What is Stonk O Tracker? Well, overwhelmed by the Fear of Missing out (FOMO) and contemplating a dive into the world of meme stock trading? Before you take the plunge with AMC and GameStop (GME), arm yourself with adequate knowledge.
One potential source of this knowledge is the Stonk O Tracker, a website dedicated to monitoring the information pertinent to the two most sought-after meme stocks. However, the accuracy of this tool has been called into question and it is vital to understand that it does not guarantee substantial returns. In this article, we delve into the crux of the Stonk O Tracker, its utility, and its relevance to your financial growth.
Stonk O Tracker Deciphered
Initiated by an anonymous developer (probably a Redditor), the Stonk O Tracker was conceived as a comprehensive platform to monitor AMC and GME data. The website presents investors with relevant data, with a primary focus on real-time short positions.
It offers a wealth of statistics, encompassing the current NYSE price, the Short Sale Restriction (SSR) threshold, trading volume, and borrowed ETF shares updated every minute, and daily option data. If these terms seem daunting, don’t fret. We will break down how to understand each statistic as we proceed.
The Origin of Stonk O Tracker
The Stonk O Tracker was the brainchild of a retail trader aiming to provide real-time updates on two of the most googled stocks. But why AMC and GME? The backstory is quite intriguing.
Understanding Meme Stocks
In 2020, there was a surge in retail investors, facilitated by smartphone apps like Robinhood and WealthSimple. Certain companies gained unprecedented attention as potential market disruptors.
Among these, AMC and GameStop stood out, earning the label of “meme stocks” due to their widespread discussion on social media platforms like Reddit where novice investors congregated.
Despite many meme stocks losing their initial hype, AMC and GameStop have sustained significant interest, partially due to the endorsement of high-profile investors such as Elon Musk and Ryan Cohen.
The Short Squeeze Phenomenon
These two stocks were highlighted on social media due to the short positions initiated by several hedge funds. These bets were essentially against the success of these traditional media companies.
GameStop, a video game retailer, and AMC, a movie theatre chain, both resonating with internet users, were among the most shorted stocks on Wall Street.
The details of how they emerged as prime targets for internet users looking to counterattack is another story (you can gain more insights from investor Keith Gill) – but there was a sudden surge in demand for real-time information regarding AMC and GME.
This is where Stonk O Tracker, a slang term for stocks popularized by the subreddit r/wallstreetbets, comes into play – keeping potential traders updated.
Decoding the Stonk O Tracker
The Stonk O Tracker is a useful tool for investors, particularly those with a modest investment budget of around $1,500, who might not always have the latest market trends readily available. However, it is important to consider that the accuracy of the Stonk O Tracker has been a topic of debate. It is advisable for investors to gain a comprehensive understanding of the statistics they are dealing with before making significant financial commitments.
If you are new to the site, let us simplify some of the primary tables and their functions.
Stock Price and SSR
Once you’re on the site, you’ll notice three figures at the top of the page. The first is the present price on the New York Stock Exchange (NYSE) and its fluctuation throughout the trading day. To the right is the price on the Frankfurt Stock Exchange (FRA), Germany’s largest exchange.
In between these prices is a figure labeled SSR Trigger Price. SSR, or Short Sale Restriction, is an NYSE mechanism that limits short selling when a stock’s price is already on a downward trend within the day. The SSR threshold is 10% below the reference, which is the closing price from the previous day.
For instance, if AMC’s closing price was $16 on a Tuesday, and it fell below $14.40 during Wednesday’s typical trading hours, it would automatically be positioned on the SSR list, preventing further shorting until the end of the next trading day. This is particularly useful for managing wildly fluctuating stocks.
Trading Volume
The Stonk-O-Tracker’s main page also displays trading volume updates every half hour, with the option for minute-by-minute data. This information allows investors to assess the trading activity of a specific stock, which can be instrumental in anticipating potential market shifts.
For example, a sudden increase in trading volume could be a sign of an upcoming significant movement in a stock.
Shares on Loan
This table presents the number of shares available for short selling. The middle number, founded on data provided by Interactive Brokers according to the site, provides a glimpse into whether the stock is heavily shorted at any given point. A decline in this figure indicates a rise in short positions.
Decoding Option Data
The option data section is where you can find all the relevant information for both calls and puts, including expiry date for each contract and whether the option is In The Money (ITM) or Out of The Money (OTM).
To clarify, a ‘call’ is a contract that grants an investor the right to purchase a stock at a predetermined price, on a specified future date. If the stock price surpasses the predetermined price when the specified date arrives, the call is considered ITM.
Conversely, a ‘put’ is essentially betting that the value of a stock will depreciate in the future compared to the predetermined price.
There are other tables available on the site, whose contents are fairly intuitive, particularly since the removal of the Dark Pool percentage data, which used to approximate the volume of non-public trading.
Profitability with Stonk-O-Tracker?
The Stonk-O-Tracker is not about following the overly simplistic “buy the dip” meme often peddled to novice retail investors. Instead, it’s a flexible tool, providing information that can be utilized to guide any trading strategy, making it beneficial to those interested in AMC or GME investments.
Nevertheless, it is crucial not to rely solely on Stonk-O-Tracker when considering significant investments. If you’re thinking about direct investments in stocks like GME or AMC, I’d suggest further exploring the concept of SDIRAs—self-directed retirement accounts that enable tax-free or tax-deferred investments. As always, only risk what you are willing and able to lose in the stock market.
