Oof, yeah, I misspoke. I was responding to the parent comment which said that r/wsb can’t move markets when, 30 minutes prior, I had read something (Matt Levine’s take on it) with a claim to the contrary.

Thank you random HN commenter for pointing out my flaw in the “perpetual upward” comment. Levine’s take still claims that r/wsb can technically move the market, no? Or should I go back and re-read? Maybe I interpreted differently. But I don’t know for sure, because I don’t study such things and hardly know options or markets. Neither does like 98% of the folks on this post based on their comments here (yourself included!)

As I read it, the stock price is basically modeled as a "true value" + noise. You can't observe the true value, but you can estimate it by characterizing the noise.

The effect of buying the stock with leverage instead of out of pocket (which is what call options let you do) is that the noise is amplified. The "true value" component doesn't change. Thus, when the noise is increasing the price, the price is higher than it otherwise would have been, and when the noise is decreasing the price, the price is lower than it otherwise would have been. Imagine the difference between P(x) = v(x) + cos n and P(x) = v(x) + 2 cos n.

Can technically move the market? Sure, but everything that happens in the market is technically moving the market. The main effect (as discussed in the Matt Levine pieces) is to increase the volatility of the stocks in question.