January 10 Update:
Preliminary proxy filed. Also we saw no filings from the other backstop investors to confirm any sales from the December run which would’ve been due today.
Why do we care?
From the proxy, we learned that it is very very unlikely that the merger will occur before Jan opex, which is bullish. (Remember that after the merger, the NAV floor goes away.)
No new filings from the other BIs means they didn’t sell on the previous run to 20+, and implies that they probably cannot/will not sell on our January gamma squeeze, which is bullish.
Just a question in terms of the gamma ramp, as I am quite new to trading and still learning about stuff. For this play to work, hence for the price to skyrocket, do we want all of those ITM options to expire / be exercised?
No, the ITM options do not need to be exercised in order to be hedged.
Also, for the gamma squeeze plays, they always happen before the opex date. In other words, nobody here is holding their contracts to expiration. In theory we should see the hedging (and subsequent gamma squeeze) some time leading up to opex. Conq has mentioned a few times that he is expecting the ESSC move sooner rather than later.
In the case with IRNT, which ESSC is commonly being compared to these days, opex was on Friday 9/17 and my understanding is that hedging started on Wednesday 9/15 afterhours leading into peak at Thursday 9/16 premarket. Although, it looks like there was significant price action on Tuesday 9/14 afterhours as well. Not sure if this hedging occurred throughout multiple days. Maybe someone from the IRNT days could comment.
As we inch closer to “go time”, and especially if you were in the IRNT play like me, I’d like to remind you to not chase the dragon. I know it’s wonderful to think of the possible profits from ESSC running like that of IRNT or SPRT, but we must be realistic.
As this play has been compared closely to IRNT, I’d like to point out that IRNT had two important factors that made it a huge success. Yes, ESSC has a smaller float, and yes it has higher OI but:
IIRC, IRNT had a VERY high short interest rate (~53%) and even though this isn’t a short squeeze play, I think it was a huge tank of gasoline that was added to the fire. ESSC does not have this.
IRNT had a tremendous amount of public visibility compared to ESSC thanks to Conq posting it on WSB who had big influx of members after early 2021. This, I believe, accelerated the play – both in terms of timing and in terms of how high it ran. I don’t believe that this play has the number of eyes that IRNT had on it at the time (at least not now).
To be clear, I’m not saying this play won’t be a success (I’m in it myself), but I think it’s in the community’s best interest to temper its expectations. I don’t want to start sounding like that dude that went off the deep end so I’ll stop here, but I would love to hear what others think on how big this play will be in comparison to the others and/or if you think that the factors I mentioned didn’t actually have an effect on the success of IRNT’s play.
One thing I would recommend to everyone if and when it does pop and you make some massive profits which I think we all will, Be Smart - Keep those profits. Remember how you got here. It is very easy to have a huge win and try and duplicate it and lose it all. Set a budget, focus on good habits. If you need to take a day or two as a cooling period do it.
From the NAV floor to the backstop having to buy shares and the smaller float, I believe this will be better than IRNT. That’s before we look at the stacked OI chain which is a lot more explosive than other gamma plays that we have seen earlier. We also have historical data from the first run so the sentiment will be elevated as the risk/reward from current SP to the previous peak is almost a double up. Now we factor in that the main player that halted the play is out and we have endless possibilities for how high this can go. Would like to hammer down that all the variables mentioned above make this a broken setup; one that does not come around often which is what makes this play special. IRNT is just one example of what a gamma play can look like.I personally am accumulating as much as I can before opex week.
Ugh, added a little but missed my target price for 12.5C and 15C. Should have added when it dipped below 13.50 but I was hoping for another spike downward like we had last week. Oh well, maybe we’ll have a red day before next week…
