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GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

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Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#41

Post by jacquesm »

Cookingboy wrote: post #16

On Reddit, especially /r/wsb, many people painted it to be a common folks vs. Wall Street hedge funds story. But I've always thought the reality was that it's a hedge funds vs. hedge funds story where plenty of big players made millions, if not billions last week, then shorted the stock at $3-400 and made millions more on the way down. The retail players were probably just caught between a group of 800lbs fighting go…

The stockmarket itself is already gamification of fractional ownership of companies. Lots of people that are active on it don't realize that it is just like a casino where the house will always win and they are just there to supply warm bodies and funds. The amount of bullshit that I've heard newly minted 'day traders' spout is second to none. Lambs to the slaughter, and bragging about it all the way to the butchers knife.

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#42

Post by jacquesm »

ckastner wrote: post #35

I've occasionally browsed WSB over the last few days, and it became just too depressing to read. There are vast numbers of financially illiterate people pouring what little money they have into this pipe dream that a short squeeze can still be effected. And these people are fueled by incessant bullshit that approaches, and in some cases even exceeds, the level of QAnon. The facts of the matter are that (1) the cat wa…

Exactly. They are just there to supply some liquidity and as a final resting place for bad bets.

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#43

Post by insert_coin »

WA wrote: post #31
PartiallyTyped wrote: post #20

Retail can not move markets like that and if you genuinely disagree, take it from somebody like Dr. Michael Burry, in a recent tweet [1]: > The correlation coefficient between $GME and $SAVA today was 0.884648, nearly unity. Video game retailer on one side, biotech on the other. There should be no correlation but for.... Both traded multiple $billions. #BigMoney building you staircases and knocking castles down. This…

I think you're right. Maybe WSB pushed the price initially up to like $38 or whatever on low volume. Then the big players entered, because the narrative was right, price got pushed way up, retail bought more in a maniac frenzy around $300 and big players exited. The idea that Robinhood users can move markets is kinda silly. It's been told again and again for 6-9 months now. But a back of the napkin calculation shows…

Robinhood users move markets because they generate “free” publicity literally worth billions, not because of the volume of their transactions.

The excitement generated towards a stock, the momentum they build, is almost invaluable even if just for a few days, no matter your business or the price of your stock. Money can’t buy that.

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#44

Post by jacquesm »

manderley wrote: post #29
Dma54rhs wrote: post #7

Earlier quoted context omitted.

Wasn't it supposed to be that magical last Friday already? At least that was the common topic at the beginning, what changed?

It's desperate people trying to tell themselves that they're going to be rich soon against all evidence. It's why the date for the supposed squeeze keeps moving.

The Jehova's witness theory of investment.

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#45

Post by a254613e »

RamRodification wrote: post #19
Beltiras wrote: post #8

If they removed the trading restrictions on the stock it would shoot back up again.

I thought they did. They haven't?

They did, few hours ago - markets aren't open yet though. So today will be the first day on RH without restrictions since the price drop.

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#46

Post by lasagnaphil »

teekert wrote: post #27

I really hate how big hedge funds can consistently pull money out of the market using tools normal people don't have access to. When it bites them because they get caught with their hands in the cooky jar, they call the market "irrational" or that the "market is disturbed". But their profits are disturbed by people that play "their" game by the rules. Nobody likes to see a a billionaire get even more rich just by shu…

Yeah, regardless of the results of the event, public trust for financial institutions are plunging down at a rapid rate. Your comment on the morality of the stock markets reminds me Slavoj Zizek's article "Corruption for everybody!": https://spectator.us/topic/corruption-for-everybody-slavoj-z...

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#47

Post by ignoramous »

Cookingboy wrote: post #40
dkarp wrote: post #36

Earlier quoted context omitted.

I used to work on an investment platform and we used to say that the ideal user logged in once, invested a whole bunch and then wasn’t seen again until they had more to invest. Daily active users and even monthly active users just shouldn’t be what an investment platform aims for. It’s not healthy to constantly check your investments

Robinhood doesn’t care at all for their users, after all they and their orders are the product it sells.

A sharp contrast with the Indian "Robinhood", Zerodha, which pushes its users to not gamble and instead make measured long-term investments [0]. May be because Zerodha is not VC backed is why they've users-first mentality versus metrics-first?

[0] https://zerodha.com/z-connect/traders-zone/trading-psycholog...

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#48

Post by DSingularity »

WA wrote: post #31
PartiallyTyped wrote: post #20

Retail can not move markets like that and if you genuinely disagree, take it from somebody like Dr. Michael Burry, in a recent tweet [1]: > The correlation coefficient between $GME and $SAVA today was 0.884648, nearly unity. Video game retailer on one side, biotech on the other. There should be no correlation but for.... Both traded multiple $billions. #BigMoney building you staircases and knocking castles down. This…

I think you're right. Maybe WSB pushed the price initially up to like $38 or whatever on low volume. Then the big players entered, because the narrative was right, price got pushed way up, retail bought more in a maniac frenzy around $300 and big players exited. The idea that Robinhood users can move markets is kinda silly. It's been told again and again for 6-9 months now. But a back of the napkin calculation shows…

I think you over estimate the liquidity at spot prices. If you tried to buy 120$ billion dollars of stocks in one day you will cause price changes. Now imagine if that was concentrated in the Robinhood top 100?

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#49

Post by tedunangst »

TheAdamAndChe wrote: post #23
Cookingboy wrote: post #16

On Reddit, especially /r/wsb, many people painted it to be a common folks vs. Wall Street hedge funds story. But I've always thought the reality was that it's a hedge funds vs. hedge funds story where plenty of big players made millions, if not billions last week, then shorted the stock at $3-400 and made millions more on the way down. The retail players were probably just caught between a group of 800lbs fighting go…

On robinhood, their only sin through this whole situation was poor communication. Several firms had to restrict trading of GME and several other stocks because of clearinghouse restrictions. Robinhood was the first to try to explain publicly why they had to do that, and they explained it absolutely horribly. With regards to treating investing like gambling, there's no real problem with that. There's definitely a mark…

I think it's fair to also expect a broker that courts high volume customers (which robinhood clearly did) should be capitalized to handle the volume.

Re: GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny

#50

Post by DSingularity »

WA wrote: post #33
DSingularity wrote: post #24

Earlier quoted context omitted.

Where do they get their shares from? They borrow it from people who don’t own it. Those people may want to sell — especially in the event that the share price grows. And when that happens in sufficient volume time to put up because the exchange is not going to fail to deliver.

A lot of assumptions you're making here. Maybe many didn't do naked short selling. Maybe the lender didn't want to sell for whatever reason. You just assume that MOST shorts were forced to cover and I don't see why this should be the case.

If they are borrowing a share then how is it naked short selling?

To understand the scenario where a short is forced to cover imagine you are the exchange. You don’t own shares. You just match orders and move money around and so on. One of the things you do, for margin players, is lend short-sellers shares that others bought on margin from the exchange. You bought it on margin to sell it and the other guy bought it margin to hold it. If the price spikes and the other guy wants to sell it what will you do?

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