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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

#201

Post by Blackstone4 »

cannabis_sam wrote: post #191
Blackstone4 wrote: post #140

Earlier quoted context omitted.

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)

Well I work in financial services and I care about people including retail investors which disproves your point. Everything is not black and white. There are of course people in the sector who dont care. There are a mix of views.....

Re: GameStop Is Rage Against the Financial Machine

#202

Post by [deleted] »

bart_spoon wrote: post #152
fairity wrote: post #134

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?

Note that $240 is the price of a put for a single share, which are typically bought in increments of 100 with options. So buying a single one of those options requires $24,000. There are definitely people spending that kind of money over in WSB, for given the volatility nature of the meme stock, its a lot of money to put on the line for anyone not in the WSB mindset, or who isn't so flush with cash that that's a drop…

[deleted]

Re: GameStop Is Rage Against the Financial Machine

#203

Post by cwhiz »

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.

Ha! Maybe the WSB traders should go get a "real" job at a hedge fund where they can do the same insane gambling, only now it's "professional."

How do you think the recession happened? It wasn't retail investors gambling on the housing market.

Re: GameStop Is Rage Against the Financial Machine

#204

Post by arafa »

beervirus wrote: post #192
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?

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 explanatio…

Right, seems like a similar problem to banks and leverage. People can short more in aggregate than exists the same way the money multiplier exists for banks. But there are bank runs and it's built on trust, so that's risky too and we make people hold on to a certain amount to cover what they lend.

I guess I'd just prefer they use call options to cover the shorts instead of borrowing. No leverage or multiplier effect there. Gets too high, just execute the call. Am I also missing something there?

Re: GameStop Is Rage Against the Financial Machine

#205

Post by boringg »

alfl wrote: post #147
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…

WSB is trying to get stock removed from the pool available for shorts as well to break the cycle of shorts borrowing the stock, selling it, and then borrowing it again and selling it again.

Exactly. Add that people are supposed to be buying stocks and not allowing the brokers to lend them out to shorts (squeezing supply further).

Re: GameStop Is Rage Against the Financial Machine

#207

Post by chasely »

thepasswordis wrote: post #86

There's a mantra among these people of "I just wanted to play video games, why couldn't you leave me alone?" The culture of a lot of redditors and internet trolls in general seems to be that they feel like they are the eternal punching bag of society. They were the punching bag in high school, they didn't get into a good school (or go to college at all), and now they're the punching bag of society as "incels" or "whi…

The people that are getting the highest praise in the subreddit are probably not in that group. We're seeing people investing $10^4 to $10^5 in GME.

If they are gambling their entire life savings away, then I guess they got lucky this time but I do hope they see this as the anomalous event that it is. I have invested a small amount into the WSB "portfolio" and have similar great returns. But given that I only do this with the "play" money in my portfolio, I'm not retiring because of it.

Re: GameStop Is Rage Against the Financial Machine

#208

Post by cwhiz »

koheripbal wrote: post #120
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…

Front Running is illegal, and companies get busted and fined for doing that. High Frequency trading is actually GOOD for retail investors because it reduces spreads and increases liquidity.

Ha! Not only does front running happen all the time, but high frequency trading is de facto legal front running. Just beat them on a shorter or faster wire.

The whole thing is rigged.

Re: GameStop Is Rage Against the Financial Machine

#209

Post by cwhiz »

krok wrote: post #128
arafa wrote: post #101

Am I missing something in the Gamestop news that isn't "hedge fund gambles billions on naked shorts and loses"? That seems like a real blunder on their part. In other contexts we would just call this gambling, I think. Shorts have infinite liability, not hedging them is not something I can get behind.

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.

How can you get to a point where 140% of the shares are shorted without naked shorts?

Re: GameStop Is Rage Against the Financial Machine

#210

Post by loosetypes »

beervirus wrote: post #161
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'…

> Right now there appear to be curbs on GME and AMC buy orders for TD Ameritrade and Schwab customers. Yes indeed. Ameritrade won't even let me exercise the calls I already own. It's ridiculous.

Source for Schwab?
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