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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#741

Post by delaaxe »

fractionalhare wrote: post #723
delaaxe wrote: post #715

Earlier quoted context omitted.

Naked short selling is illegal

That is not naked short selling. Naked short selling is when you sell a stock short without first borrowing it. The parent to your comment describes someone buying a stock from someone who sold it short, and turning around and it selling it short themselves. This happens organically and is not "naked." Beware the incredible amount of false and misleading information about this situation online. Things catch on in the…

Ok thanks I think I got your point but you probably worded it wrong. Some can’t buy a stock and then “short sell” it, right? He just sold it

Re: GameStop Is Rage Against the Financial Machine

#742

Post by delaaxe »

eindiran wrote: post #552
delaaxe wrote: post #547

Earlier quoted context omitted.

Whenever a human places a trade, the counterparty is almost always an algorithm or some kind of automated market maker

But behind the algorithm there is a human trader with motivations and market knowledge who is commanding it; the fact that the buyer is, in some technical sense, an algorithm doesn't seem very relevant to me.

Market makers just profit off of the bid ask spread, without “motivations” or “market knowledge”

Re: GameStop Is Rage Against the Financial Machine

#743

Post by hehehaha »

cbozeman wrote: post #623
mancerayder wrote: post #553

The part that's understated is that the short sellers engage in their own broadcasting - and no one ever REALLY knows whether to trust them. Citron Research and Muddy Waters and these others post, places like CNBC re-tweet, Bloomberg mentions it, etc. And that has a predictable effect, or an effect that's a self-fulfilling prophecy. I don't know if the David and Goliath story that played out here (if it is even reall…

It wasn't David vs. Goliath. CNBC, Financial Times, WSJ, etc. can't tell you what it really was, because they're beholden to all these Wall Street types. They don't get stories unless their relationships are cordial. 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 capita…

There’s nothing wrong with >100% short interest. Think of shorting a stock as a derivative which it is technically. In fact, if you were to add up all the outstanding interests of call options for certain stocks, you are going to get more than the float available for purchase. So does that mean call buyers are in the wrong? Oversubscribed short interest just tells you there were a lot of people short the stock with delta 1 infinite put options. I understand there’s this hate for Wall Street but really let’s at least get the math and details right.

Re: GameStop Is Rage Against the Financial Machine

#744

Post by Quarrelsome »

jondwillis wrote: post #704
cbozeman wrote: post #623

Earlier quoted context omitted.

It wasn't David vs. Goliath. CNBC, Financial Times, WSJ, etc. can't tell you what it really was, because they're beholden to all these Wall Street types. They don't get stories unless their relationships are cordial. 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 capita…

didn’t Melvin already cover? https://www.msn.com/en-us/money/topstocks/gamestop-short-sel...

people in /r/wsb are assuming these stories are planted. Given the ridiculously nervous delivery of the story when it broke by the chap on TV (has to be seen to be believed) I can understand how people would be suspicious but idk.

The suggestion is that Friday is apparently the day when the bets actually become due and then we'll actually know if Melvin did cover or lied about covering and actually doubled down.

Re: GameStop Is Rage Against the Financial Machine

#745

Post by ww520 »

gpm wrote: post #682
noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

> Hedge-fund cries foul. Doesn't like being beaten in it's own game. Have any of the hedge funds actually cried foul?

CNN just had someone talking about the government should ban people talking about the stock market on the internet.

edit: Here's the link in case people want to see it. Ignore the article about Trump (really weird to blame Trump in this case), but watch the video. https://edition.cnn.com/2021/01/27/politics/gamestop-stock-s...

Re: GameStop Is Rage Against the Financial Machine

#746

Post by jakeva »

sethammons wrote: post #649
ryandward wrote: post #646

Earlier quoted context omitted.

John Maynard Keynes quips that "in the long run we are all dead."

he also said, "the market can remain irrational longer than you can remain solvent."

Since we're doing JMK quotes, he also said "Capitalism is the extraordinary belief that he nastiest of men, for the nastiest of reasons, will somehow work for the benefit of us all."

Re: GameStop Is Rage Against the Financial Machine

#747

Post by cnxsoft »

Many people will lose money is this little game. The hedge funds deserve to lose since they took too many risks, but I'm afraid they'll be bailed out.

GameStop is bleeding money, and if the stock value is really closer to $3, then once this is out of the news, price will fall down to under $10 pretty quickly. Many smaller investors will lose out in the end.

Re: GameStop Is Rage Against the Financial Machine

#748

Post by vpribish »

garmaine wrote: post #731
dcolkitt wrote: post #711

Earlier quoted context omitted.

> A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. This is a common misconception, but fundamentally wrong. Every short sell has an equal but opposite buy. Therefore every share shorted creates a new synthetic long share. Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shar…

But once borrowed, the shares can’t be borrowed a second time. So if 100 shares are borrowed and sold short, they’re back on the market, yes. But the total number of shares available is 100, not 200.

Alice lends a share to Bob. Carol buys the share from Bob. Carol lends the share to Doug. Ellen buys the share from Doug.

The share has been lent twice.

There is one share, and Ellen owns it for real.

Everyone else has these agreements involving collateral and promises to get/give a share back.

Re: GameStop Is Rage Against the Financial Machine

#749

Post by gpm »

garmaine wrote: post #733
gpm wrote: post #682

Earlier quoted context omitted.

> Hedge-fund cries foul. Doesn't like being beaten in it's own game. Have any of the hedge funds actually cried foul?

Have you seen CNBC this week?

CNBC is a news site not a hedge fund... I didn't notice any quotes from hedge funds (but I admit I could have missed one).

Re: GameStop Is Rage Against the Financial Machine

#750

Post by vpribish »

chovybizzass wrote: post #720
delaaxe wrote: post #715

Earlier quoted context omitted.

Naked short selling is illegal

not for hedge funds.

yes for hedge funds. some market-making entities are legitimately allowed to be short without borrowing, but is it absolutely not just any random hedge fund!
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