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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#31

Post by CyberRabbi »

jdjfktkrnj wrote: post #3

So, do people still think Efficient Market Hypothesis is a thing? If this doesn't prove that the stock market is just a video game, which decoupled from economic reality a long time ago... We've now entered the age of the meme stock market.

Exceptional short-term phenomena like this do not disprove the idea that on long-term time scales the market is efficient.

A regression to the mean will inevitably happen and that will further confirm the efficiency idea. Everyone will eventually have to sell.

Re: GameStop Is Rage Against the Financial Machine

#32

Post by ISL »

ping_pong wrote: post #4

It's really not. Because eventually retail is going to get destroyed. Yes, some hedge funds have lost their shirts, but those are the first ones who were in the short before the squeeze. The hedge funds and more importantly day trading shops making money right now are the ones who saw the activity and are goosing the stock price right now. I don't know if people realize that there are thousands of day trading shops w…

It isn't just retail that is going to get destroyed -- the option-sellers may not have enough capital to hedge effectively. A lot of parties are going to be harmed by this; it is an expensive tuition payment to the school of hard knocks.

The most interesting technical thing about this fracas is the fact that WSB has managed to play the options-sellers off against the shorts to set this off. The kids have temporarily played the adults off against one another and caused an explosion.

In the end, the savvy and the lucky will have more capital than in the beginning, and the un-trained and unlucky are going to be very sad. In the meantime, food-fights are fun while the food is flying.

Re: GameStop Is Rage Against the Financial Machine

#33

Post by dannyw »

ping_pong wrote: post #4

It's really not. Because eventually retail is going to get destroyed. Yes, some hedge funds have lost their shirts, but those are the first ones who were in the short before the squeeze. The hedge funds and more importantly day trading shops making money right now are the ones who saw the activity and are goosing the stock price right now. I don't know if people realize that there are thousands of day trading shops w…

You underestimate just how much concentrated retail volume is. I have had more than ten people ask me how to buy GME. Its on the front page of everything. Bitcoin’s nearly $1T market cap is more or less all retail.

Plenty of WSB posts with multi million positions.

Disclosure: I long GME.

Re: GameStop Is Rage Against the Financial Machine

#34

Post by splistud »

ping_pong wrote: post #16
tempsy wrote: post #12

Earlier quoted context omitted.

that isn’t what the article is saying. it’s arguing that the short squeeze is less about pure profit making, though of course that’s part of it, but more about actively trying to hurt hedge funds who are naked short selling and potentially forcing them to liquidate as a sort of populist driven “payback” against the elite.

It's all about making money. WSB was about hurting the hedge funds or screwing the system. And to be clear, I know wsb because I was one of the first group of subscribers of wsb way way back, but quit it because it wasn't engaged in what I thought was trading strategies, but a lot of shitposting. But they didn't cause this crazy short squeeze. It's the other hedge funds and day trading shops that are causing this bec…

On this we agree. I dropped in when I felt like reading/engaging in some shitposting. That said, WSB is a good alternate stock screen.

Re: GameStop Is Rage Against the Financial Machine

#35

Post by tempsy »

ping_pong wrote: post #26
tempsy wrote: post #19

Earlier quoted context omitted.

nah you’re underestimating their power to move names in small cap stocks with high short interest.

That's absurd. People in WSB probably bought low and haven't sold at all or sold on the way up. Look at the volume. Who is shorting at these prices with this kind of activity? Who has the money to keep buying at $350 to propel the stock to $400? Definitely not WSB. I know plenty of people dipping their toes in and buying 10 or 20 shares for fun right now. But there's 55M shares trading at all time highs. That's not r…

i guess we’ll disagree there. i’m sure the big boys are playing the swings but they didn’t start this. and it’s not just Gamestop it’s a lot of names.

Re: GameStop Is Rage Against the Financial Machine

#36

Post by thebean11 »

wpasc wrote: post #21
mam2 wrote: post #7

Earlier quoted context omitted.

Or not.. people have been saying that about tesla for years..

That's a false equivalency if I've ever seen one

The companies aren't similar, but both are/were heavily shorted "meme" stocks used as examples of an irrational market or bubble. Both short squeezed, and were heavily shorted by many of the same groups.

Re: GameStop Is Rage Against the Financial Machine

#37

Post by colllectorof »

If you want an entertaining explanation of what's going on with GameStop's stock, I highly recommend these videos from Louis Rossmann:

https://lbry.tv/@rossmanngroup:a/wallstreetbets-vs-citron-re...

https://lbry.tv/@rossmanngroup:a/why-mainstream-media-s-slan...

https://lbry.tv/@rossmanngroup:a/gamestop-shorts-lose-billio...

https://lbry.tv/@rossmanngroup:a/gamestop-shorts-are-full-of...

(That's how I learned about the whole thing, which I frankly find fascinating.)

Re: GameStop Is Rage Against the Financial Machine

#38

Post by VikingCoder »

tempsy wrote: post #30
VikingCoder wrote: post #24

Earlier quoted context omitted.

Is there any way for us to know for sure, other than them announcing their positions, or losses?

the reality is all of their major shorts are being squeezed not just Gamestop, but I agree I think their CNBC interview was just a distraction and doubt they could’ve closed out their entire short position overnight.

Dumb question - could the shorts actually negotiate with Gamestop directly to get them to issue new stocks? Wouldn't that be a win-win (and the retail loses, because a) the stock is diluted, and b) no one would be "forced" to buy from them)

Re: GameStop Is Rage Against the Financial Machine

#40

Post by dannyw »

ISL wrote: post #15
jdjfktkrnj wrote: post #3

So, do people still think Efficient Market Hypothesis is a thing? If this doesn't prove that the stock market is just a video game, which decoupled from economic reality a long time ago... We've now entered the age of the meme stock market.

In the short term, the market is a popularity contest. In the long term, the market is a weighing machine. If you look at the option chains, it is clear that traders value GameStop in the long run far below the current trading price. https://www.nasdaq.com/market-activity/stocks/gme/option-cha... A November 2021 "put" at the present market price of ~$360, the right to sell GameStop stock in November at $360, is selli…

You don’t actually understand option prices. Put-call parity. The reason why options are so expensive is because of high implied volatility. Both calls AND puts are expensive; as they always will be, because if they’re not balanced, a risk free arbitrage ensures.

Here’s an article on why calls and puts must be the same price: https://robotwealth.com/why-arent-call-options-more-expensiv...

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