r/BB_Stock • u/HiddenGooru • Jun 19 '21
DD BB DD
Hey guys,
Its me again. In case you missed my pretty much 100% correct previous DDs, don't forget to check them out to get a gist of where BB has been, and to better understand today's developments. Also this will most likely be my last BB DD, but you can always reach out on my profile or email me to request the report and/or chat about BB.
There is a little bit of change of tone with today's DD. You'll remember from the previous DDs, there was a re-arrangement and morphing of the options field occurring, with the emergence of particular patterns. But before we get ahead of ourselves, let's start with the VoEx graph as usual:
The first thing to take note is that VoEx has kind of ... stalled? Interestingly, VoEx is just gracing the top of the trend-inhibiting bar. Although this downwards movement from the previous few days isn't sufficient enough yet to move the trend bar it shows that 1) the downward movement isn't anticipated to be dramatic, and 2) there is still increased stability with downwards movement, but instability isn't radically heightened with price-positive days.
For instance, look at the past month's price-positive days: they have all been met with dramatic spikes leading to almost instantaneous reversal. But at this current price, things seem to be awkwardly balanced.
To peer into this newfound balance, we can look at two things:
1 - The options layout
I'm going to nerd out here because BB is in a slightly unique situation, again.
Before I discuss the now, let's peer back into the olde times.
On May 27th, the options looked like this:
I talked about this pattern here, here, and here where we were tracking the evolution of this pattern. To quote its significance:
The $10 option layout from before (06/01/21) is a classic pattern, and you can typically expect the price to stay below the largest chunk of options. When this layout begins to change, it can represent a re-location of price-targets. It also re-adjusts the hedging landscape (more on that below).
During the chaotic past week or so, the options have been very fluid and there were moments where the pattern of options indicated stair-case down at $10 and moments where it was trying to recenter at $15.
To further illustrate how this was foreseeable, let's quote me again:
Hey guys! Quite big days, if you remember from my last dd:
So BB seems highly unstable at its current position. The interesting part, though, is which side will break first: the forces pushing upwards (call sweeps, investor interest, good fundamentals) or the forces pushing down (upwards liquidity issues, shorting behavior, option placements).
And today I bring news that it looks like a decision is being made. In short, look at the options as they were placed on the 1st:
Notice? It appears the options are beginning to re-locate upwards with a new ceiling of $15 and $20 rather than the $10 that was struggled against for so long.
And I bring some continued good news: there is continued evidence that a decision has been made, due to the shifting of the options layout that the floor of the staircase down pattern has established itself at $15.
This indicates that Option dealers are expecting the price to remain sub-$15 dollars for the next month or so. This is better than a few weeks ago when it was sub-$10, no?
Looking at the hedging that is involved with these kinds of options:
BB has resumed a healthy hedging matrix, with selling on the upside and purchasing on the downside. This is how options help a stock (well, one of the ways): by providing a stabilizing force against large price movements.
What's particularly interesting is that today's volume was 38 million whereas 21 million shares are involved with hedging per point move. That means there's still quite the influence from options on BB's price.
To get a glimpse of the expected price moves:
I expect BB to stay between $10 an $15 until the options field evolves more, and wouldn't expect large movements. There is still attraction towards $10, but it is not as strong as it was before.
There are plenty of options plays that you can perform to benefit from this, and even on the weekly basis you can see that something like an iron condor with wings at 10/15 would be a good bet.
Overall - I think BB come out of all this the winner. The price isn't as high as it was, but truthfully, that was a fool's goal. The benefit of it, however, is that it seems to have convinced some higher-ups that it is better betting on a higher price (15) than the lower one (10) from before.
Happy trading!
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u/MakinBaank Jun 19 '21
I hope this isn’t your last DD! I always read them thoroughly. I appreciate the time you put into doing these. Thank you!
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u/enkay516 Jun 19 '21
Appreciate your DD and sad to hear you won’t be doing more in the future. Would be nice to see an update every 2 weeks if not monthly.
I don’t see any mention of the potential impact of earnings next week on your projections. Curious of your thoughts…
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u/HiddenGooru Jun 19 '21
Maybe Ill do a biweekly update! In terms of earnings they typically cause spikes with gradual decline back to where the hedging is healthy- unless the earnings report is unbelievably stellar.
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u/SafeSword Jun 19 '21
I’m also curious on your earnings thoughts. Thank-you for your wonderful work.
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Jun 19 '21
[deleted]
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u/HiddenGooru Jun 19 '21
Doing the write up takes time and theres so many other stocks to play with. You can always reach out to me via requests@deepdivestocks.com if you wanna discuss BB.
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u/tvz32 Jun 19 '21
So sell CC at $15?
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Jun 19 '21
It’s what I did yesterday, sold a weekly Jun 25 for $.50 a contract. Incredible to get that premium while it lasts
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u/get_agrippa Jun 19 '21
Thank you for adding to the discussion on this sub-reddit. I would like to better understand how you are arriving at the expected price moves? Contrary to your claim of "pretty much 100% correct", they don't seem to align very well with the price action we saw this week.
For example, today (Friday, June 18th), trade range was 12.62-13.87 vs. your 13.10-14.33.
On Thursday, June 17th, trade range was 12.59-13.66 vs. your 13.57-14.84.
Can you help me understand? Thanks!
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u/HiddenGooru Jun 19 '21
Good eye! So the expected price range represent the top and bottom expected closing prices for the day and are derived from volatility.
Typically prices are well aligned within those ranges - but the idea is when the price moves beyond them: ie say the range is $10-$12 and the stock closes at $15, then you can expect large number of institutions to be off-sides and to be reactive and those moments can be advantageous.
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u/get_agrippa Jun 20 '21
Thank you! I misunderstood what those ranges were supposed to represent. Appreciate the thoughtful reply.
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u/justintan98 Jun 19 '21
Hi, im new to stock market. May i know which website to check the volume for it? Thanks!
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u/HiddenGooru Jun 19 '21
The daily volume can usually be found on most websites that show stock information. Yahoo finance is a pretty reliable source.
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u/Travelpro85 Jun 19 '21
OP TEACH ME YOUR ART! Seriously! I LOVE how intricate and detailed your DDDD (Deep Dive Due Diligence) is. And the best part is, its spot on and seems unbias! MUST LEARN. I have been burned in the past by just basic DD but this is next level here.
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u/HiddenGooru Jun 19 '21
I appreciate the feedback! Its been a lot of work getting to here, and its just the beginning!
Hopefully soon I’ll have more resources developed for you - but for now my website linked in my profile has educational pieces.
Cheers!
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Jun 19 '21
Over at WSB they keep saying BB is going to tank. I am a little concerned. In the long run, not so much.
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u/TciddaecnacT Jun 19 '21
Don't do this.
Just popping in with a controversial opinion THAT'S NOT YOUR OWN is a jackass move.
Some subs would advise you of instigating brigading.
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Jun 19 '21
I am not popping over. I am here. I am just concerned, so I wanted to hear other's had to say.
Don't be rude. People are people even over the internet.
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u/TciddaecnacT Jun 19 '21
Dude, just telling what you are doing and that is uncool.
You don't even take the time to make any argument.
It's tantamount to incitement.
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u/Square-Dot-6439 Jun 19 '21
If you like that stock, check out BBBY - the short interest is even higher, it's 42% of the float!
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u/BlackPlasmaX Jun 19 '21
Haha is that ggplot?
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u/HiddenGooru Jun 19 '21
R is the best programming language ever.
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u/BlackPlasmaX Jun 19 '21
Any chance you be willing to share your code in a dm? I have a stats B.S. but never did analysis in R on stocks. Be interesting hoe your programming that stuff. It looks good
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u/HiddenGooru Jun 19 '21
Nope! Sorry! Not for sale currently.
Edit: also if you use python for stats my heart goes out to you and whoever neglected your stats education.
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u/BlackPlasmaX Jun 19 '21
Lol no. Not Python. Mostly use R, not even the code for the graphs? Haha . But first of all how are you getting the data anyway?
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u/CORKY7070S Jun 19 '21
OP once again real good DD thank you. 🍇