Chapter 228: The Threshold
Negative Gamma Section
The negative gamma section refers to an ‘acceleration section’ where the more an options dealer hedges, the larger the hedge needs to be.
When someone buys a large number of call options, the dealer takes the opposite position (selling calls).
To reduce risk in this process, the dealer must buy the underlying asset to balance the delta. Since the delta increases as the stock price rises, even a small increase requires the dealer to buy more stock.
When the dealer’s ‘forced buying’ drives the price up, those who are already short must rush to cover their positions.
However, if supply is locked up, the number of buyers increases while the number of sellers decreases, creating an asymmetry.
And this is exactly the trigger for a short squeeze.
Golden Edge Main Floor
Just past lunchtime, the ticker on the board flickered like the second hand of a clock.
“Call volume is unusual,” said Sarah Morgan, pointing to the red dots on the options board one by one.
“Someone is quickly buying call options across various expiration dates and strike prices.”
Lionel, listening, shrugged as if it were nothing.
“Probably some moths drawn to the flame of a technical rebound.”
Over the past few months, the stock price had fallen relentlessly, and now individual investors were starting to gather, expecting a rebound.
Then Vincent Crowe, Director of Macro Strategy, handed over a document.
“We just received an announcement from Dojin stating they will not sell their B-class shares under any circumstances.”
The corners of Lionel’s mouth twisted upward.
“A last-ditch effort.”
He believed the chances of Leviathan’s success were close to ‘zero.’
He had even commissioned an independent review, just in case, but as in the photos Merkx had shown, Leviathan still had no landing legs.
Even if they started building them now, it was physically and temporally impossible.
Sarah spoke cautiously, with a hint of concern.
“Still, with these calls being placed, dealers’ delta hedging could bring in buying of the underlying asset. If the stock price starts to turn upward…”
“Don’t overthink it. We’ll just push it down before that happens!”
Lionel cut her off.
“Add more puts to lock volatility downward. Once it breaks below $10, retail investors’ morale will crumble too.”
Those who bought call options would then have no choice but to cut their losses and close their positions.
“How should we enter the puts?”
“Increase exposure in the ATM and -10%, -20% ranges, and spread the expirations across weekly and monthly options to force dealers to use negative gamma ‘downward.’”
“Understood.”
Sarah Morgan immediately took action.
As they began buying a large volume of put options, the market reacted instantly.
Dealers started selling the underlying asset to hedge, and a wave of short-selling followed.
The order book quickly emptied.
DJFT: $10.42 ▼-7.1%
CTB: 23.1% | Utilization: 88% | Days-to-Cover: 5.6d
Lionel smiled with satisfaction as he looked at the board.
“With enough liquidity, exiting won’t be a problem.”
At 14:37, five consecutive sell ticks collapsed in an instant.
Lionel slammed his fist on the desk and shouted,
“Push it down!”
A series of ‘market’ sell orders.
Electronic sounds overlapped.
DJFT: $10.07 ▼-9.8%
New intraday low
The ticker flickered and cut out, and the remaining buy orders hesitated before pouring in once more.
Algorithmic rebalancing triggered automatic stop-loss orders from institutions.
“It looks like the psychological resistance level of $10 is about to break.”
As Sarah shouted, the stock price on the board dropped from two digits to one.
DJFT: $9.98 ▼-11.5%
“Whoaaaaa!”
Cheers erupted from one side of the floor.
Sarah continued to report the situation.
“The options skew is widening further. Put IV is +41%p compared to ATM.”
This meant a 41% premium was attached to the put options.
Lionel raised his coffee cup and said casually,
“Feels like it drops 1% with every sip.”
He was thoroughly enjoying the situation.
Every time he moved the market, countless investors shed tears of frustration.
It felt as if he had become all-powerful.
Then, a new crawl appeared at the bottom of the board.
[KTalk Feed] - @Kang Tae-joon | Followers: 142,913,137
Data Briefing 2nd
Turbo Pump Bearing Reading Map, Heat Fatigue Limit (Attachment #1)
ECR ΔP Long-term Operation Stabilization Index (Attachment #2)
Sarah Morgan frowned.
“DJFT is continuously releasing data. And… call buying isn’t stopping. Both expiration and strike price distributions are intentionally laying a ladder.”
Lionel scoffed.
“Don’t worry about it. It’s all just an attempt to induce a stock rebound.”
He was certain.
‘Without landing legs, return is impossible.’
There might be a brief rebound,
But if Leviathan’s launch failed, the stock price would inevitably plummet.
Of course, that didn’t mean he would ignore the upward pressure from call buying.
Lionel tapped the monitor and ordered,
“Keep pushing it down. Roll over the puts, and only add shorts incrementally during liquidity gaps.”
Golden Edge’s massive capital-backed pressure instantly neutralized the negative gamma rise created by call buying.
With every keystroke from the traders, buys disappeared, and sells brought more sells.
The stock price fell endlessly, and the day before the launch, DJFT closed at $8.73.
[KTalk Feed] - @Kang Tae-joon | Followers: 152,134,882
Leviathan Launch Ready!
Tomorrow, if they don’t close their short positions before the launch of Leviathan, they will be obliterated.
If they don’t close their short positions before Leviathan launches tomorrow, they’ll face obliteration.
#MyTurn #NoLandingLegsNeeded #SkyReaper
The day before the Leviathan launch,
Kang Tae-joon’s feed instantly captured the attention of investors worldwide.
The comment section exploded with frenzy.
└ The stock is at $8.73, down from $23? This can’t be real.
└ Lol, I can’t even complain anymore.
└ It’s fallen so much I can’t even cut my losses.
└ Forced to hold. T.T
└ That’s why you should’ve gone short like me. I’m at ease. Already over 70% profit. I wonder how much more it’ll rise tomorrow.
└ But what gives Kang Tae-joon such confidence in these posts?
└ F*ck, it’s because of these posts that I’ve held onto the stock this long. I regret it so much. This sucks, seriously.
└ But from the feed alone, it seems like both the launch and return will succeed.
└ What are you talking about! Didn’t you see the paparazzi photos? Even a few days ago, there were still no landing legs.
└ Kang Tae-joon says no landing legs are needed. I’m sticking with him to the end. Bought more today.
└ Lol, there are still people believing this nonsense… How can it land without landing legs? Is Leviathan some kind of spaceship?
└ Even spaceships need wings for vertical landing. This thing doesn’t even have wings.
└ It’s not about wings. With that design, it would need a complete landing system like an aircraft. Landing gear is a must.
└ So how is it supposed to return?
└ That’s why it’s nonsense. From the outside, return is absolutely impossible. Even a successful launch would be impressive.
└ I’m genuinely terrified of what will happen to the stock if it explodes during launch.
└ ……
…
…
Dojin Frontier Headquarters, Main Conference Room
Rain gently fell outside the glass windows.
On the screen, the launch sequence and recovery timeline were displayed side by side.
“Chairman… are we really okay with tomorrow?”
Hong Chung-ki, attending an internal meeting for the first time in a while thanks to his role as CEO of Ahsung Motors, looked at me with concern.
“There’s a lot of talk about the chances of a successful return. And the market situation is at its worst.”
After the $10 support level collapsed, the panic-stricken market experienced another sell-off.
Ultimately, the market closed at $8.73.
Executive Vice President Oh Seong-hak continued,
“The stock price has fallen even lower than right after the IPO.”
The offering price was $4, but on the day of listing, DJFT surged 140% and closed at $9.6.
Now, falling to the low $8 range meant that, aside from some who participated in the offering, all shareholders were in the red.
“If the launch fails in this situation, it will significantly damage the group’s credibility.”
Everyone’s gaze naturally turned to me.
However, it was Kim Se-bin, the project’s lead director, who spoke up.
“The launch will definitely succeed.”
Her voice was dry yet firm.
I added,
“You’ll see the results tomorrow with your own eyes.”
“But… is it really possible to return without landing legs?”
In response to Hong Chung-ki’s question, Seong-hwan hesitated for a moment but ultimately held his tongue.
We had instructed silence to prepare for any unforeseen situations.
One thing was clear:
I had never made a promise I couldn’t keep,
And everyone here knew that.
And so, the fateful launch day arrived.