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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#401

Post by mrkstu »

Traster wrote: post #347
fredophile wrote: post #330

Earlier quoted context omitted.

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.

The second that the shorts have covered the price isn't going to drop to $90, it's going to drop back to $20 and most of the WSBers who were holding out for $2000 will lose their shirts. The shorts are going to lose, no doubt. But once they've lost, the stock price is probably $20. A lot of WSBers are going to be holding stock at that point, and possibly on margin. And that stock is going to be a crappy retail stock.…

They can cover their initial capital outlay pretty easily by selling a small number of shares on the way up.

Re: GameStop Is Rage Against the Financial Machine

#402

Post by xxpor »

chrisseaton wrote: post #25
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…

Aren't almost all companies like this an integral part of almost everyone's pensions? Through your pension you're probably an investor in tens of thousands of companies and funds.

Who the hell has a pension any more?

Re: GameStop Is Rage Against the Financial Machine

#403

Post by codesnik »

hbosch wrote: post #356
fredophile wrote: post #330

Earlier quoted context omitted.

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.

Many of those shorts are exiting their positions, or already have, and taken their losses. They're the ones who can afford their losses. Perhaps there are some funds still holding out their end of the short war, but by the time this is all over... like over over... it will be retail traders selling inflated positions to other retail traders.

well, true, but people are still reporting very high amount of short positions.

Re: GameStop Is Rage Against the Financial Machine

#404

Post by toomuchtodo »

zinclozenge wrote: post #65
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…

I didn't watch all the videos, but so far as I write this post, it does not appear that shorts have covered, or started covering (at least as of this morning). It seems like the price hike is due to big buyers and gamma squeezes. There's been systematic short attacks in an attempt to drive the stock down, but they keep getting neutralized by big buyers. It's been a wild ride.

Short interest is still over 100 after today’s close. Watch for the gamma squeeze on Friday.

Re: GameStop Is Rage Against the Financial Machine

#405

Post by onion2k »

elliekelly wrote: post #49
ISL wrote: post #32

Earlier quoted context omitted.

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…

And (no one seems to be talking about this) but there's definitely a systemic cost. Going forward, how do you effectively manage the risk of one of your positions becoming a meme? This happening once is an interesting situation and I've certainly enjoyed watching it play out. If it happens repeatedly it will definitely start to undermine the investing public & market participant confidence in the market. That's certa…

Going forward, how do you effectively manage the risk of one of your positions becoming a meme?

Hide your position better. Put out fewer signals. Lobby to make trades secret.

Re: GameStop Is Rage Against the Financial Machine

#406

Post by jariel »

Sadly, those piling on are much more likely to have their shirts lost than the short sellers who will take a loss and move on. When it crashes, it will be the RobinHooders left holding the bag and many of them stand to lose a lot to make a point, possibly much more than they thought.

I'm not happy that Musk is getting in on this, egging on crowds to take risks that might have material risks on their lives. He stands to lose nothing.

Finally - nobody seems to be talking about 'Game Stop'. Their CEO/CFO in reality must be soiling their pants under this kind of stress, nobody wants to be the pinata.

If the kids want to be smart, they can act conscientiously and organize a fund to structure initiatives they deem worthy. But then they have to face the reality that 85% of most of business is fairly 'reality driven'.

Weirdly - the most rational thing for executives to do, at this very moment - is to sell all of their shares to the mob. 'Now you own it'.

Re: GameStop Is Rage Against the Financial Machine

#407

Post by solaxun »

silexia wrote: post #366
Traster wrote: post #347

Earlier quoted context omitted.

The second that the shorts have covered the price isn't going to drop to $90, it's going to drop back to $20 and most of the WSBers who were holding out for $2000 will lose their shirts. The shorts are going to lose, no doubt. But once they've lost, the stock price is probably $20. A lot of WSBers are going to be holding stock at that point, and possibly on margin. And that stock is going to be a crappy retail stock.…

I sold a GME call option with a strike price of $320 and expiration in July today for $200. A pump and dump by novices is easy money if you know how to play it. Everyone knows this is going to crash, the question is when?

You got balls, yes the IVOL is insane and that's a nice premium, but if for some reason you have a repeat of today, you're out $20K plus. This thing will crater, yeah, but shorting it is insane and option volatility is ridiculous right now.

Re: GameStop Is Rage Against the Financial Machine

#408

Post by scarmig »

SimonPStevens wrote: post #353
scarmig wrote: post #260

Earlier quoted context omitted.

For the interested: https://www.ft.com/content/1fcb4d60-b1df-11e8-99ca-68cf89602... "Was this the right call? I think so. All our competitors also shunned any photos of Manhattan bank branches. The right to free speech does not give us right to shout fire in a crowded cinema; there was the risk of a fire, and we might have lit the spark by shouting about it." Enraging. You're allowed to shout fire in a crowded theate…

While I mostly agree, it is a touch more subtle than this metaphor. Shouting fire in a crowded theatre doesn't typically cause the fire to get worse. A major newspaper breaking news of an impending bank run, does have the likelihood of actually being the thing that triggers the bank run, or maybe making it much worse.

Just because I love torturing an analogy until I can get it to confess all its sins...

It's most like a theater having a squad of firefighters on hand, who most people ignore, as the theater has told them that the usher will let them know if a fire gets out of hand. One day the usher sees all the firefighters freaking out and quietly running for the exit, and his response is to flee for the exit himself and leave everyone remaining to fend for themselves.

I do get the moral complexities here, but the takeaway for us plebs in the audience is to not trust the usher to look out for our lives.

Re: GameStop Is Rage Against the Financial Machine

#409

Post by jermeh »

majormajor wrote: post #283
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…

How much of "wall street" would lose major money off this? Just a few hedge funds? Is that even that meaningful in the long run or big picture?

It's worth noting that these funds blowing up causes large sell-offs of their other holdings, which can in turn cause prices of those assets to fall. Falling prices can cause more sell-offs, and can spiral. Nobody really knows what's going to happen as a result of this since it's pretty unprecedented. IIRC the SPX is down ~3% and VIX is up 60% today.

Re: GameStop Is Rage Against the Financial Machine

#410

Post by smm11 »

nightowl_games wrote: post #124
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…

> For them to win this they need to keep putting more money into the fire which pulls in bigger and bigger fish. 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…

Tell that to the guy up $31 million.
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