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Statement of SEC Regarding Recent Market Volatility

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Re: Statement of SEC Regarding Recent Market Volatility

#611

Post by itronitron »

throwaway-571 wrote: post #444
dleslie wrote: post #116

Earlier quoted context omitted.

The FOMO is palpable. There's a hurried rush of small investors hoping to turn their meagre savings into a big win, backed by the anxiety that if they don't try then they'll forever regret missing their one and only chance at a comfortable life. This sort of event would be less likely if America's wealth disparity weren't so grotesquely skewed.

It's kind of depressing when you look at these crazy success stories of lottery winners. You realize even a small bet at the right time could be life-changing. Let's say instead of buying a Latte every working days at starbucks over the last five years you had invested it in tesla stocks. Or maybe for every starbucks latte you drank, you invested the same amount in ETF and in Tesla (pay 3 latte, drink one). Where wou…

It's funny, because I was visiting Gamestop's website last November trying to find a Pink 3DS and remember thinking, 'oof, Gamestop's website is in bad shape'.

When I get the FOMO urge I think about how BBY just sucks as a store, how much better Netflix is than AMC, and how airlines regularly go bankrupt.

I believe that GameStop has a future as they have a lot of mind share and goodwill. But they need to get rid of their brick and mortar stores.

Re: Statement of SEC Regarding Recent Market Volatility

#612

Post by colejohnson66 »

klodolph wrote: post #380
ryandrake wrote: post #323

Earlier quoted context omitted.

Whenever I read about a topic that I don't know much about, part of me is always wondering if the writer is throwing all these exotic words and greek letters in there because they are really an essential to understanding the topic, or because they just want to over-complicate it to sound smart and blow their own horn. On one hand we have Occam's Razor: "the simplest solution is almost always the best." On the other w…

I don’t know how you could possibly reason about options without understanding delta, and gamma makes sense to me too since it’s just the derivative of delta as the underlying value changes.

As a math person, I’ve never heard “gamma” to mean the derivative of a change (a delta). For example, I was always taught that speed is v=delta-x/delta-t (distance over time). I’ve never heard gamma to mean that.

Re: Statement of SEC Regarding Recent Market Volatility

#613

Post by Animats »

There's nothing all that new about this. Read "Extraordinarily Popular Delusions and the Madness of Crowds", which is over a century old. It describes all the classics - a pump and dump, a Ponzi scheme, a pyramid scheme, a "bubble", "tulipomania", etc - from the first time they appeared on a large scale.

These are mostly 19th century tricks. That's when finance and newspapers got big enough to make them work at scale. The SEC was established after the 1929 bubble got so big it took down the whole country.

Meanwhile, the latest thing on Reddit is pumping Dogecoin.

In all these things, the people who get in late and don't get out early are the losers. It's zero-sum, after all.

Re: Statement of SEC Regarding Recent Market Volatility

#614

Post by [deleted] »

tompccs wrote: post #212
jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

I am so sick of this 'stay in your lane' attitude. Time and time again, experts have been shown to have consensus opinions which are wildly off from reality. You can almost set your watch to how often an outsider will analyse a situation from first principles and make money off the 'experts', especially in the stock market. You're welcome to your opinion but this appeal to authority is seriously wearing thin. Pretty…

[deleted]

Re: Statement of SEC Regarding Recent Market Volatility

#615

Post by a-dub »

tompccs wrote: post #212
jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

I am so sick of this 'stay in your lane' attitude. Time and time again, experts have been shown to have consensus opinions which are wildly off from reality. You can almost set your watch to how often an outsider will analyse a situation from first principles and make money off the 'experts', especially in the stock market. You're welcome to your opinion but this appeal to authority is seriously wearing thin. Pretty…

i think overall people are feeling a little burned by trump's anti-filter and rampant conspiracy theories that have taken hold recently and as such are retreating to respect for status and authority.

there is some good to come of it, but i do wonder if the baby is being thrown out with the bathwater. true experts can handily defeat nonsensical arguments in their fields and unusual viewpoints can enrich their thinking.

Re: Statement of SEC Regarding Recent Market Volatility

#616

Post by adriancr »

threedots wrote: post #538
adriancr wrote: post #402

Earlier quoted context omitted.

> A comment somewhere mentioned that Melvin had shorted 14%. How did they lose 3 billion at 65$ with just 14%? I call bullshit on that :)

I mean you can just do the maths, no? They probably had a few hundred million position (maybe larger) with an entry cost under <10$. There may be some puts in there too which will have been a total loss.

Ok, let's assume they shorted at 10$, they lost 3 Billion at 65$ (and say they closed the position)

So, the stock needed to be bought back was worth 3 billion at 65$, reduce the 10$ per share it was shorted at and you get 3000M/55 = 54M shares.

Total stock float of GME is ~64M, so the short % was ~80%

You see how it's way off of the 14%? (and close to impossible to close out of?)

If they did not get out then they would be very bankrupt right now.

Re: Statement of SEC Regarding Recent Market Volatility

#617

Post by stcredzero »

ditonal wrote: post #586
sailingparrot wrote: post #230

Earlier quoted context omitted.

> Time and time again, experts have been shown to have consensus opinions which are wildly off from reality No, it's just that it's not interesting when an expert is right about their domain expertise so we don't talk about it. The issue is people getting skewed by this and then inferring that it must mean, on average, that their outsider opinion is as valid as experts, but really, it's not.

If a physicists tells me something about how the solar system works, they don't have much reason to lie to me. If RobinHood tells me how clearing houses work, they have a huge reason to lie to me. Given what we say in cases like Enron, Bear Stearns, I am shocked and dismayed at the eagerness of Hacker News contributors to so readily accept whatever Robinhood tells them as 100% gospel. Where were all these experts on…

If RobinHood tells me how clearing houses work, they have a huge reason to lie to me.

If there are enough mechanisms of "Crony Capitalism" at play, to cause most of the trading apps in existence to halt trading, this is definitely something that needs to be investigated.

Likewise, if there are enough of these crony mechanisms involving collusion between Facebook, Twitter, Square, Stripe, and Visa targeting people, this also warrants investigation. It seems to be part and parcel the same sort of thing.

People have been calling stuff like this out since the 80's!

https://en.wikipedia.org/wiki/Manufacturing_Consent

Re: Statement of SEC Regarding Recent Market Volatility

#618

Post by stcredzero »

wolf550e wrote: post #231
tompccs wrote: post #212

Earlier quoted context omitted.

I am so sick of this 'stay in your lane' attitude. Time and time again, experts have been shown to have consensus opinions which are wildly off from reality. You can almost set your watch to how often an outsider will analyse a situation from first principles and make money off the 'experts', especially in the stock market. You're welcome to your opinion but this appeal to authority is seriously wearing thin. Pretty…

The non-consensus outsiders who make progress have done the reading. They know what the consensus is, they know all the concepts and the jargon, and they disagree about something. Your post can be interpreted to mean "my ignorance is just as good as your knowledge". That's anti-vax thinking and argument. That is not a way to make progress.

The non-consensus outsiders who make progress have done the reading. They know what the consensus is, they know all the concepts and the jargon, and they disagree about something.

http://www.paulgraham.com/say.html

Re: Statement of SEC Regarding Recent Market Volatility

#619

Post by ThrustVectoring »

dageshi wrote: post #36
rich_sasha wrote: post #20

Earlier quoted context omitted.

From a distance, this is all a storm in a teacup. It's a small handful of stocks, and every single one in S&P500 is waaaay bigger, in terms of trading volumes and market cap. Anything can happen, but in finance terms, this is tiny so far.

If that's the case I'm kinda confused why trading platforms keep banning trades in these particular meme stocks?

It's down to minutiae in the collateral brokers have to post to ensure that the clearing house doesn't eat losses. Trades on Wednesday aren't settled until Friday, so if a brokerage firm dies in the interim they have an obligation to complete a bunch of trades that they might not have cash for, and unwinding that exposes counterparties to the price moves in the interim. RH users have been buying a lot of meme stocks that move a lot in price, so they have to put up vast amounts of funds to ensure that nobody else suffers losses if they were to back out of the unsettled trades.

Re: Statement of SEC Regarding Recent Market Volatility

#620

Post by vegesm »

NoOneNew wrote: post #568
vegesm wrote: post #488

Earlier quoted context omitted.

Why would shorting Gamestop mean making it to go bankrupt? The falling stock price of a company doesn't cause a company to go bankrupt, the causality is in the other direction. Putting downward pressure on price is useful only if you want to do a hostile takeover.

Hi, let me google "how short sellers hurt companies" for you. First link of one practice: short and distort https://www.investopedia.com/articles/analyst/030102.asp You can google more yourself.

which is all illegal and there is no indication that was happening with Gamestop
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