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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#131

Post by shadowgovt »

mdoms wrote: post #111
this_user wrote: post #87

Earlier quoted context omitted.

> I see no reason why "retail" traders can't fuck around on Robinhood and cause some meme stocks to explode. It's called 15USC78i "Manipulation of security prices" [1]. It is unlawful to transact just for the purpose of forcing others to transact. Going through a fund's 13F filings, and deliberately driving up the prices of put options they sold should fall squarely into that area. And there are more than enough post…

There's a pretty simple defense here. "I saw the posts on reddit and wanted to get in on the upward swing". Efficient markets at work. Unless you can tie real identities to the reddit posts there's not much to be done.

I would not assume that de-pseudonymizing Reddit accounts is impossible, especially if large amounts of money are on the line.

Reddit complies with FBI requests to hand over account data.

Re: GameStop Is Rage Against the Financial Machine

#132

Post by ve55 »

I know everyone is having an absurd amount of fun watching this and laughing (so it seems), but I think we should be more aware of the many ways in which this is bad, which definitely includes millions of retail investors losing their money when they buy at the peak, use too much leverage, and so on.

The idea of "Don't invest what you cannot afford to lose" has gone from a mantra to an outright joke that many investors now purposefully ignore, and not everyone can end up on the right side of this at the end of the day.

This is without mentioning what type of institutional consequences we may see as a result, which I think there will be many including regulatory, but it's too hard to predict exactly what, given the mess that we're in.

Again, the memes and redditors becoming millionaires are funny and I wish everyone the best, but there will be a vastly under-reported dark side to this story as well; life cannot literally just be everyone getting free money from nowhere with no downsides.

Re: GameStop Is Rage Against the Financial Machine

#133

Post by nceqs3 »

VikingCoder wrote: post #38
tempsy wrote: post #30

Earlier quoted context omitted.

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)

Related...

Hedge funds have "asked" companies to PURPOSELY DEFAULT on their debt before.

Great Matt Levine piece on this: https://www.bloombergquint.com/view/blackstone-may-do-its-cl...

Re: GameStop Is Rage Against the Financial Machine

#134

Post by fairity »

It's impossible to time the top, but one thing you can say with certainty is that eventually the price of these stocks will come back down (because the underlying firm is clearly not worth its market cap).

Hence, the smartest bet here seems to be buying put options that expire far out. Currently, the price of the $320 GME PUT expiring in Jan 2022 is $240. That seems like free money?

Re: GameStop Is Rage Against the Financial Machine

#135

Post by mdoms »

kylebenzle wrote: post #85
colllectorof wrote: post #37

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 t…

Just SO pumped that library is being used in the real world to host videos!

I didn't even get through 4 minutes of the first video without a huge amount of buffering. Is this on youtube?

Re: GameStop Is Rage Against the Financial Machine

#136

Post by cbozeman »

unethical_ban wrote: post #72

So, can someone explain rationally how options/derivatives are actually useful to the economy, rather than a market manipulation and gambling mechanism? In the traditional, elementary school understanding of stock, people buy into a company because they want part ownership, and the stock goes up as the company does well and has solid financial strength. Derivatives seem to be an unnecessary accelerator.

They're not useful.

They're a means of wealth extraction disguised under whatever load of bullshit someone wants you to believe.

I'll even prove it to you. Ask someone with skin in the Wall Street game to explain this stuff to you, not mathematically, but in layperson's terms, so simple that a young child could understand it. They either won't be able to do it, or they won't do it. You'll get one of two answers, "It's really complex." or "It can't be simplified."

When you hear this kind of shit, you're can safely deduce one of two things:

1. The person in question doesn't have a deep understanding of the phenomenon or principle they're trying to explain.

2. The person in question isn't interested in explaining it because it directly affects them.

Ask a Ph.D.-holding, teaching nuclear physicist to explain how a star works. They'll be able to break it down for a 5 year old, a 15 year old, and a 24 year old graduate student, at various levels of complexity.

Ask a Ph.D-holding investment banker or hedge fund manager how all this works. They don't want you to know, because it isn't creating value. Not the kind of value an Amazon or a Tesla creates. It creates value for them and for the large investors they represent. Not for you the layperson.

Re: GameStop Is Rage Against the Financial Machine

#137

Post by littlestymaar »

psim1 wrote: post #99
cwhiz wrote: post #68

I am loving every minute of this. The "professionals" gamble on the market all the time, front run, high frequency trade, and relentless tactics to get rich at the expense of the "retail" investors. Now they are upset that apps like Robinhood has provided unprecedented access to the markets. Their exclusive access to insane gambling nonsense is being torn down in real time. If Wall St can gamble and cause a global fi…

This kind of market folly also has an effect on long-term investments, e.g. retirement funds. What is there to love? I hate that unshowered basement-dwellers are coordinating to screw around with the market and potentially my retirement money. Get an honest job, guys.

Retirement funds are a scam: when prices go up, funds manager take their bonus, when it goes down, the funds shareholders (that is, everyone) swallow up the loss. It even a double-edge scam, because now people are supposed to stand up for the finance behemoth because they holds their retirement hostage.

Re: GameStop Is Rage Against the Financial Machine

#138

Post by jimbob45 »

koheripbal wrote: post #125
xorx wrote: post #117

Earlier quoted context omitted.

Yes, but retail is going to get destroyed in the end. The power elite always get what they want. Right now there appear to be curbs on GME and AMC buy orders for TD Ameritrade and Schwab customers. If you have to pull strings with your drinking buddy from Dartmouth to blow up a bunch of propertyless zoomers in order to prevent a margin call on the account you've leveraged to buy your house in the Hamptons, then that'…

Very likely is that the SEC is making phone calls to the big trading firms. Firms don't restrict transactions like this much voluntarily. They are going to call the Reddit CEO and have wsb shut down under the threat of SEC enforcement actions. Looks like the wsb discord is down.

Same stuff goes down on 4chan and several other sites. Not to mention the fact that the SEC has neglected to investigate insider trading for years now.

IMHO why the fuck is shorting legal to begin with. Short insurance should be mandatory for short trading.

Re: GameStop Is Rage Against the Financial Machine

#140

Post by Blackstone4 »

cwhiz wrote: post #68

I am loving every minute of this. The "professionals" gamble on the market all the time, front run, high frequency trade, and relentless tactics to get rich at the expense of the "retail" investors. Now they are upset that apps like Robinhood has provided unprecedented access to the markets. Their exclusive access to insane gambling nonsense is being torn down in real time. If Wall St can gamble and cause a global fi…

I believe you are far off the mark here. Retail investors are well within their rights to drive up a stock to what could be above fair market value....some may well lose money in doing so. The whole narrative around retail vs. hedge funds/wall street is naive to say the least...people in financial services are worried that retail investors may lose a lot of money here which may dent confidence in the market.

The irony here is that you believe the market is a mockery which most of the time it isnt but at times it can be irrational. This is clearly one of those times....as an investment professional.....I look at this and see the irrationality of the price which is not underpinned by cash flow or a fair valuation close to the price...which is called fundamental investing and not trading like what is happening here.

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