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GameStop Is Rage Against the Financial Machine

bloomberg.com

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Re: GameStop Is Rage Against the Financial Machine

#191

Post by cannabis_sam »

Blackstone4 wrote: post #140
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 iron…

>people in financial services are worried that [this will] dent confidence in the market.

They they don’t give a single fuck about retail investors.

(Outside of PR initiatives of course)

Re: GameStop Is Rage Against the Financial Machine

#192

Post by beervirus »

arafa wrote: post #154
krok wrote: post #128

Earlier quoted context omitted.

You are missing something - these aren't naked shorts. The fact that more than the whole float is out on loan does not imply that naked shorting is going on.

Please explain. I thought this was the whole purpose behind hedging, was to avoid the short squeeze. Are people reneging on the purchase agreements or overpromising? How can we know these aren't naked shorts and if so, why are they still facing the short squeeze?

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

See footnote 3. "This does not necessarily mean a lot of people are doing evil illegal nefarious naked shorting! Really, I promise! There is no special limit on shorting at 100% of shares outstanding! Here is an explanation of how options market makers (discussed below) are allowed to short without a locate, but I want to offer an even simpler explanation. 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, but190 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."

Re: GameStop Is Rage Against the Financial Machine

#193

Post by boring_twenties »

bern4444 wrote: post #55
ipnon wrote: post #39

Maybe Robinhood's mission of democratizing finance is succeeding. The locus of power is being sucked out of Wall Street into a lumbering giant in the hills. My question is: how isn't this the most useful outcome for the most people?

It absolutely is. This is competition forcing entrenched companies to adapt and compete. Funds will have to compete by offering new financial products/models/offerings/services etc. The public now has access to information and means of trading at a level that was never before possible. All the funds must be crazy upset since their once cornerd industry, gated by terminology, tools, information and institutional knowl…

Yes, except the stated (and true) reasoning is "because fuck you, that's why."

Re: GameStop Is Rage Against the Financial Machine

#194

Post by amalter »

dheera wrote: post #172
drzoltar wrote: post #159

Earlier quoted context omitted.

I’m worried what will happen down the road. Robinhood is likely getting super valuable data on this. Combine that with correlating post activity on Reddit and you have a recipe for obliterating the arbitrage of retail investors. These hedge funds will also buy the data that Robinhood freely sells [1]. Sure, squeezes like this will still happen every so often, but on average the hedge funds will win more in the long r…

Really the only thing the hedge funds could do to "win more" in the long run is to stop shorting stocks en masse. The more they short sell, the more this can be pulled off again and again. Which is good IMO, I'd be happy in a market where short selling and negativity in general just isn't a thing. If you aren't optimistic about a company just stay out.

Hard no! I want scams and shady schemes uncovered. What a disappointment that Herbalife wasn't brought down by the shorts.

I'm struggling to even understand what a market with "no negativity" means. We want to evaluate firms with a critical eye. If they are mis-valued, that serves no one.

Re: GameStop Is Rage Against the Financial Machine

#195

Post by xnx »

Would the real power move be for everyone to pull their money out of the stock market? I realize that's not an option for those who don't already have money in it. If a few small players can expose the ponzi scheme/grift that is the modern stock market, that sounds pretty good to me.

Re: GameStop Is Rage Against the Financial Machine

#196

Post by piva00 »

psim1 wrote: post #153
littlestymaar wrote: post #137

Earlier quoted context omitted.

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.

Within the United States, you will have a hard time finding a company with a traditional pension system. Almost all use 401(k) or similar retirement systems. If it is a scam, it is a well-supported scam.

Pensions funded by current workers towards the pensioners are also very widespread worldwide, doesn't mean they aren't an unsustainable practice.

The same can be the case for 401(k)s and similar systems. And I say that living in Sweden where the majority of my pension will consist of funds that I can manage myself the split, so I should believe in this system for my own sake.

Re: GameStop Is Rage Against the Financial Machine

#197

Post by rabuse »

mdoms wrote: post #166
boringg wrote: post #23

Earlier quoted context omitted.

I don't think you understand what's happening here. There's only so much volume available as a result of the short positions. WSB et al are putting in money on a long hold. As a result that drives up the price. Yeah gamma's are in for sure making money. There are some people who have made multiple millions. One individual sitting at $31M currently on a $50k investment. Some retail will lose, but wall street instituti…

> One individual sitting at $31M currently on a $50k investment. What happens when one tries to cash out this kind of position? Does he or she actually walk away with $31M?

Yes. The large order is placed on the market, and it would be gobbled up at this point in time.

Re: GameStop Is Rage Against the Financial Machine

#198

Post by cwhiz »

this_user wrote: post #87
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 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 are some base requirements for market manipulation that are not met here. Namely, lying. You're allowed to tell your "friends" they should buy a stock.

Re: GameStop Is Rage Against the Financial Machine

#199

Post by arafa »

krok wrote: post #188
arafa wrote: post #154

Earlier quoted context omitted.

Please explain. I thought this was the whole purpose behind hedging, was to avoid the short squeeze. Are people reneging on the purchase agreements or overpromising? How can we know these aren't naked shorts and if so, why are they still facing the short squeeze?

You can have a short squeeze without naked shorting. Shorts who aren't naked have borrowed the stock from someone. If that person asks for it back, they have to go out and buy it in order to return it. At least in theory, if retail investors buy up the stock, some of the institutional investors who own it, and who have lent it out, will sell it to them. This could mean that they recall lent stock. As this happens, sh…

So it seems the issue is that people have borrowing agreements that can be recalled early (seems like it functions like a margin call in a way). Call it half-naked shorting, I guess. Still seems risky. I feel like they could've just bought call options and called it a day instead. Maybe that's too naive or call options are hard to find/pricey for Gamestop?

That still doesn't explain how you know folks aren't naked shorting. Maybe you can read the trades?

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