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The Battle of GameStop

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Re: The Battle of GameStop

#421

Post by koheripbal »

jameshart wrote: post #366
koheripbal wrote: post #359

Earlier quoted context omitted.

> the way the rewards are allocated for playing... don’t matter too much. Of course they matter. If they didn't matter, then participants wouldn't participate. ...and if they didn't participate then the market would have less liquidity. ...and higher liquidity is ALWAYS a good thing. The health of a market can be characterized by the persistence of liquidity.

If a bunch of options traders provide liquidity services which the market values at $1m, the market will pay the options traders $1m. If the options traders decide to armwrestle to decide which of them gets to keep the $1m, the market doesn’t care.

If there are only two traders trading against one another, you are correct.

...but there is an ecosystem of traders intertwined and many of them are primary market participants, so the market does care, because the "gamblers" are providing liquidity to the legitimate participants.

Re: The Battle of GameStop

#422

Post by riffraff »

PartiallyTyped wrote: post #211
viraptor wrote: post #47

Earlier quoted context omitted.

It's still a lottery. They didn't know if there would be enough real following or if most people were just trolling. Even if they estimated that well, they still had no idea where the peak was.

Then you are not paying attention. The floating shares are fewer than the shorted shares. Even if all the floating shares were bought, there are not enough shares to cover the short's position.

> The floating shares are fewer than the shorted shares. Even if all the floating shares were bought, there are not enough shares to cover the short's position.

that's not necessarily true.

Quoting Matt Levine[0]

> There are 100 shares. A owns 90 of them, B owns 10. A lends her 90 shares to C, who shorts them all to D. Now A owns 90 shares, B owns 10 and D owns 90—there are 100 shares outstanding, but 190 shares show up on ownership lists. (The accounts balance because C owes 90 shares to A, giving C, in a sense, negative 90 shares.) Short interest is 90 shares out of 100 outstanding. Now D lends her 90 shares to E, who shorts them all to F. Now A owns 90, B 10, D 90 and F 90, for a total of 280 shares. Short interest is 180 shares out of 100 outstanding. No problem! No big deal! You can just keep re-borrowing the shares. F can lend them to G! It's fine.

[0] https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga...

Re: The Battle of GameStop

#423

Post by MrRadar »

mywittyname wrote: post #387
TheAdamAndChe wrote: post #363

Earlier quoted context omitted.

Entry level homes in non-trendy areas are much cheaper. My home is about $110k.

>My home is about $110k. Like, it was worth that when you bought it several years ago? I mean, I live in the midwest too, where it used to be possible to get a modest home in the burbs for about that price. But those homes are now gone, they disappeared over the past few years as they were purchased in all-cash transactions by flippers who threw some paint and flooring in them before selling them for twice the price.…

This. I got an unexpected windfall last year that meant I could finally afford the downpayment on a house and in the Minneapolis suburbs (not exactly a "trendy" area) basic post-war (50s-70s, 2-4 bedroom) homes start at $250k unless they're exceptionally tiny or in poor condition. Just a few years ago these places were going for under $200k. If I wanted to live in a more rural area of the state I'm sure I could find homes going for $110k but for a lot of reasons I don't want to do that.

Re: The Battle of GameStop

#424

Post by neuronic »

Mobleysoft wrote: post #76
IIAOPSW wrote: post #15

I've wrote this elsewhere. The thing that's clicked for me after reading the comments on wsb is that populism, amplified by the modern internet, is going to radically change the finance world in a similar way to how it radically changed our political landscape. These people aren't just investing in GME to enrich themselves. They are doing it to spite the people who they percieve as rigging the game. They are doing it…

I'm up 180% over the year. Peanuts compared to the WSB people, but I got there with my own intuition. I'm looking into food and entertainment for my next picks. I think the populace will need them over the next year before a general return to the before times mid 2022. We'll see.

> general return to the before times mid 2022

But will this happen? Massive inflation post-Covid isn't really that far fetched. I think there will be no return to the beforeworld.

Re: The Battle of GameStop

#425

Post by thebean11 »

ALittleLight wrote: post #216
EdwardDiego wrote: post #50

Earlier quoted context omitted.

/r/wsb has always struck me as being an offshoot of 4chan, with their self-labelling as autists and retards. And 4Chan a) isn't dumb, but they like doing dumb shit and b) they love brigading. Pool's closed etc. But what's interesting is how the institutional outrage is merely fuelling the brigading. The institutional investors crying in the media only confirms WSB's beliefs that they've found a weak spot in the insti…

The tagline for WSB is "It's like if you gave 4chan a Bloomberg terminal." Personally, I'm buying in the money puts expiring in 2023. No way Gamestop is doing better now, or has a better future now, than it did five or ten years, yet their stock's at an all time high? These hijinks may continue for some time, but I doubt it'll last years, price will settle and I'll hopefully make a modest profit.

Those puts have got to be expensive right? Even /r/wsb switched to shares because premiums were so high.

Re: The Battle of GameStop

#426

Post by neuronic »

Miner49er wrote: post #310
irjustin wrote: post #301

Earlier quoted context omitted.

Perhaps this guy isn't real, but there's plenty of guys on WSB who have been able to do it. They're the dream to achieve. I admit I'm jealous myself because I missed out on great buys like NIO, PLTR, GME. I'm paying attention now, but I'm worried I missed the boat already.

In my experience there will likely be another boat (or yatch). Back in 2016/2017 the meme was AMD, then there was TSLA and then GME, and lots of smaller ones in between. There will be more.

Not if the boomers activate the SEC. All it takes is one reddit ban of WSB. People won't just reorganize somewhere else, it never happens. Sure, a bunch of them will be somewhere else for 4 months but then the movement is dies because most WSB users will stick to reddit long term.

Re: The Battle of GameStop

#427

Post by ivanech »

dvt wrote: post #6

> The same emotion that caused us to root for the thieves in Ocean’s 11 is what makes Wall Street Bets so enticing. Put frankly, Millennials are tired of getting fucked by the man. When you’re underemployed with $100,000 in student loan debt, your financial situation feels overwhelming. You really don’t want to take the advice of your parents or CNBC talking heads [5] to invest 10% of your salary for a 4% annual retu…

Somebody wrote a reply to the above comment saying that people should simply not have student loan debt and then promptly deleted it before I could post the following reply:

Big ask to expect teenagers to be able to project the marginal benefit of college education (inherently uncertain and speculative) and to also estimate the real, not nominal, burden of the loans to the future (again, inherently uncertain and speculative). And it's tough to make that judgement when many US high schools treat college education like a necessity. Also important to remember that education debt is unique, it's not dischargeable. Unlike any other type of investment debt, borrowers don't have access to bankruptcy, meaning that an investment in education that doesn't work out follows you around for life like an underwater mortgage you can't be rid of.

Re: The Battle of GameStop

#428

Post by Miner49er »

neuronic wrote: post #426
Miner49er wrote: post #310

Earlier quoted context omitted.

In my experience there will likely be another boat (or yatch). Back in 2016/2017 the meme was AMD, then there was TSLA and then GME, and lots of smaller ones in between. There will be more.

Not if the boomers activate the SEC. All it takes is one reddit ban of WSB. People won't just reorganize somewhere else, it never happens. Sure, a bunch of them will be somewhere else for 4 months but then the movement is dies because most WSB users will stick to reddit long term.

True, but I don't think that's likely to happen.

Re: The Battle of GameStop

#429

Post by throwaway894345 »

willis936 wrote: post #396
gruez wrote: post #389

Earlier quoted context omitted.

So to confirm, you took the job because there are no higher paying jobs available? I think GP was assuming that you had higher paying job options (given that EE jobs are high paying and generally in demand), but you chose to forgo that in favor of a research/academic position.

In my area of expertise and location, there are slim pickings. I moved to stay with my SO while they pursue a PhD. "There's always a choice" is a weak argument. I could move to a tech hub and get an easy cushy job in an ethically bankrupt field. I won't. I am not making life choices that maximize profit. I am also not acting irresponsibly, "living beyond my means", or making bad financial decisions. You don't see a p…

Why do you posit that your only options are "tech hub" and "research job"?

> You don't see a problem with a motivated, hardworking, educated individual meeting the market at a price that keeps them below what previous generations consider middle class? That is not indicative of an issue to you?

I think people are trying to understand if you are working at or below your regional market value. That said, it sounds like a problem local to your region. I think if you look at Glassdoor you'll find that you're well below the national average, and I don't think it's just Silicon Valley inflating the national average. (I have an EE degree as well and on graduation it seemed like $75K was a pretty reasonable starting salary most places with lots of room for growth).

Re: The Battle of GameStop

#430

Post by nico_h »

PartiallyTyped wrote: post #362
nico_h wrote: post #344

Earlier quoted context omitted.

yeah, but how much can they bleed? Can they just give up, default and declare bankruptcy? And then all the people hoping for a short squeeze end up holding stock that is not worth much anymore?

They will get margin called, their assets will be liquidated and the stocks covered.

yeah, but how will the stock be covered, and by whom? If there is no enough stock to buy to cover the outstanding contracts?
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