Have you succumbed to that dreaded case of FOMO? Are you prepared to join the trading revolution of meme stocks and get a holding in AMC or GameStop (GME)? A little more background is required before you can move on.
The Stonk-O-Tracker, a website designed to monitor the two most widely traded meme stocks, is recommended by some.
There is some disagreement about how reliable the tool is, so you shouldn’t count on it as a panacea for guaranteed profits. In this article, we’ll take a closer look at the Stonk-O-Tracker to see what it is, what it can tell us, and whether or not using it can increase your income.
What is Stonk-O-Tracker?
Someone (presumably a Redditor) realized the need for a central location to store information about AMC and GME shows, so they created the Stonk-O-Tracker. The site features investor-relevant information, with a primary focus on the latest market short positions.
Data such as the current NYSE price, the Short Sale Restriction (SSE) threshold, trading volume, borrowed ETF shares up to the minute, and daily options data are all included.
If it sounds too complicated, don’t worry; we’ll explain how to interpret each statistic in more detail below.
Where Did the Stonk-O-Tracker Come From?
The simple explanation for the origin of the Stonk-O-Tracker is a retail trader’s desire to provide timely data on two of the most-searched stocks on the web. But, why do we need AMC and GME? The roots of that tale run deeper.
Meme shares
In 2020, as smartphone apps like Robinhood and WealthSimple made investing accessible to regular people, some brands and firms gained cult followings among those looking for market opportunities.
These stocks, which included AMC and GameStop, earned the moniker “meme stocks” because they were widely discussed by inexperienced investors on social media sites like Reddit.
AMC and GameStop have maintained a strong degree of interest even though most meme stocks have subsequently fallen into history, in part owing to the involvement of high-profile investors like Elon Musk and Ryan Cohen.
Short squeeze
Due to the short bets made by multiple hedge funds, effectively wagering that the legacy media businesses would fail, the social media juggernaut took notice of these two equities in particular.
Two of the most shorted companies on Wall Street were GameStop (a video game retailer with a nostalgic tie to many of the internet’s most famous speakers) and AMC (a movie theater operator with a similar relationship).
Without getting into the specifics of how AMC and GME became ideal targets for the internet mob trying to “strike back” (for more information, see investor Keith Gill), there was suddenly a huge demand for breaking news about the companies.
Here to keep prospective investors informed is the Stonk-O-Tracker (the first word being a slang term for stocks that evolved alongside the r/wallstreetbets Subreddit).
The Stonk-O-Tracker: How to Read It.
It can be confusing to the average investor with a trading account of roughly $1,500 who is not able to keep up with every trend or statistic.
Before we get into the specifics, it’s important to note that there’s been a lot of discussion about whether or not the Stonk-O-Tracker is always accurate and that even if it is, investors should strive to obtain a deeper grasp of the numbers before putting down serious cash.
Even if you’ve been to the site before, getting started can be a challenge. Let’s dissect some of the most important tables and describe the data they include.
Share price and SSR
At the very top of the page, you’ll notice three digits. The first is the present trading price on the New York Stock Exchange (NYSE) and the variation from the previous trading day. The price as it appears on Germany’s primary stock market, the Frankfurt Stock Exchange (FRA), is shown on the right.
The SSR Trigger Price is the middle number. This abbreviation refers to the NYSE’s Short Selling Restriction, a built-in mechanism that prevents short selling on a certain day if the stock price is already heading downward. The previous day’s closing price serves as the reference, therefore this level is 10% lower than that.
If AMC’s price fell below $14.40 on Wednesday during regular trading hours after closing at $16 on Tuesday, it would be removed from the SSR list and shorting would be prohibited until the conclusion of the following trading day. This is useful when dealing with notoriously unpredictable equities.
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Trading Volume
Trading volume figures are displayed every 30 minutes on the homepage, with minute-by-minute data also available. This can be a helpful indicator of market activity since it provides investors with a sense of the volume of trading in a particular stock.
A quick increase in volume, for instance, could signal that a stock is going to make a significant shift.
Borrowed shares
The following table details the total number of shortable shares. According to the site, the middle figure provides insight into whether or not the company is being heavily shorted at any given time based on data provided by Interactive Brokers. If the figure starts to go down, then indicates an increase in short holdings.
Option data
Here you will discover information on calls and puts. Each contract’s expiration date is displayed, as is the option’s financial status: In The Money (ITM) or Out Of The Money (OTM) (OTM).
One definition of a call is an investor’s promise to purchase stock at a predetermined price and date in the future. The call is In-The-Money (ITM) if the stock price is higher than the strike price on the expiration date.
Conversely, a put is a wager that the future value of a stock will be less than the strike price.
Apart from the removal of the Dark Pool percentage, the remaining tables on the site are fairly self-explanatory. Such information sought to estimate the volume of private trades involving shares of stock.
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Can You Make Money with The Stonk-O-Tracker?
Information from Stonk-O-Tracker can be interpreted however the user sees fit, in contrast to the “buy the dip” cliche which encourages inexperienced retail investors to adopt an overly simplistic strategy. It’s useful for anyone making a deal, but especially those interested in AMC and GME investments.
Anyone intending to make a sizable investment should not rely on it as their only source of information. If you’re thinking about investing on your own in companies like GME or AMC, you might want to learn more about self-directed individual retirement accounts (SDIRAs), which provide a tax-free or tax-deferred way to do so. Make sure you are not gambling with money you can’t afford to lose before investing in the stock market.