Average Directional Index (ADX)

The average directional index (ADX) is a technical indicator used to measure the strength of a trend. It is a non-directional indicator, it only shows the strength of the trend and not which direction the trend is in. So, on charts it is often accompanied by the negative directional indicator (-DI) and the positive directional indicator (+DI) in order to help traders decide whether they should take a long or short position.

Calculating the ADX

The ADX takes the average or mean of the directional movement index over a period of time (usually 14 periods). The directional movement index is calculated by taking the absolute difference between the positive directional indicator (+DI) and the negative directional indicator (-DI) and dividing it by the total absolute sum of the two indicators (+DI & -DI). Then finally multiplying the result by 100.

How to use the ADX

The ADX, the positive directional indicator (+DI) and the negative directional indicator (-DI) are momentum indicators. The ADX tells you trend strength whereas +DI and -DI help determine trend direction.

An ADX above 25 is considered a strong trend and one below 20 is considered a weak trend. Crossovers between the +DI and -DI in conjunction with ADX can be used to generate trade signals. For example if the +DI is above the -DI and the ADX is above 25 this is a strong uptrend and a potential buy signal. And if the -DI is above the +DI and the ADX is above 25 then this is a potential sell signal or a chance to enter a short position.

In contrast if the ADX is below 20 this might mean that the price is trendless and it may not be an ideal time to enter a position.

Limitations of the ADX

The ADX can create false signals with the ADX moving above 25 temporarily followed by quick reversals in price and the ADX. Also with a weak ADX there can be many crossovers of the negative and positive directional indicators creating false and confusing signals.

As with all technical indicators the ADX should be used in conjunction with other indicators and the individual weightings of the indicator should be adjusted with your trading strategy. E.g. You might only want to consider the ADX a strong trend signal above 30 instead of the standard 25 in your trading strategy.

Beginner’s Guide to Futures

A futures contract is a legal agreement to buy or sell a particular commodity, asset or security at a predetermined price at a specified time in the future. The buyer of the futures contract is obligated to buy the underlying asset when the contract expires. And the seller is obligated to provide and deliver the underlying asset on expiry. Unlike forward contracts, futures are regulated and standardized to allow trading on a futures exchange.

Using Futures To Hedge

Futures are often used to lock in the price of a commodity to hedge against market volatility. For example, a manufacturer may need 1,000 barrels of oil in three months, by entering a futures contract with the oil producer for $50 a barrel, the oil producer is guaranteed $50,000 and the manufacturer is guaranteed a price of $50 per barrel for 1,000 barrels. This protects the producer from the risk of oil prices dropping and the manufacturer from the risk of oil prices rising.

Trading Futures

Speculators use futures to profit off the change in price of the underlying asset. For Example, a speculator who believes the price of oil will rise in the next three months may buy futures at $55 and then sell the contract at $60, when the price of oil goes up, making $5 a barrel. It is important to note that if the buyer purchased futures for 1,000 barrels, they would not need to spend $55,000. They would just need to put enough money in the account to fulfil the minimum margin requirements. The value of the futures contract will fluctuate in their account until they close the position. Also, if the loss gets too big, their broker may ask for additional capital to satisfy the margin requirements.

Things To Consider

If you hold until expiry, you are obliged to exercise the contract – This means the short is obligated to make the delivery to the long and the long is obligated to take it. In most cases this will be settled in cash, where the trader simply pays or receives a cash amount depending on whether the price of the underlying asset increased or decreased.

Physical Delivery – In some cases upon contract expiry future contracts will require physical delivery. In this scenario the trader holding the contract will be responsible for storing the goods and would need to cover the costs for material handling, physical storage and insurance.

How to trade futures – To trade futures you need to open an account with a broker. You will need a margin account and be approved as eligible to trade them.

Beginner’s Guide to Options

This is the bare bones basics of how option contracts work. There are two types of option contracts, a call and a put. A call is a contract that allows the buyer the right to buy an asset at a given price – called a strike price – at or before a certain date with no obligation to do so. On the flipside a put is a contract that allows the buyer the right to sell an asset at a given price. A typical contract allows you to buy or sell 100 stocks of a company at a given strike price. The amount of the asset the contract gives you the right to buy or sell is called the multiplier and the act of using this contract to buy or sell shares at a given price is called exercising the contract. All this is best illustrated through examples (see below).

One important thing to consider is there are also two styles of options, an American-style contract and a European-style contract. An American-style contract lets you exercise the contract at any time before expiry whereas a European style contract only exercises at expiry. In the examples below we are assuming the contracts are American-style as most are, and we are exercising them early to realise our profits.

Call Contract Example

Say you purchase a call contract on company X with the strike price of $100 and an expiry date three weeks away. You pay a premium of $2 for the contract and it has a multiplier of 100. This means you have the right to buy 100 shares of company X at anytime in the next 3 weeks for $100 per share. And for this right you payed a $2 per share costing you a total premium of $200. Imagine the price of company X is $90 when you buy the contract but sometime in the next 3 weeks the price of company X rises to $120.

Now if you choose to exercise the contract you can buy 100 shares of company X at $100 and instantly sell it on the market for $120 making you $20 per share. This gives you a total profit of $2000 minus the $200 you paid for the contract giving you a $1800 dollar profit on a $200 investment. A return on investment of 900%.

Compare this to a scenario where instead of buying the call you bought 100 shares of company X at $90. You make a profit of $30 per share giving you a profit of $3000 dollars on an investment of $9000. This is a return on investment of 33% compared to the 900% return on investment for the call. For the $9000 you spent on shares you could have bought 45 calls and made a profit of $81,000. This is obviously an extreme in which a company rises 33% in price in under 3 weeks. However it illustrates the massive difference in potential upside.

In another scenario where company X does not reach a price of $100 within the 3 weeks until expiry the call becomes worthless and the buyer loses the $200 invested. Or $9000 if they were crazy enough to go all in with options. Whereas the shareholder still has 100 shares at whatever price company X now trades at.

Put Contract Example

Lets work with a similar scenario to the one above but this time company X is trading at $110 and you think it is overvalued and set for an extreme short term correction. You manage to buy a put on company X with a strike price of $100 and an expiry date three weeks away. You again pay a premium $2 per share and the multiplier is 100. This gives you the right to sell 100 shares of company X at $100 per share to the person who sold you the contract. And for this right you pay $200 ($2 premium x 100 shares).

Now if the price of company X falls to $80 you can exercise the put by buying 100 shares of company X for $80 each and selling them for $100 each. Giving you a profit of $2000 minus the $200 you paid for the contract. This is again a $1800 profit on a $200 investment, this time betting that the price of company X would fall below $100 within the next three weeks.

Things to consider

Most contracts expire out of the money four out of five option contracts never go past the strike price. And many of those that do, don’t make insane returns like the examples above.

You don’t have to exercise the contract – Options are traded on the market and you can sell any contract you bought right back into the market. You could buy a contract for a premium of $2 and sell it for a premium of $3 making 50% returns. Or you can sell it for a lower premium when you no longer believe it will reach the strike price and you can save yourself a complete loss of holding it until expiry.

You can’t exercise a contract without the money to buy the shares – If you have a call giving you the right to buy 100 shares at $100 dollars and you want to exercise it to sell those 100 shares for the new now higher market value. You will still need the $10000 to buy the 100 shares in order to make your profit. If you don’t have the capital for that you can always sell the contract back into the market for a now much higher premium. Which will bank you a nice profit as well.

Common Questions

What if I hold until expiry? On expiry your contract automatically exercises if its passed the strike price and now in the money. Or if it hasn’t reached the strike price it then just expires worthless. In the case of holding until expiry you have to make sure you have the necessary cash or margin requirements to exercise the contract.

Where can I buy options? – You will have to sign up to a brokerage that lets you buy options. Different brokerages come with different commission fees and requirements to trade options, so you can do your research and decide what’s best for you. Also they will have levelled access for trading options in which case you may be limited in how you can trade options. Many may only allow you to buy options and not sell them etc…

Can I trade American style options outside of the U.S? Yes, there are many brokers outside of the U.S that will let you trade American-style options on a variety of stocks both in and outside the U.S market.

Beginner’s Guide to SPACs

Special purpose acquisition companies (SPACs) are companies formed for the sole purpose of raising capital in order to acquire an existing company. They raise capital through an initial public offering (IPO) and are often referred to as “blank check companies” as they IPO without any business operations.

SPACs are usually formed by a group of investors with expertise in one field and the intention of targeting a company in that business sector. Although during the IPO process they don’t release their targets. The money they raise through their IPO is put into an interest bearing trust account that can only be used to complete an acquisition or return money to investors if they fail to do so. After their IPO, SPACs generally have two years to acquire a target or they face liquidation.

How to invest in SPACs

COMMON STOCK (SHARES) – A share of the SPAC will become a share of the acquired company post-merger. Or if the company fails to merge within the given timeframe then all shares are redeemed for a proportional portion of the cash held in the cash account. This gives SPACs a $10 floor as this is what must be paid out per share if the SPAC fails to merge.

So by holding a share of the SPAC your holding $10 (plus interest gained) and the chance to own a share of the company acquired by the SPAC if the merger takes place.

WARRANTS – Warrants give the owner the right but not the obligation to buy a share of the underlying company at a predetermined price (typically $11.50). Close to all SPAC warrants have an expiry date set to five-years after any merger has taken place. However if no merger takes place then the warrant expires worthless.

Most SPACs state that warrants can only be exercised one year after IPO or 30-days post-merger. It is often also stated that if the price of the common stock trades above a certain price (usually above $18 for 20 out of 30 consecutive days) then the company can redeem the shares. Either for cash (the $11.50) or a cashless basis where the owner of the warrant is given a fraction of the share. Warrants have a lower capital requirement to trade and come with a higher risk and reward, but the speculative nature of warrants can lead to wild price swings. To understand how warrants work better read here.

UNITS – During the IPO, SPACs usually offer units almost always at $10 each. A unit consists of one share of common stock and a warrant that lets you purchase a share of common stock. Generally exercisable at $11.50. The warrant in the unit can be a whole warrant, 1/2 a warrant or 1/4 a warrant.

Weeks after the IPO, the common stock (shares) and Warrants included in the SPAC units can be separated and traded individually. So the common shares, Warrants and unseparated units all trade with individual tickers.

SPAC Tickers

SPAC shares usually trade with a four symbol ticker – for example ICTT

SPAC Units trade with the same ticker with a “U” added to the end – for example ICTTU

SPAC Warrants trade with a “W” at the end – for example ICTTW

Post-merger the SPAC and target company will trade under the target company ticker. This includes all warrants and units, for example if ICTT merged with a company with the ticker ABC the new company would trade common shares under ABC, warrants under ABCW and units under ABCU.

The Advantages of Investing in SPACs

High upside with limited downside – When investing in a SPAC you can get massive returns on investment depending on the target company acquired and you have limited downside as if the company fails to merge you still get at least $10 back per share. An example would be the VITQ – NKLA merger. VectoIQ Acquisition Corp (VITQ) traded around $10 per share before it sky rocketed to $80 a share upon announcing it would merge with NKLA. In a world where they failed to find a target to merge with, the floor for the stock would still have been $10.

Warrants increase the upside – In the same example above where NKLA was trading at $80, exercising a warrant would let you buy the share at $11.50 and sell it at $80. That is a profit of $68.50 per warrant exercised. If you bought warrants before the announcement for cheap around $2 a warrant. Then you’ve made a return of over 3400%

The risk of investing in SPACs

Failure to acquire a target – After the SPAC IPO, the common stock usually trades at a slight premium. You are likely to buy the share at $11 or $12 and if the SPAC fails to merge you will get $10 back per share giving you a 10%+ loss on investment.

Opportunity Cost – SPACs have two years to find a target. During this period the value of units wont change much. This means your capital will be locked in a position generating little to no returns. During this time the capital could have been better allocated in other investments.

Redemption risk for Warrants – If the common stock trades above a certain price for a sustained period of time the warrant may be redeemed by the company for a nominal consideration. This forces public warrants to be exercised making them lose value,

Beginner’s Guide to Warrants

A warrant gives you the right but not the obligation to purchase a share at a predetermined price. Very similar to how options work. Say you bought a warrant for $2 that lets you buy a stock of company X at a strike price of $11.50, if the price of company X reaches $20. Exercising your warrant would let you buy a share of company X at $11.50 and sell it at $20. Giving you a profit of $8.50 minus $2 (the price you bought the warrant for). This gives you a return on investment of 325%.

Compare this to a scenario where instead you buy a share of company X (a SPAC pre merger). You would buy company X for roughly $11 and sell it for $20 giving you a return on investment of 82%. This highlights how warrants can give you better returns on SPACs. However there is also a higher risk.

In another scenario where company X is a SPAC that never merged, your investment in the common stock of company X gives you an approximate 10% loss as the value of company X falls from $11 to $10 (the floor for SPACs), However your warrants become completely worthless losing you any money invested.

Things to Consider

Warrants can’t be exercised right away – Usually warrants can only be exercised 30 days after the merger or a year after the SPAC IPO. This means if the price of the SPAC shoots up based on speculation of a merger but sufficient time hasn’t passed you won’t be able to exercise the warrant.

Only whole warrants can be exercised – You can’t exercise 1/2 a warrant. Which is sometimes the portion of the warrant offered in Units on a SPAC’s IPO. You would have to buy another 1/2 to have enough to exercise or just sell your 1/2 for a profit.

Ratios of warrants – most warrants have a 1:1 ratio between the warrant and how much common stock you get when exercising a warrant but not all do. Many have a 2:1 ratio so you would need 2 warrants for the right to buy 1 common stock at the pre-determined strike price. And some even have a 4:3 ratio in which you need 4 warrants for 3 common stocks. You will have to verify the ratio for the SPAC your looking to invest in.

You need enough capital to exercise a warrant – If you own 100 warrants with a strike price of $11.50 and you wish to exercise them to profit off the current stock price being higher than $11.50, You need 100 x $11.50 to exercise the 100 warrants. You cannot exercise the warrants without the money to buy the underlying stock in the first place. If you don’t have the money required you can still just sell the warrants and make a profit.

Cash redemption – If the price of the underlying stock remains above a certain price for a certain amount of time this usually gives the company the right to redeem the warrants. Usually the price of the stock would have to remain above $18 for 20 of 30 consecutive days. In a cash redemption the company offers a nominal consideration for the warrants (e.g. 0.01 per warrant) this forces public warrants to be exercised or lose immense value. If you hold them passed the expiration date of the early redemption call they become essentially worthless.

Cashless redemption – Most redemption calls are cash redemptions but in rare cases a company may have a cashless redemption. In a cashless redemption your warrants automatically convert into the equivalent value of stock. In this conversion there is a standard formulae used so for the investor they get as much value as if the warrants were exercised. But in this scenario the company doesn’t receive the $11.50 they usually would in a cash redemption, so they reduce the cash generated but they also reduce share dilution. As a whole new stock being offered per warrant in the warrants being exercised adds more stocks to the market than the fraction of a share given out per warrant in a cashless redemption. Although this is more rare as companies post merger usually still prefer to raise money.

Common Questions

Do warrants convert to the new company when SPACs merge? Yes, a warrant of the SPAC becomes a warrant of the new company post merger.

Do I have to exercise them? No, You can trade the warrants on the market. They are very liquid which adds to their appeal.

Do I have to hold them through merger? No, you can always just trade them on the market at any time.

What if I don’t have the money to exercise the warrant? Your best option is to sell the warrant. Or if you have many warrants you can sell some of them until you have the capital required to exercise the rest.

How do I exercise warrants? This varies across brokers. You will have to call your broker to find out how to exercise the warrants and whether your particular broker even allows you to purchase warrants in the first place.

Which Call Contracts Facilitate A Gamma Squeeze The Most For GME

This article assumes a basic understanding of what options are, if you need a quick breakdown you can read up on them here. A gamma squeeze is a rapid rise in price caused by sellers of option contracts having to hedge against the risk of the contract exercising by buying the underlying asset. This drives up the price of the asset as the buying pressure on it increases causing more contracts to need hedging. A feedback loop that keeps forcing the price up to a point where the contracts are sufficiently hedged.

In the case of GME, to understand which contracts will most facilitate a gamma squeeze you need to understand the mechanics of a gamma squeeze and who is selling you these contracts.

Who Is Selling Me Options?

Unlike when trading normal stocks, when you buy an options contract you usually aren’t trading with another individual investor, but rather a market maker. This is an important detail as market makers when selling contracts use a sophisticated pricing model called the Black-Scholes options pricing model. They use this model to figure out the price the contract should trade at and then factor in an additional premium to claim a profit on the trade.

Along with helping to model a price for the option contract, the Black-Scholes also models the risk associated with the contract position. Market makers use this to understand how to hedge their position based on the Greeks. The Greeks are a set of variables that help measure the sensitivity of an option’s price to various factors. But to understand a gamma squeeze you only need to focus on two of the Greeks – Delta & Gamma. (Explained Below)

Mechanics Of A Gamma Squeeze

To understand gamma, you first need to understand delta. Delta is the expected change in price of an option from a change in the price of the underlying asset. So, if a call option had a delta of 0.3, the price of the contract would be expected to rise $0.30 for every $1 the stock’s price increased. Delta changes depending on how close or far away a stock is from it’s strike price, this is illustrated in the graph below.

In the above graph you can see delta is flat at or near zero as the price of the stock is far below the strike price and it is flat and high as the stock price is far above the strike price. This is intuitive as if you’re really far away from being in the money, a dollar increase in stock price isn’t going to make the option that much more valuable. And if you’re very far above the strike price a dollar increase in the stock price is worth pretty much an extra dollar per share when exercised.

But what is worth noting is the steepness of the line as it approaches the strike price. This is when delta rapidly starts increasing and the line is at it’s steepest at the strike price. Gamma is the rate change of delta and is represented by the steepness of the line in the above graph. So, in turn gamma is at it’s highest as a contract is at it’s strike price. And very high when it is near it’s strike price.

What Does This Mean For GME?

Market makers use gamma to understand how much to hedge their position. As gamma rapidly begins to increase market makers are forced to start buying the underlying asset (or GME in the case of GME calls). So to see the greatest increase in gamma the price would have to approach the strike price. This makes the most valuable options in initiating a gamma squeeze those with a strike price near or slightly above the current market price. A high volume of call contracts purchased at this price range is more likely to initiate a gamma squeeze than buying calls far out of the money.

This also means that trading in your very in the money calls for calls that are far out of the money may likely reduce the chances of a squeeze. This is based on a separate but similar principal called delta hedging. If you have a call you bought on GME early with a strike price of 60 and now the price of GME is over 100, the delta on this contract is very high. If you then decide to sell this contract and buy a cheap out of the money call with a strike price of 150 or 200 hoping to make money on a rapid rise, you will then have given market makers the chance to buy back your in the money contract. And now you will own a contract with a much lower delta.

Similar to gamma hedging, how high delta is plays a role in how much market makers will have to buy the underlying asset to manage their risk. And by trading your in the money contracts for out the money contracts, you will be lowering the delta and essentially the amount market makers will have to hedge by (the amount of GME they will have to purchase).

When analysing the first GME squeeze with the price movement of GME now, this is the first time the price movement shows the chance for another potential squeeze. With high short interest, the price of GME sustaining a high long enough to increase borrowing fees significantly and the rise in price again coming off the back of a gamma squeeze.

However when compared to the climax of the first squeeze, borrowing fees are still low and the daily price movement rather resembles the price movement of GME during it’s build up to the first squeeze. In which we saw a slow rise in price and a slow increase in borrowing fees both accompanied by multiple gamma squeezes. The first forcing the price up from 20 to almost 50, the second shooting the price close to 100 and then two more proceeding the climax in late Jan / early Feb.

Regardless for people betting on another short squeeze it is important to understand how the options market will effect price movement as these variables are very likely to be the catalyst for another short squeeze if it does occur.

Chamath Palihapitiya’s Two SPACs With No Merger Targets – IPOD and IPOF

The king of SPACs, Chamath Palihapitiya, has recently filed for seven new SPAC names with the Securities and Exchange Commission through his company the Social Capital Hedosophia Investment Group. As expected they are Social Capital Hedosophia Holdings VII through XIII and will likely correspond with the ticker symbols IPOG through IPOM. Following his previous trend, Palihapitiya has previously claimed to have reserved ticker symbols from IPOA all the way to IPOZ.

It is still too early to think about the seven new SPACs as no initial registration statements (S-1s) have been filed. So we don’t know the board members, when they will go public or how much they are looking to raise.

However speculatively this has people talking about what this means for IPOD and IPOF. The two SPACs Chamath has yet to announce merger targets for. This is not only fuelled by his new filings but also speculation based on his tweets from the past month.

These tweets fit the early speculation that Chamath would be targeting an EV related company for one of his two remaining SPACs. This was also followed by a bizarre tweet from one of the SPAC board members.

The most talked about speculation is that IPOF may merge with Silano Nano Technologies. As it fits in the range of what IPOF’s trust likely has the capital to go for, as well as the type of company the current board members are suited to target. Although all this still remains highly speculative. So for the time being, we are for the most part still completely in the dark.

GameStop could potentially see another massive squeeze

The potential second coming of a GME squeeze is now being talked about. Again falling on the final week of the month as monthly and weekly options for GME both near expiry. In this article I will explain why this rise in price is likely to be another squeeze and not just the dead cat bounce GME has seen a few times over the last few weeks as the price continued to stay depressed.

The basic mechanics for this squeeze remain the same as the first. Buyers simply have to hold the price above a certain point and let borrowing fees increase as shorts bleed dry and are forced to cover their position. Which in turn forces the price up and forces more and more short sellers to cover their position leading to a rapid rise in price.

The key point here is for the squeeze to occur we need to see a sustained rise in price, one long enough to see borrowing fees rise. And as of writing this post (26/02/2021) this is the first time since the initial squeeze that this has been achieved. Fintel reports a rapid decrease in available shares to short along with an increase in borrowing fees from 1.1% to 12.78%. Now in the hay day of the first squeeze the borrowing fees reached over 80% but on the rapid rise towards the climax of the squeeze borrowing fees hovered around 30% for several days. A few more days of sustained holding by retail investors will recreate these circumstances.

Although in comparison to the first squeeze the short-to-float ratio is much lower. With the initial squeeze seeing 140% of the float being shorted and this time around Ortex reports less than 40% of the float being shorted. Although these figures may become quickly outdated as yesterday (25/02/2021) we saw a short volume of 33 million. Regardless the short interest remains high and definitely high enough to see a squeeze especially with all the new shares shorted.

As with the first squeeze we see our first major increase in buying pressure coming off the back of a likely gamma squeeze. The circumstances for which now match that of the first. The gamma squeeze is a rise in price caused by sellers of option contracts being forced to cover the execution of the contract by buying the underlying security. As weekly and monthly options expire the higher the price of GME as the market closes on Friday the more options will be in the money forcing more shares of GME to be purchased to cover the sold calls on GME.

This makes today an interesting day for the future of this second squeeze but at the same time not the deciding day, As when compared to the first squeeze the borrowing fees haven’t reached a high enough level for the climax to be so soon. In all likelihood the gamma squeeze will play a part in helping move the squeeze forward but it might not trigger the squeeze instantly. Regardless it’s an important event that will help retail investors who are betting on a short squeeze immensely. So today remains an important day to watch the stock but not the deciding day.

There is also speculation on how much of the short position this time around is held by retail investors who tried to make money on the downtrend of GME after it’s first squeeze. That is an important factor to consider as that number in all likelihood could be much larger following all the attention GME received in late Jan/ early Feb. And a higher number of retail investors shorting ironically is good for the squeeze as they lack the capital to withstand the rise in borrowing fees the way hedge funds can.

Regardless although all the circumstances are right for GME to squeeze again the process for the squeeze to take place is still in its early stages and will require buyers to hold for multiple days and slowly watch GME rise. Maybe as much as 20-50% a day like the run up for the first squeeze maybe more maybe less. But it won’t happen over the course of one day and with how fickle investors can be, this is the only major point of concern for those seeking a GME squeeze.

Is the Apple-Hyundai deal still on?

On February 8th Hyundai announced that it would no longer be working with Apple on an autonomous vehicle. After a month of negotiations that looked to be close to materialising to a deal in which Kia (owned by Hyundai) would produce the Apple car at a factory in Georgia.

However after concerns from Hyundai executives over becoming just a builder of Apple products like Foxconn and rumours that Apple wasn’t happy with the deal being leaked, Bloomberg released a report claiming the negotiations had been paused.

The Bloomberg report came out on the 5th followed by an announcement from Hyundai on the 8th: “We are receiving requests for cooperation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided,” the automaker said. “We are not having talks with Apple on developing autonomous vehicles.”

New Information / Current Speculation

On the day the deal would have been signed (FEB 17th) Investors Business Daily released a video and article claiming that Apple had chosen Kia as its partner to produce the Apple car. But the video cited a Bloomberg article that cannot be found on the Bloomberg site and the article was only a paragraph long simply reporting the news.

So far no other news outlet has reported the story and Investors Business Daily has not responded to our request for a statement on their source for the news.

Although Investors Business Daily is a credible source this report remains unsubstantiated. Likely to be the result of an accidental automated release of a pre-written article as the news came out on the same day the deal would have been signed if talks hadn’t fallen through.

Regardless some speculators remain convinced that Apple will come back to Hyundai as they read in between the lines of Hyundai’s somewhat ambiguous statement. Relying on the fact that talks may be “paused currently” and the car being developed may not be autonomous. All this being speculated on the fact Apple likes to keep a tighter lid on their projects and likely used their weight to force a retractive statement from Hyundai.

Although as of now until Investors Business Daily releases a statement or any new information comes out about the deal investing or trading based on this information remains a highly, highly, highly speculative play.

Hyundai executives to be investigated over “Apple Car” deal

South Korean authorities are investigating whether or not Hyundai execs profited from trading Hyundai stock before reporting the “Apple Car” deal had been paused.

This report comes from Reuters claims the chairman of the FSC has told a parliament committee member that investigation may begin next week. “Reviews are to examine whether there is any suspicion (of wrongdoing) or not,” a spokesperson told Reuters. “The length of such reviews varies with each case, and the exchange will communicate findings to the FSC.”

Reuters estimates a total of 3400 shares were traded by insiders worth approximately $753,000