251–260 of 410 posts
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It’s the retail volume that is breaking things, but yeah other are riding momentum.
Exactly as I said... this is not just retail. Not 20B in a single trading day.
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Did you read the SEC release? “But the SEC’s order finds that two algorithms used by Citadel Securities did not internalize retail orders at the best price observed nor sought to obtain the best price in the marketplace”
Presumably > [...] the best price observed [...] > [...] the best price in the marketplace [...] refers to the prices that they can get through all sources (ie. including PFOF firms aka market makers), not just NBBO.
It should be noted that Melvin Capital returned over 50% in 2020[1], 44% in 2019[2], and has averaged above 30% annual returns since inception[3]. In other words, even though this is definitely painful, even inclusive of this event, it's one of the best performing hedge funds of the past decade. [1] https://www.wsj.com/articles/citadel-point72-to-invest-2-75-... [2] https://www.bloomberg.com/news/articles/2019-07-19/…
It should be noted that Melvin Capital returned over 50% in 2020[1], 44% in 2019[2], and has averaged above 30% annual returns since inception[3]. In other words, even though this is definitely painful, even inclusive of this event, it's one of the best performing hedge funds of the past decade. [1] https://www.wsj.com/articles/citadel-point72-to-invest-2-75-... [2] https://www.bloomberg.com/news/articles/2019-07-19/…
Like a bankrupt gambler returning to the casino after getting bailed out by their parents, Melvin will be back to the shorting slot machines soon enough.
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Presumably > [...] the best price observed [...] > [...] the best price in the marketplace [...] refers to the prices that they can get through all sources (ie. including PFOF firms aka market makers), not just NBBO.
Doesn’t this still mean Citadel Securities are not offering retail the best price, and are netting more as a result?
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This is why we have the term, "capacity constraints." Melvin accomplished those returns in a year where they would have started off with $10B or close to it. The retail investors you know did it on what, $100k? $1M? The liquidity available to retail investors is completely different from the liquidity available to firms with an 11 digit book. Assuming those retail investors actually have a working strategy, they can…
Sure, but I'm not talking about complex strategies here. If you can't beat a retail investor with a straightforward portfolio of middle of the road stocks like "AMZN, AAPL, BRK, DIS", what is the point of a hedge at all? Particularly when their tactics put them in such a high risk category. All of what I'm talking about would have scaled perfectly fine with a $10b portfolio, these are giant corporations with a combin…
I also wouldn't classify this as high risk. This risk is arguably novel. Short squeezes have happened before, sure, but not with the same sort of trigger. This is probably a new risk signal for the 30 or so funds which were blown out that haven't been as well publicized.
It should be noted that Melvin Capital returned over 50% in 2020[1], 44% in 2019[2], and has averaged above 30% annual returns since inception[3]. In other words, even though this is definitely painful, even inclusive of this event, it's one of the best performing hedge funds of the past decade. [1] https://www.wsj.com/articles/citadel-point72-to-invest-2-75-... [2] https://www.bloomberg.com/news/articles/2019-07-19/…
if I gained 50%, 44%, followed by a 53% loss with a 2% fee, I'd be under water for the last 3 years, but the sp500 would have yielded me a 37% gain - virtually no fees. I'd rather the sp500 over these guys
Starting from 100, if you swing 50% up 50% down you get: 150, 75, 112.5, 56.25, 84.375, 42.18, 63.28, 31.64....
You need a 100% gain to make up for a 50% loss.
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20B in volume in a single trading day and people still think this is just retail. Sheesh.
2-3 weeks ago when share prices were around $17, GME had a market cap of less than 1.2B. WSB has 7.6 million users now, but I assume it went up a lot recently. Say 2 million of them bought some GME. To buy 50% of the shares a couple weeks ago it would have only taken $296 each. So they could ABSOLUTELY get prices moving significantly. Now of course lots more people have jumped on now. But that 20B volume number is af…
It should be noted that Melvin Capital returned over 50% in 2020[1], 44% in 2019[2], and has averaged above 30% annual returns since inception[3]. In other words, even though this is definitely painful, even inclusive of this event, it's one of the best performing hedge funds of the past decade. [1] https://www.wsj.com/articles/citadel-point72-to-invest-2-75-... [2] https://www.bloomberg.com/news/articles/2019-07-19/…
if I gained 50%, 44%, followed by a 53% loss with a 2% fee, I'd be under water for the last 3 years, but the sp500 would have yielded me a 37% gain - virtually no fees. I'd rather the sp500 over these guys
And of course, the risk profile may be different. Equal returns can be more or less appealing depending on the risk profile.
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> So, my layman’s understanding is that if there are 10 million shares, and you borrow 1 million of them (a 10% short position) from their owners, then sell them to new owners, both the old owners and new owners count as owning stock, and so 11 million shares “are owned” The old owners don't strictly own stock, they own a future claim due on a certain date against you for the borrowed quantity of stock plus a claim a…
Ah OK. So in the context of my 10million-14million-24million example, which of those numbers would be called “shares outstanding”? I keep hearing that word a lot, but don’t want to use it until I’m sure of what it means.