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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#911

Post by Thorrez »

astrange wrote: post #669
wolverine876 wrote: post #666

Earlier quoted context omitted.

Can you provide some factual basis for these claims? We can type out claims without foundation endlessly; the Internet demonstrates that well; what we need is real knowledge and facts.

Are there any claims in that post?

"Claim" seems like the wrong word. It's explaining shorts, but I think it's actually doing it inaccurately. It's saying the hedge fund will have to buy the cows at the end of the month. I don't think that's accurate. I don't think shorts ever expire.

Re: GameStop Is Rage Against the Financial Machine

#912

Post by Aperocky »

onlyrealcuzzo wrote: post #893
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…

WSB is mostly buying options - not stocks directly and cashing out now (or at some top that could be in the future). The people on WSB that sold their call options and made a killing are selling those options to other people on WSB who (likely) will lose everything. And the ones with diamond hands who haven't sold yet will (likely) lose everything. So - this is like penny stock sellers in the 90s. Some little guys ma…

well, the short sellers contributed.

WSB and other investors pocketed the 5 billion from those people. And I assume some diamond hands on WSB will end up losing everything.

It's easy to understand why everyone is HODL in WSB, since that's the position you want others to hold whether you want to sell or hold. Won't surprise me if half already exited.

Re: GameStop Is Rage Against the Financial Machine

#913

Post by abfan1127 »

jaredmosley wrote: post #880
Clewza313 wrote: post #829

Earlier quoted context omitted.

Except that would potentially make GME complicit in activity that regulators are already making threatening "market manipulation" noises about. Also, if they were to issue more shares, the mere news of this would likely pop the bubble hard before they would realize any gains.

GME doesn't care if they pop the bubble though. They know their shares aren't actually worth $350 and they're not making strategic decisions based on them being worth that much. They'd much rather issue more shares, take the increase they get, and get back to their own business.

is that fair to say? certainly some of them are buying at $350 now? Some people are selling now and others are buying, setting the market price. From a selfish standpoint, it makes sense to sell now, if for nothing else, to take those profits to manipulate some other poor company, no?

Re: GameStop Is Rage Against the Financial Machine

#914

Post by smabie »

cbozeman wrote: post #136
unethical_ban wrote: post #72

So, can someone explain rationally how options/derivatives are actually useful to the economy, rather than a market manipulation and gambling mechanism? In the traditional, elementary school understanding of stock, people buy into a company because they want part ownership, and the stock goes up as the company does well and has solid financial strength. Derivatives seem to be an unnecessary accelerator.

They're not useful. They're a means of wealth extraction disguised under whatever load of bullshit someone wants you to believe. I'll even prove it to you. Ask someone with skin in the Wall Street game to explain this stuff to you, not mathematically, but in layperson's terms, so simple that a young child could understand it. They either won't be able to do it, or they won't do it. You'll get one of two answers, "It'…

I work as a quant and I'll explain it to you. Email me

Re: GameStop Is Rage Against the Financial Machine

#915

Post by callmeal »

dcolkitt wrote: post #711
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…

> 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…

>Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shares long available to buy back- 100 owned by Alice and 100 by Chuck.

That is not quite true. If after Bob has borrowed and sold 100 shares to Chuck, and then David comes along and makes an offer to Alice to buy 100 shares, Alice can only sell her shares once they are recalled. Which means Bob now has to scramble to return those shares, specially if Chuck does not want to sell (or if Chuck has lent out those shares and they need to be recalled in turn).

Re: GameStop Is Rage Against the Financial Machine

#916

Post by smabie »

cwhiz wrote: post #68

I am loving every minute of this. The "professionals" gamble on the market all the time, front run, high frequency trade, and relentless tactics to get rich at the expense of the "retail" investors. 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. If Wall St can gamble and cause a global fi…

No one is front running orders on a large scale. This does not happen.

Re: GameStop Is Rage Against the Financial Machine

#917

Post by smabie »

cbozeman wrote: post #164
koheripbal wrote: post #120

Earlier quoted context omitted.

Front Running is illegal, and companies get busted and fined for doing that. High Frequency trading is actually GOOD for retail investors because it reduces spreads and increases liquidity.

No it isn't. You know why front running isn't illegal? Because it keeps happening and companies keep getting fined for it. A "law" that allows you a merely pay a fine isn't a law, its a revenue-generating procedure. Murder is illegal. You can't pay $500,000 to the authorities and then go on about your business. For a law to have any weight, you have to be inconvenienced regardless of your financial status.

What fines? No real firms front run. Market makers are not front running your orders. This does not happen

Re: GameStop Is Rage Against the Financial Machine

#918

Post by nicholasluimy »

coryfklein wrote: post #614
Aloha wrote: post #351

Earlier quoted context omitted.

I dont feel bad for the guy who loses two grand at the casino, why should I feel bad for them?

You should feel bad for the human being who loses two grand at the casino!

empathize yes. Sympathy? Probably not

Re: GameStop Is Rage Against the Financial Machine

#919

Post by otoburb »

mehwoot wrote: post #783
SigmundA wrote: post #768

Earlier quoted context omitted.

What makes no sense to me as a layman is how can you sell something you don’t own legally? If I borrow your cow and sell it that’s illegal without consent, if you give me consent to sell the cow, there is still only one cow and ownership changes hands, there are not now two cows.

Because cows aren't really fungible, but stocks are. If I borrow $10 from you, you don't expect the literal note that you gave me back. I can give you $10 back in coins, or $10 transferred to your bank account. I can burn the $10 note you gave me, give it to a homeless person, or re-lend it to my friend. There's nothing illegal about that. On the other hand if I borrow your car, you're expecting the same car back. I…

>>I can burn the $10 note you gave me [...]. There's nothing illegal about that.

Not to detract too much from your analogy but burning money is illegal in some jurisdictions[1], and in the United States is prohibited under 18 U.S.C. §333: "Mutilation of national bank obligations"[2].

[1] https://en.wikipedia.org/wiki/Money_burning

[2] https://www.law.cornell.edu/uscode/text/18/333

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