THCA - The Next Gamma Play or a P&D?

Typing this up quick because there was talk on TF this morning.

This was posted this morning from the guy who “called” ESSC.

However, according to @Tiddly, the float is significantly higher (15M and heavily institutionally held). Tiddly, could you add more detail here.

Further, he is 60% of the 10c OI and nearly all of the 12.5c OI. Not to mention, there’s not nearly enough OI to push a gamma squeeze at this time (assuming the OP’s float calculation is accurate).

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This feels very P&D, not touching it.

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Share price is jumping around on minimal volume and with a big spread. I’m doubtful the float is any bigger than the Reddit post suggests, but we should do some digging.

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Another thing mentioned in TF is that there are Asks set up for all OTM calls for every expiration that are way higher than reasonable (e.g. $20C for 14APR ask at $1.85, but has no OI and no volume and no bid), suggesting that OP is selling covered calls. Could very well not be him, but looks suspicious.

That said, it is up 4% today to $10.84 ($10.99 now), so it could be that some redditors are jumping in and pumping this. Even with low volume it moves quickly, which suggests it could very well have a low float. Even if the float is what the OP says (2.66M shares), that means <10% of the float is ITM, but since this morning there has been 2400 volume on the 12.5C for 14APR. Probably worth watching this one, but definitely could get rug-pulled if OP continues to hold a significant % of the OI.

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Here’s a screenshot from the latest filing regarding the redemptions. The numbers seem to check out

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Such a low volume tho. It barely has any bids right now.

I’d say give it a few days to see if any OI accumulates before putting any significant dollars in. OP insisted on Reddit that he’s not pumping and dumping and isn’t selling the high Ask CCs, but what would we expect? It’s on my watchlist for now, we will see what it does, if anything.

Today’s volume (186k) is already almost 4x the average volume of about 50k. So if that volume continues higher, it could definitely push the share price up.

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For those watching the run-up now, please read this from SST’s initial pump and think carefully before jumping in now that IV is high and the options are up 250% today alone.

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Looks like ESSC moved in sympathy during the morning spike. Might not be a bad idea to buy some ESSC (very close to NAV atm) for any sympathy run-ups. I guess old habits die hard.

What would be, if there is one, a reasonable assumption on how volume translates to open interest the next day? I just looked and see it pumped above 11 again and volume on the 10 and 12.5 is close to 5 and 14k. Just wondering to see if in the next couple of days/into next week you see similar volume then decide “ok with this volume I bet we’ll have x open interest in x strikes covering the float”. I guess this would just be beneficial to have an idea for future plays as well since this obviously could go nowhere.

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I think you have to infer it from the price changes on the options/underlying. As in, if there was just one volume on the 12.5C and the price went up, you know that will translate to open interest. But if there’s two volume and the price didn’t change, that’s probably a buy and a sell, so there’s 0 OI.

I don’t think there’s a reliable way to anticipate how the volume translates to OI. You just have to wait until the next day. I would assume if the price of the option is increasing, then that means OI is accumulating, but I could be wrong there.

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I think you got the wrong guy in your mention. I’ve been on an Anti-PTON crusade for 2 weeks and mentioned that is mostly held by institutions.

To me, this needs more players to make it look less like a P&D. Eventually all these plays end up being a game of hot potato between retail, seeing who’ll sell off and who’s left holding the bag.

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I bought 4 12.5 calls out of boredom at open and miss the ol days of squeezes (pnd), sold 2 at 120% so just free rolling now. Gonna look more into it tonight

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Wow the flows.

2.6M call prem to 14.6K put prem…
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Let’s see how the OI is tomorrow. Although we won’t know how many are Sell To Open.

Front-loading is pretty clear:

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looks like the 12.5 have 10.3k OI and the 10’s didn’t move much. Lots of volume on the 12.5s already but like you said not sure about sell to open and its concerning but helpful seeing that it was clearly front loaded. Obviously could be a P&D that turns into a gamma regardless or someone is happy with their gains and dips out soon lol.

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Applying what we have seen on ESSC, the 10c OI will probably only build when the share price stays close to $11 (or below). If it’s going to bounce between $10.95 and $11.70, like it did yesterday, the 10c might be too tempting to scalp. E.g., I accounted for probably 700 in volume yesterday but only 120 in new OI.

What this might need is some static price action for a while.

PuzzleHeaded (on Reddit) has clearly frontloaded this thing in the same way he did on ESSC 1.0. I do expect him to dump at some point (without telling anyone, or course), but likely closer to opex.

Right now this is probably just a wait-and-see how the 10c OI builds. Remember that ESSC “3.0” at one point was shaping up to have more OI than either 1.0 and 2.0, but it never ended up going anywhere and OI started falling off about 10 days before opex.

I’m currently holding 120 10c for April at 0.81 average, and 100 10c for May at 0.94 average.

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OI doesnt have much of a Foundation on the 10c but pretty large on the 12.5c.

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So I just spent some time combing through the SEC filings and there is a total of 15m shares offered. 9,429,178 are held by insiders and institutions that make up the “locked up” shares, which is 62.86% of the total issued shares, leaving 5,570,822 for the free float.

SST ran to 17 after this though, tough call

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There isn’t enough ITM OI for a gamma squeeze, so you’re buying in 100% for a pump. IV has come back down today, so it could be a good entry. However, it could also fall back to $10.70 / $11 (or all the way to NAV).

It’s a gamble, so just know what you’re getting into and be prepared to lose whatever you put in.

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Wouldn’t you think a rug pull is coming anyday now and puts might be the play here?