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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#321

Post by ogre_codes »

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?

Assuming they liquidate the position before it crashes, yes.

It's very easy for retail investors to look at points in time and see stellar results. Unless they cash out some of that, before things start to drop, their massive position vanishes as quickly as it arrived.

Re: GameStop Is Rage Against the Financial Machine

#322

Post by admax88q »

maigret wrote: post #308
Apocryphon wrote: post #59

Earlier quoted context omitted.

You’re not wrong, but are there pension funds that include revenue made from shorting stocks? Seems like a reckless practice if there are.

Shorts are often (usually) a legit way to reduce risk - if the stock falls, you’re not losing everything. But that’s less entertaining to report about, so you rarely read about this in the non-technical news.

And if it doesn't fall you lose money. You can't just reduce risk without also reducing gains.

Re: GameStop Is Rage Against the Financial Machine

#323

Post by esoterica »

briandarvell wrote: post #301
esoterica wrote: post #224

Earlier quoted context omitted.

> 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. This is such hilariously clueless nonsense, the fact that it's expressed with such smug confidence and upvoted to the top of the thread is really emblematic of HN's complete ignorance of any topic outside of programming. When retail volume…

Could you elaborate a bit more on why low-fee index funds are sticking it to Wall Street?

If you’re not actively trading they’re not making any money off you.

Re: GameStop Is Rage Against the Financial Machine

#324

Post by polote »

AdmiralAsshat wrote: post #20

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes. For the record, I’m still angry about the way workers were ripped off in Britain more than three decades ago, and about the way the little guy ended up bearing the brunt for the financial implosions of 2000 and 2008. But it looks horribly to me as though the same thing is going to happen again — and…

> Reddit traders that are making a killing right now

How can you know that ? Some of them are making a killing, but how can you be sure it is the majority of them ?

It is easy to say that some hedge founds made bad bet, but I strongly think that some other hedge founds were winners. These people are professionals at making money from such events !

Re: GameStop Is Rage Against the Financial Machine

#325

Post by ds206 »

nightowl_games wrote: post #251
boringg wrote: post #218

Earlier quoted context omitted.

> This isn't true. The institutions with Short Exposure are connected to the institutions who buy Robinhood data and perform high frequency trading on those orders. Citadel and Melvin can BUY GME themselves to mitigate the risks. It is likely that a substantial amount of GME is being held by the institutions who had short exposure. It's basic risk mitigation. -- They would have to do this at great cost and loss (rumo…

Fair assessment. I am just pushing back at the narrative that this is a "win" for the little guy and a "loss" for wall street. Retail investors putting money into the market _at all_ is a net win for wall street _every time_ imo.

> Retail investors putting money into the market _at all_ is a net win for wall street _every time_ imo.

This is what I think to myself everytime I see one of those Acorn ads.

Re: GameStop Is Rage Against the Financial Machine

#326

Post by pvarangot »

rjbwork wrote: post #292
kart23 wrote: post #285

Can anyone tell me why SEC won't just step in, suspend trading, and force some kind of resolution? Its obvious that the market has been effectively broken by the short sellers. It might just make the redditors more angry and likely to hit other shorted stocks, and possibly cause markets to decline, but its the best applicable solution i see. https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_tr...

The forced resolution will be to force the shorts to cover. Screwing people that took the other side of the trade because the short sellers screwed up doesn't really make any sense to me.

Also the short-sellers are not being fooled into taking risks and neither are the call buyers. Everyone should know what they are doing.

Re: GameStop Is Rage Against the Financial Machine

#327

Post by girvo »

rjbwork wrote: post #292
kart23 wrote: post #285

Can anyone tell me why SEC won't just step in, suspend trading, and force some kind of resolution? Its obvious that the market has been effectively broken by the short sellers. It might just make the redditors more angry and likely to hit other shorted stocks, and possibly cause markets to decline, but its the best applicable solution i see. https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_tr...

The forced resolution will be to force the shorts to cover. Screwing people that took the other side of the trade because the short sellers screwed up doesn't really make any sense to me.

Though regulatory bodies “picking a winner” can happen, as unfair as it sounds. I would hope they wouldn’t in this situation though.

Re: GameStop Is Rage Against the Financial Machine

#328

Post by chromaton »

kqr wrote: post #212
piva00 wrote: post #173

Earlier quoted context omitted.

This is absolutely fucking ridiculous. Someone is getting fucked by their own leverage, they got caught, isn't that what the market is supposed to do? Kill the overleveraged non-sense to redistribute wealth to more efficient investments? It isn't a bank run to be blocked for the sake of society, this is just a bunch of rich people paying the price for risking too much... Boils my blood so deeply.

This is part of the game, though. The hardest part of gambling is not coming up with the big winning bet -- it's getting whatever counterparty to pay you once you've won. It's always been this way, in sports, in horses, and on Wall Street. People come up with all sorts of reasons to not pay you and you have to shape your strategy around this. Aaron Brown talks about how being a successful gambler is not about a few h…

Business Adventures has the tale of the Piggly Wiggly short squeeze of 1923. The old boys of the NYSE changed the rules to help the shorts and undo trades after the fact.

Re: GameStop Is Rage Against the Financial Machine

#329

Post by jaxwerk »

ping_pong wrote: post #66
dannyw wrote: post #33

Earlier quoted context omitted.

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.

You don't understand. The original multi million dollar positions with WSB are static now. They're not trading anymore. They can't possibly boost the stock price any further. The way the stock price goes up is by more volume coming in at the highs. But we are talking 57 M shares traded at noon today with outstanding float of 65M. Those are professional day traders propelling the stock. Buying high and selling higher.…

Margin calls are surely coming for large short positions, starting Friday and likely continuing in coming weeks. If the short positions need to cover, there's forced demand.

Re: GameStop Is Rage Against the Financial Machine

#330

Post by fredophile »

admax88q wrote: post #315
AdmiralAsshat wrote: post #20

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes. For the record, I’m still angry about the way workers were ripped off in Britain more than three decades ago, and about the way the little guy ended up bearing the brunt for the financial implosions of 2000 and 2008. But it looks horribly to me as though the same thing is going to happen again — and…

> The "little guy" refers to the Reddit traders that are making a killing right now, with the expectation that eventually the stock price will crash again. The reddit traders are only making a killing if they're selling these inflated positions. At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. There's…

It's a short squeeze. The guys left holding the bag are people that are covering their short positions in the company. The average retail investor is not shorting stocks.. There will probably also be some people that try to jump on the trend too late but that isn't who is being hurt right now.
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