GameStop Is Rage Against the Financial Machine

But, the premiums can be pretty juicy.

Looking at the 29Jan 320 Call options, if you were good, and called today’s top. Then you could’ve wrote the call at 145. Then held it for 90 mins, when it bottomed out at 89. Netting you a cool $56 per contract.

If you wrote 1 contract on this play, then 56 x 1 x 100 = $5600.

So, $5600 of net profit in 90 minutes. If you’re lucky. It’s best to have a large war chest to play this strategy.

But, if you’re unlucky, then a short squeeze can even happen during normal trading hours, and it would probably wipe you out.

You can call the wrong top, and the spreads are so wide, that the loss is heavier to exit the position.

And if you ran this strategy yesterday, at a lower price point, and held it overnight, then you would’ve been wiped out this morning, when the stock spiked in overnight off-market trading. So it’s best to keep this strategy to a daytrade.

I don’t recommend this strategy to anyone. The odds of you consistently calling the top, correctly, all the time, is very low.

And the crazy phenomenon going on right now, is that the retail traders, are somewhat collectively operating like a hive mind. Whether they can really succeed to achieve their objective of hitting $1000/share, remains to be seen. But, I’m not going to challenge this one, at this time.

This was arrogant idiot billionaires vs. autistic retards of the Internet, and the arrogant billionaires in this case (Melvin Capital) had the chance to walk away when they got their $2.75 billion capital injection. They could have closed their position out and taken a relatively moderate loss compared to the total destruction of the fund that they're going to be facing in two days.

The reason no one on CNBC is framing it that way, is because while Melvin Capital is the face of the short sellers, a lot of people piled on after Melvin Capital, but no one else piled on with the level of idiocy they did. So if you actually call it like it is, and remind everyone that a 139% short on a company is literally the most fucking retarded thing in finance ever, then you incur the wrath of a lot of wealthy people who are pieces of shit and will use their money as weapon.

The problem is, the arrogant idiot billionaires have been assfucking not only the American people, but a good portion of the world for so long, that they're not used to someone spitting in their face, so they doubled-down. Unfortunately for them, they forgot that when you go up against the Internet as a collective, you always... always lose. No one fights the Internet and wins.

And they're going to learn that this Friday.

A couple of weeks ago I stumbled across some youtube or whatever that made me aware that Michael Burry was long in GameStop and I thought that was quite interesting. I don't normal follow much stock/fund news or current affairs and so I'm sure I'd be one of many that stumbled across this. I then think games are all something everyone can relate to and feel they understand and have a high degree of confidence in. Covid lockdowns mean that quite a few individuals have been spending less and may have some disposable income and so a sort of fall the leader lemmings investment run happened and then generates the hype and brings more a'la bitcoin a year or two ago.

The GameStop play (as with BBB, AMC, Express, etc) are classic pump and dumps, albeit with a short-squeeze magnifier (basically equal to a DDOS amplification). And if you really traced back to the origin, I highly doubt you're going to find some Joe Nobody -- you're going to find some very well financed, planned player.

GameStop is a doomed enterprise in an obsolete space (selling physical copies of games), so it was incredible seeing WSB spin fantastical tales of the marvelous future ahead for it.

Everyone else gets some intense FOMO that leads them to piss away their own money (you can't just buy options because options on hyper-volatile stocks price that in), and then a lot of people get burned. Everyone is running around talking about how everyone made millions from WSB tips or something, it's farce.

As is always the case, a tiny number of people benefit, and a huge number of people financed their return.

The whole story seems super dumb. And the SEC is likely paying very close attention.

Loads of people throughout this discussion have absolutely no clue what they're talking about. What a low information crowd this is.

It's very effective and we should have anticipated that it would be used to move markets. I expect people on HN to recognize it. The question is, what will we do about it? It's tearing society apart and now it looks to damage our economy too.

It is well documented that authoritarian governments, including Russia and China, have invested heavily in these techniques. I don't know the source of the GameStop bubble, but if Russia/China didn't see the potential to attack U.S. society and financial markets before, they see it now and will use it.

The question is, what will we do? How do we maintain an open society, which is essential, and protect against this manipulation?

I think an essential part of the solution is the power of critical thinking and reason, the very foundations of the Enlightenment, and that the well-educated (not only them, but definitely them) have to take the lead in applying those skills, and start a social media movement in that direction. The people reading this should be leaders; unfortunately, I see them again and again allowing themselves to participate in mob psychology. The response to these events is particularly chilling. Where is the forum of intellect, knowledge and facts? Almost everything I see is misinformation and conspiracy theories.