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WallStreetBets vs WallStreet: It's not about the money anymore

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Re: WallStreetBets vs WallStreet: It's not about the money anymore

#351

Post by colllectorof »

dcolkitt wrote: post #79
mancerayder wrote: post #55

They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system? A CEO of one company can call up his connections in retail trading platform firms, CNBC, and Nasdaq and protect his profits? Why is Reddit the scandal and not that? Reddit is full of rocket emojis and YOLO jokes. But what we see here, especially with the moralizing about gambling, is an…

Robinhood is a free service. The customers don’t pay anything. If the order internalizers decide to stop paying them for their order flow, then they have to route to the exchanges. which charge fees. Trading is still ongoing at the exchanges. It’s just the free platforms, where it’s shut down. If someone wanted guaranteed access to the exchange, then they shouldn’t have used a free broker. Are you saying that Robinho…

This doesn't really answer the main question above. How is this not evidence of a corrupted market system?

Free market assumes that buyers can make their own decisions. This is a fundamental requirement. If you are "free" to decide something, but then your decision gets overridden when it doesn't suit a particular third party, you aren't really free. The mechanism of enforcement and excuses given afterwards don't change the fundamentals.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#352

Post by lordnacho »

recursive wrote: post #260
lordnacho wrote: post #41

Although there is definitely a David/Goliath fairness scandal in here, this piece doesn't seem to know the difference between market makers, brokers, and hedge funds.

And... what would that be?

Market maker: guy who makes money standing in the market all day so that when you come, you don't have to wait hours for a dude who wants to buy your shipment of pork.

Broker: offers you access to the market, and often lends you money as well. Needs scale, is often a lot of marketing, both in getting the customers, and in getting the customers to actually trade.

Hedge Fund: Umbrella term for an investment company that can do a very wide range of things. They can buy art, or fund litigation. Often we just mean they buy and sell stocks, and take some of the profits when things go well.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#353

Post by mattkrause »

ketamine__ wrote: post #311
bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

> Ultimately, a few medium-sized hedge funds were caught doing something stupid Shorting a company that sells a physical product in malls during a pandemic is stupid? It seems their intuition is correct but there was a black swan event.

Like everything, it’s a matter of degree.

Would I start a company to sell physical video games, in malls, in a pandemic? Hell no.

Would I short it to the extent that it the shares become ‘rare’ enough to induce a lot of demand? Also, hell no.

Both extremes are....not clever.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#354

Post by tomp »

snowwrestler wrote: post #326
dahdum wrote: post #118

Earlier quoted context omitted.

In this case people buying stock weren't hoping on a greater fool to sell it to later. By a large margin, more shares were sold short by a handful of hedge funds than even exist. As the price rises the expectation was/is they are forced to buy back to cover at any price . It's entirely possible a majority of retail investors make a killing and a few large funds get liquidated. At least it was until the coordinated ac…

These two thoughts are incompatible: - “We’re going to put these hedge funds into bankruptcy” - “These hedge funds will buy all our stocks at inflated prices” If the hedge funds can buy all the stock, they’re not at risk of going bankrupt. And if they are at risk of going bankrupt, they can’t buy all the stock at inflated prices. A lot of retail investors are going to lose money when this bubble pops. /r/wsb has not…

The hedge fund(s) have billions of dollars of assets/investments. So they can buy a lot of stock and “shut down” (i.e. make -90% returns for their unfortunate investors) without actually going “bankrupt”.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#355

Post by w23j »

bilekas wrote: post #295
bvirb wrote: post #225

Earlier quoted context omitted.

https://www.powercycletrading.com/what-is-a-high-short-inter... . > Short interest as a percentage of float above 20% is extremely high > A high NYSE short interest ratio means that the stock market as a whole is vulnerable to a “short-squeeze.” It could rise quickly if new economic data, political news, or other types of information are released that make investors more optimistic. GME was shorted 140%. No idea if 2…

I'm pretty stupid on this, but how does one short for +100% is that not naked shoring ?

From https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga...:

There are 100 shares. A owns 90 of them, B owns 10. A lends her 90 shares to C, who shorts them all to D. Now A owns 90 shares, B owns 10 and D owns 90—there are 100 shares outstanding, but190 shares show up on ownership lists. (The accounts balance because C owes 90 shares to A, giving C, in a sense, negative 90 shares.) Short interest is 90 shares out of 100 outstanding. Now D lends her 90 shares to E, who shorts them all to F. Now A owns 90, B 10, D 90 and F 90, for a total of 280 shares. Short interest is 180 shares out of 100 outstanding. No problem! No big deal! You can just keep re-borrowing the shares. F can lend them to G! It's fine.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#357

Post by bovine3dom »

bilekas wrote: post #295
bvirb wrote: post #225

Earlier quoted context omitted.

https://www.powercycletrading.com/what-is-a-high-short-inter... . > Short interest as a percentage of float above 20% is extremely high > A high NYSE short interest ratio means that the stock market as a whole is vulnerable to a “short-squeeze.” It could rise quickly if new economic data, political news, or other types of information are released that make investors more optimistic. GME was shorted 140%. No idea if 2…

I'm pretty stupid on this, but how does one short for +100% is that not naked shoring ?

When you short a share, you borrow a share from someone who owns it and sell that share to someone else.

If the person who bought the shorted share lends it to someone else to short, one share has been shorted twice.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#358

Post by FabHK »

bilekas wrote: post #295
bvirb wrote: post #225

Earlier quoted context omitted.

https://www.powercycletrading.com/what-is-a-high-short-inter... . > Short interest as a percentage of float above 20% is extremely high > A high NYSE short interest ratio means that the stock market as a whole is vulnerable to a “short-squeeze.” It could rise quickly if new economic data, political news, or other types of information are released that make investors more optimistic. GME was shorted 140%. No idea if 2…

I'm pretty stupid on this, but how does one short for +100% is that not naked shoring ?

Entity A holds 100 shares and lends 80 to B, who shorts it by selling it to C, who lends 60 to D, who shorts it by selling it to E.

Now there are 240 long positions (100 A, 80 C, 60 E), and 140 short positions (80 B, 60 D), for a net 100 long, as before.

Short interest is 140/100 = 140% of the shares outstanding.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#359

Post by d33k4y »

kev_da_dev wrote: post #50
bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

How is disabling purchases and broker-wide outages not bolstering hedge funds? It's government intervention no matter how you look at it. Just because it's not a direct capital infusion does not make it any less bad

Trading through Royal Bank of Canada's platform has been down all morning.

https://financialpost.com/news/fp-street/rbc-online-banking-...

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#360

Post by willis936 »

_jal wrote: post #229
willis936 wrote: post #87

Earlier quoted context omitted.

That’s called being civil. Would you prefer they instead break the law to have their voices heard? Do you want wall street suits to fear for their life?

There was a murderous insurrection bent on overthrowing democracy about 3 weeks ago. I rather think tempers are high enough that you'd get a lot of affirmative answers right now.

1. It failed.

2. It was stupid.

3. It violated the principles of our society.

That is the point I’m trying to demonstrate. Solutions come from within, not without.

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