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The original was posted on /r/Superstonk by /u/GiraffeStyle on 2024-07-07 15:10:50+00:00.

TL;DR

I will only be purchasing shares via weekly, deep ITM options (At least $10 under current price). This will force delta hedging during the week as well as a T+1 locate when I exercise at the close of business on Friday. I believe this will more than offset the additional premium cost (which will be minimal at deep ITM).

Why?

I believe that delta hedging is the primary driver of all price action in the current trading day. A secondary driver would be LIT, trading, which is purposely skewed towards sell side. The only other drivers I believe play a factor are past trading events such as FTD’s from high volume days (which can spread out along 35 days but sometimes fall on the last day) or high volume buys (like RC’s / DFV’s, which also can be spread along 35 days but seem to fall on the last day).

How did you arrive at this conclusion?

We all know that ~50% of share purchases go through the OTC, which get internalized and do not result in true price discovery. This allows MM’s / Shorts to kick the can down the road to buy at a better time (for them) to minimize positive price action.

Most of you may also know that options truly drive price action in the market. The best traders I know use Gamma Exposure GEX and Volatility Skew to map out support, resistances, entries and exits.

An oversimplified view of MM’s Delta Hedging mechanics involves buying shares as more calls are ITM / puts are OTM and selling shares as calls are OTM / puts are ITM, with this effect accelerating into expiry due to Gamma.

What options are you buying?

I will only be purchasing deep ITM weekly calls (~$10-$15 strike) instead of purchasing shares. I normally purchase shares in 100 lots anyways, so the only difference will be that my buy will end up debiting my account at COB Friday instead of the actual trading day that I place the order.

Besides these options, I also have longer dated ITM and ATM calls that I am planning to sell / exercise during any upcoming spikes.

Conclusion

I am tired of my buys being internalized, I want to to be applying pressure towards true price discovery. I also believe that the more options get exercised, the more hedging will be done by MM’s, further driving positive price action.

I am sharing what I am doing as an individual investor, why I am doing it, and how I believe it will positively impact price action and overall pressure on short sellers. This isn’t financial advice for anyone else.