The situation at TSLA deteriorated Friday given a large 6.4% drop and net gamma declined by almost 10M to -12.6M. The stock is now more clearly trading in a negative gamma environment, where potential drops need to be hedged by option dealers by selling futures into weakness, which would further destabilize the chart. At 950 gamma increased by 3.2M to 20M. In case of a sell off this level would pull the price lower first and then act as a potential base from where markets could stabilize and stage a reversal. Good luck tomorrow.
Kommentar
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8:33: SEC Has Opened Investigation Into Tesla (TSLA) Over Whistleblower Claims On Solar Panel Defects
@aboud90, "gamma" cannot predict directional movements but rather give you a accurate picture whether the market is stable or not.
aboud90
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@GammaLab, thanks for your support What is gamma measuring ? Liquidity ?
GammaLab
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@aboud90, yes, exactly. Positive gamma = dealers sell into strength/buy into weakness = more liquidity. Negative gamma = dealers sells into weakness/buy into strength = less liquidity.
SabahEquityResearch
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here is the roadmap for TSLA based on EW theory
Turboweasel993
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Great information. I am watching this ticker closely. Your thesis seems very sound regarding the gamma levels. I will let you know how tomorrow plays out for me. I’m going in
GammaLab
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@Turboweasel993, please see my answer to another question above. I am not claiming to be able to predict directional movements or reversals, nobody can. Also, when I use terminology like "support", those levels are no way as rigid as technical analysis would suggest, so be careful.