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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 232.38+0.1%Dec 24 12:59 PM EST
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To: McNabb Brothers who wrote (17371)9/16/1998 4:09:00 PM
From: OtherChap  Read Replies (1) of 164684
 
It was fascinating to watch the action today in AMZN. I've got level 2 data and for the first time I was able to watch a squeeze in action. Everyone could sell all the stop loss orders on tons of short shares and the MM's just kept knocking up the bid until it triggered the auto-cover programs. Suddenly you would see literally 200 trades in 10 seconds, each around 100-300 shares. Then they'd move it up to the next level and you'd see the same thing again.

The problem with AMZN right now is that shorts have made such incredible profits over the last 3 weeks that they are too quick to cover. Having all those september puts out there expiring worthless on friday is a nightmare to the shorts, so they were covering like crazy.

Me, I covered late this morning with huge profits, and I was intending to buy back in towards the close today, but it looks like the squeeze was just getting up a full head of steam- tomorrow all the people who are short and see the quotes in a newspaper are going to freak and cover some more. We could see 100 tomorrow.

I don't think I'll re-buy my puts until after friday. The squeeze is just to great until then. If I had held my puts after 11:45, and through to the close of today, my net worth would nearly have been cut in half. I feel like I dodged a bullet. :)
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