You'd Never Know It From Their Credit Scores]( Despite widespread job losses and financial uncertainty, Americans are faring well by most measures during the coronavirus pandemic. Federal relief, such as stimulus checks, expanded unemployment benefits and an extended pause in loan repayments, have even given some a boost. Consumers are paying down debt and saving more than they have in decades. Many are leveraging low interest rates to refinance and lower their monthly bills or catch up on past-due payments. As a result, credit scores, a general measure of credit worthiness, have improved across the board. In July, the average national credit score hit a record 711, according to FICO, the developer of one of the most commonly used scores by lenders. But that's not the whole story. [Click to continue reading this article...]( [Is Covid-19 A Preview Of What Retirement Will Be Like?]( The pandemic has given many folks a taste of what retirement could be like. An abrupt end to work. A loss of social connection. Trying to make ends meet on a much lower income. Many haven't been happy with the experience. Worried that your retirement could be similar? Here are eight lessons we can learn from the pandemic, all drawn from a new book... 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