Earlier quoted context omitted.
A has 1 share of GME. B borrowed it from A and sell to C. C has 1 share of GME. See, magically, A and C has 1 share of GME each.
That's a lot like how banks create money.
When the loans are repaid, it unwinds.
Ask HN: What the heck is happening with GameStop?
51–55 of 55 posts
Re: Ask HN: What the heck is happening with GameStop?
#52Re: Ask HN: What the heck is happening with GameStop?
#53Earlier quoted context omitted.
The part I don't understand is this: “Someone noted that these hedgefunds shorted 140% of all shares available.” How can you borrow a share that doesn't exist?
Borrow a share. Sell it. Borrow the same share. Sell it again.
Isn’t that manipulating the market by selling shares so the share price drops even more?
Re: Ask HN: What the heck is happening with GameStop?
#54Earlier quoted context omitted.
Normally, when you short a share, your broker has to go find somebody who already owns it and they "borrow" it from there and allow you to "sell" it short. But if you can believe this, the very, very largest Wall Street firms, (Citadel, Sigma2, etc.) those with trillion dollar balance sheets got a special exemption from the SEC : rather than having to "find" shares to borrow, they can "manufacture" shares, using thei…
Do you have a source for that special exemption? Or even just keywords I can search for?
Re: Ask HN: What the heck is happening with GameStop?
#55Earlier quoted context omitted.
Normally, when you short a share, your broker has to go find somebody who already owns it and they "borrow" it from there and allow you to "sell" it short. But if you can believe this, the very, very largest Wall Street firms, (Citadel, Sigma2, etc.) those with trillion dollar balance sheets got a special exemption from the SEC : rather than having to "find" shares to borrow, they can "manufacture" shares, using thei…
Do you have a source for that special exemption? Or even just keywords I can search for?