81–90 of 403 posts
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When I purchase a stock, I do it in the express belief that I will get a physical (though digitally stored) share of that company, and possibly one that gives me a voting right if the stock is marked as such. When a stock “fails to clear” this gives me a ton of problems such as slippage and volatility, and possibly a quite substantial loss. Same if you buy an apple, I'm sure you'd only do it in the belief that you wi…
If I want insurance to protect against the price going down, I'd buy a put option. I know a bit about this but I'm not an expert on this. Naively, those put options are effectively offered by those providing a short (they think the price is going to go down, or have a way to hedge the price decrease). Those don't get represented as shorts either. https://corporatefinanceinstitute.com/resources/knowledge/tr... The oth…
A short sale is something very particular: it's selling something you're borrowing. The counterparty has actually bought a stock. Not an option, he can hold that stock for sixty years. This is fucking weird.
I find articles like this fascinating because to me they are indicative of just how substantial the magnitude is of the "bounty of capitalism" in the public markets. On the one hand you have returns available to anyone prepared to invest consistently in the stock market across the last 30 years that are both well documented and very substantial. People like Warren Buffet & boggleheads make data-backed arguments about…
This is why lots of retail on forums like wsb treat the market as gambling. There is almost no edge you can get when compared to big players. And even if you make correct assumptions you can get losses out of them either by them being already priced in or via short manipulation.
One example I remember last January's fake tesla brake issues the week a huge volume or calls expired.
The author seems to be really upset about this, but I don't understand why. Nothing they are describing, if you ignore histrionic language like "counterfeiting", seems especially nefarious. Maybe I am misunderstanding. Basically, a short is when A borrows from B a share of corporation C with the promise to return a share of corporation C at a later time, plus some cash interest. A naked short is where instead B gives…
While the mechanics are more-or-less equivalent, the settlement assets in the two scenarios are not which can make a big difference depending on the circumstances of the trade. Neither is generally a problem in a high volume, liquid system though.
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This doesn't distinguish between shorting and naked shorting. But in either case I don't understand why I'm supposed to be upset. Is it because the stock price goes down?
Does it matter? 1 stock = 1 stock. 1 stock should never be 2 stocks. It’s because I believe in ownership of what you make. If you founded a company, sold 10% on public markets for float, and magically 20% of your cap table now exists on the NYSE; something is horrifically wrong. And yes, you would have suffered negative financial outcomes because of the counterfeiting.
The author seems to be really upset about this, but I don't understand why. Nothing they are describing, if you ignore histrionic language like "counterfeiting", seems especially nefarious. Maybe I am misunderstanding. Basically, a short is when A borrows from B a share of corporation C with the promise to return a share of corporation C at a later time, plus some cash interest. A naked short is where instead B gives…
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You are a company looking to raise money through the public markets. You have issued 10 million shares; but the market is trading with 15 million because of counterfeit stocks. The bankers and the hedge funds have got to dilute you; actively hurting your fundraising ability, and of course; your stock price (which you may own as a founder).
This doesn't distinguish between shorting and naked shorting. But in either case I don't understand why I'm supposed to be upset. Is it because the stock price goes down?
My understanding is that naked shorting can be used to artificially lower the stock price by increasing the supply with the ultimate goal of driving the company into bankruptcy.
So on one side you have illegal(?) market manipulation benefiting sophisticated traders and on the other you have companies that are presumably creating jobs and generating something of value being destroyed as a result of financial engineering.
You can decide if that's upsetting or not.
I wish there was an audio version of this. I find it much easier to consume information via headphones while I do the dishes then to sit down and read it through. It is also a good opportunities to give the eyes some reast from monitor work. Any tips if one wants to learn this via listening?
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> Why let people have incentives to ruin other people lives? We should build safety cushions for people, not companies. > Why do you feel you need to help it to go down? https://en.wikipedia.org/wiki/Wirecard_scandal
Fraudulent company is not a general case. Such companies must be closed by regulators, not short sellers. Do you think it is a good idea to help Intel go bankrupt because it's shitty right now in comparison to AMD?