One of my favorite comments when I started first appearing in media around the dawn of the Gamestop saga (ages ago in internet time, last month in reality) was along the lines of “I honestly didn’t believe you were a real person, I thought your photo was generated from”. It was innocent and on its face almost a compliment; throughout my life, and especially since I started in trading communities, for one reason or another I was always compared to an AI, usually in an assumably-complimentary way.

Much like our ersatz internet hero of the monomyth Keith Gill (the…

So, it’s been a while. This month has been quite surreal. It’s a bit difficult to focus on schoolwork and writing itself when stuff like this happens:

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They definitely not only airbrushed that photo, but also power-washed it.

So this part, the ending part of Options Degenerate Marketplaces, was a bit delayed. Similarly, I did not expect that in the interim, the concept of options dominance and NOPE itself would blow up so heavily.

In the first part, we discussed simply the concept of options dominance, or a market state — which we find ourselves in — which the weight of the options market (measured of course in the hedge ratio…

The great part about being a windbag writer is I know before I even put pen to paper I know that I need to call this ‘Part 1’.

With that out of the way, let’s begin discussing the Net Options Pricing Effect (NOPE), how we got here, and what it might mean for the marketplace.

The Toy Model

The original derivation for NOPE, except for my story about getting high one night and just thinking about it (which actually happened), comes from a situation I call succinctly the Toy Model.

We can imagine for simplicity a universe where all the following conditions…

And we’re back. This week has been legitimately crazy with the Gamestop saga. I’ve taken the self-imposed position of playing financial reporter through the whole charade, including being one of the first to break the news that Robinhood (and, as we found out later, other brokers) was de facto manipulating the price of Gamestop and other meme stocks by refusing to allow new opening of positions (and later, refusing even the purchase of shares over a cap).

That said, a brief recap of Parts 1 and 2 may be in order. In Part 1, I explained how largely due to…

Hello again readers, it’s your favorite snark machine.

It seems the timing of my first post was serendipity, because just as anticipated in the proposed salience-based trading paradigm, we saw some unique fun during Tuesday’s trading session.

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Blockbuster’s back!

Unlike most of my posts, this will veer largely into philosophy and maybe some poorly interpreted behavioral economics. As I have a computer science and business background, this of course qualifies me as a subject expert on both of those topics.

As I’ve mentioned before, I’m fairly new at trading in general — although I’ve invested for many years - which brings both some downsides (a lack of perspective on historical trends) and upsides (potentially a novel lens). However, similar to most of my generation, I am a true native of the internet, learning to type slightly after learning how…

Check out my twitter for more musings on the market: Also, posted originally on reddit at r/thecorporation.

I of course, got a nice Twitter hug for Part 1. To clarify — I do think shorts are being squeezed in Gamestop, although this is auxiliary to the main driver of the stock’s momentum (and not, in my opinion, the primary driver of Friday’s exponential rise).

So okay, let’s go to the obvious question — if hedge fund tears didn’t cause Gamestop to rocket, what did cause it?

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Wew laddy, +71.25% at the peak.

Gamestop in many ways is an extraordinary story, and has all the properties…

Well, unless you were under a few different rocks on Friday, you probably saw this at some point.

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Aww, look at the lil guy go.

Apparently we all decided it’s 2006 again, because the hottest tech stocks around are $GME and $BB. I can’t wait until we can use AIM again and I can break out my Zune. So what’s going on exactly?

If you’ve been anywhere in the trading universe, it’s been partly a meme and partly a higher calling to long $GME since about July/August 2020, when everyone suddenly realized the short interest on $GME actually exceeded its available float. In English, this meant that…

So, these past two weeks are likely an abnormally good period for the NOPE, and our Google Analytics clearly show it. If you’re not familiar with what the NOPE is, I discuss it more in depth here.

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Google Analytics for (run by Sean Geng) — guess when I started tweeting reversions intraday?

I want to start out by clarifying a few things, because nothing could exemplify the 2020s more than misinformation spreading unchecked.

Let’s start with a bit about myself. I am not a finance person; in fact, by my own admission, I started trading when the zeitgeist got hot around late April 2020. …

Most of us implicitly know what liquidity is, or at least we pretend to mostly to sound smart during Thanksgiving when we hide our lifetime profit-and-loss from family members who look up to us as the ‘investor’ (“she knows stocks”).

Liquidity, for a more bookish definition, is the ability to sell or buy some asset (in the future the only asset will be bitcoin, for instance) without changing the market price much. This is intuitive when you think about it — when you sell that one AAPL stock you bought at $135 when AAPL later hit $105, you didn’t actually…

Nope, it's Lily

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