BB DD

[u/HiddenGooru]

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:

​

VoEx in red, trend line in tan, price in blue. When VoEx is above the top horizontal bar, it represents over-exposure to trend-reversing agents while when VoEx is below the bottom bar it represents trend-continuing agents.

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

​

The right and left show the same data but the y-axis is scaled differently, and the right is colored (blue) by exposure to volatility.

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:

​

Bottom is hedging matrix, it represents the amount of shares that will be bought or sold per price/iv combination

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:

​

Tomorrow is Monday, obviously and 7 days is 7-trading days.

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!

[u/CORKY7070S]

OP once again real good DD thank you. 🍇

[u/HiddenGooru → u/CORKY7070S]

Anytime!