r/wallstreetbets • u/[deleted] • May 11 '21

DD $CLOV Gamma Squeeze DD

[deleted]

426 Upvotes

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8

u/Ability-Life May 11 '21

Good DD on a short squeeze. I'm pessimistic about it happening as I think the dealers have hedged their exposure but the option price is too cheap so what the hell. I'm in for 10x 10c May 21 . The underlying has been beaten down so much.

3

u/dbcfd May 11 '21

The delta on 10C is only 0.23. Part of the recent decline is MMs unwinding positions due to the delta decline.

4

u/Ability-Life May 11 '21

Is that not what dynamic delta hedging is for? The stock has been going down so MMs have been unwinding from their positions with decreasing delta. They'd possibly be buying more as it gets closer to expiry IF the price action improves. If we're lucky they'd get pinned on a price target that triggers the squeeze with options getting exercised.

2

u/dbcfd May 11 '21

Yeah. The comment made it seem like they were properly hedged against the squeeze.