541–550 of 1001 posts
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For those downvoting: that‘s u/DeepFuckingValue. He got laughed off by WSB for a year and is now making millions every day. Turned 50k to 48 million as of today.
If he sells prior to to the fall, that is
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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.…
You're forgetting the stock is 125% over shorted. There literally isn't enough stock for shorts to cover their current positions. That's why there is potential for infinite, (huge) gains as long as everyone holds.
In reality, when a short covers they buy back the stock and pay back the broker or market maker they borrowed it from. Then the broker or market maker sells it again. Then the short can buy back the same share, over and over again, as long as they can find someone to sell it to them. That "as long as they can find someone to sell it to them" is what's going on here - if everybody HODLs, the stock doesn't circulate, and the shorts have to pay increasing amounts to incentivize other weak hands to sell. But total short interest > 100% doesn't mean anything other than that there are a lot of shorts whose need to cover might blunt some price declines. Unless those particular shorts are right up against their margin limits, they can just hold the short position open until WSB loses interest.
I am tired of this misguided narrative that pits retail and r/wsb vs big bad wolf Wall Street hedge funds. This is not David and Goliath. There are hedge funds with deep pockets on both sides. Retail traders do not run sophisticated algos to jam the price 15 minutes from the open because they want to neuter circuit breakers. C’mon guys...
I am tired of this misguided narrative that pits retail and r/wsb vs big bad wolf Wall Street hedge funds. This is not David and Goliath. There are hedge funds with deep pockets on both sides. Retail traders do not run sophisticated algos to jam the price 15 minutes from the open because they want to neuter circuit breakers. C’mon guys...
I would like to hear more about this. Has anyone found details in this particular case?
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> 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…
> 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. So basically like almost every other trade? Every buyer needs a seller and vice versa. If you're active in the market, why do you think you're right on any particular trade and the person on the other end is wrong?† * If you're buying, why is the other…
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> 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…
That's not the point. This is a purely technical play, fundamental valuation methods have been thrown out the window a long time ago. Game stop is maybe worth 5-40$, but these reddit WSBers think the stock will keep rising due to the short squeeze, beyond 1000$ even. Just grab some popcorn and watch the show.
What fundamentals make you think that? That's substantially discounted vs revenue.
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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…
Since you're nice and explaining things...what happens if a naked short gets called in but literally no one will sell any stock for any amount of money, so the shorter can't fulfill their obligation? Obviously not going to happen with GME or anywhere realistically, but I'm just curious how that would be handled.
The fee could be quite punitive, or fairly trivial depending on the market. In some markets failure to deliver would be a very big deal and multiple could lead to some sort of disciplinary action. In other markets they might be commonplace for whatever technical reason, and everyone expects that they will happen, just tries to avoid them because of the fee.
There are various theories that in certain markets everyone fails to deliver all the time and it means that there isn't enough of whatever to meet all the obligations. I can't really comment on how much they make sense.