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Roaring Kitty to testify on GameStop alongside hedge fund managers

reuters.com

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Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#181

Post by [deleted] »

jimminy wrote: post #77
3001 wrote: post #71

Earlier quoted context omitted.

Charles Schwab did not implement restrictions.They had a banner until last week saying that when you log in.Stop spreading misinformation

> “The bottom line is that clients are still able to trade in GME, but we’ve put some restrictions on certain types of transactions in the interest of helping mitigate risk for our clients,” Schwab said Wednesday in a statement.[0] They very much did 3 weeks ago. Not to the same degree as the smaller brokerages, but they still put limitations on margin trading, and restrictions on options. [0] https://www.thinkadviso…

[deleted]

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#182

Post by 3001 »

nemothekid wrote: post #115
jimminy wrote: post #77

Earlier quoted context omitted.

> “The bottom line is that clients are still able to trade in GME, but we’ve put some restrictions on certain types of transactions in the interest of helping mitigate risk for our clients,” Schwab said Wednesday in a statement.[0] They very much did 3 weeks ago. Not to the same degree as the smaller brokerages, but they still put limitations on margin trading, and restrictions on options. [0] https://www.thinkadviso…

Schwab’s restrictions came down to: 1. Increased margin requirements for GME 2. Restrictions on naked strategies Both of these are pretty much acceptable on a very volatile stock. They never prevented you from buying the stock or options. I think including Schwab or TD in this is near misinformation because 99% of users wouldn’t make use of the features that Schwab ended up restricting

Right, can’t short sale and 100% margin requirements. How is that newsworthy or anything to Wimp about.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#183

Post by ivalm »

sumedh wrote: post #83
ivalm wrote: post #63

Earlier quoted context omitted.

Can you point to a GME like price action of a non-penny stock ticker? Of course we both know the answer is no. Things shot up, things shot down, of course people who bought the hype lost money. There is nothing surprising here.

> There is nothing surprising here. Then why disable buying and not selling, if things were volatile the exchange could have stepped in and stop the trading. There was really no reason for DTCC to increase the margin to 100%.

They disabled buying because they need to put up collateral on buys, not on sells (on sells you just pledge the shares you hold). They increased collateral because if a bunch of people buy and go bust by the time settlement time hits (because of GME price collapse) then dtcc would be on a huge hook.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#184

Post by IgorPartola »

sillysaurusx wrote: post #143
IgorPartola wrote: post #139

Earlier quoted context omitted.

That’s a really interesting take. The way they seek the lowest common denominator of communication does seem to create a strong sense of community. What I mean by dangerous is this: as more people flock there more capital will enter the market through that gate. And that’s a lot of money to be directed by whims of a fickle and undereducated community that tends to ride whatever is popular at the time. This time they…

Their counterargument would be "How can we have insider knowledge when we have no knowledge?" I get what you're saying, and it's a valid perspective. But, this gets back to the root of the issue: the older I get, the more it seems like there is a class division in society, and the upper class will do whatever it takes to ensure the lower class stay low. I hate phrasing it like that, because you can't even say it with…

I think I wasn't clear in what I was saying. I made it sound like them being dangerous was a bad thing. I am placing no value judgement on WSB, just acknowledging that they are on the way to becoming a serious player in this game, with the ability to cause serious damage to other players (hedge funds, public companies, etc.). This is a quality that I already attribute to the hedge funds, the SEC, the big corps, etc. as inherent. Whether WSB becoming a serious player is a good thing or not is really not clear to me. I would expect that it results in a lot of collateral damage, first and foremost to some percentage of retail investors. At the same time, the fact that you can short stocks in the manner that GME got shorted is a much clearer and much more immediate problem, IMO. And I share your view that the haves seem to want to keep the havenots out of their clubhouse and will do all manner of things to keep the separation.

But overall, no I don't think that we should do anything about WSB. The GME situation is at best a symptom of a broken system, it's just that this time hedge funds got (theoretically) hurt not by other hedge funds but by retail investors so everyone noticed. If anything, let's fix the rules of the game so it's closer to fair for the little guy, and fix the SEC to keep those rules properly enforced.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#185

Post by emteycz »

ivalm wrote: post #177
emteycz wrote: post #73

Earlier quoted context omitted.

Evidently you don't know what you're talking about - of course I can. $VW 2008, $ACB 2019, $TLRY 2018 to name a few. There is much more, simply go through tickers on D1 chart and you'll see.

Evidently you don’t understand difference in the size of this run up? VW, the mother of short squeezes driven on unexpected Porsche purchase went from $200 to $1000, eg 5x $ACB had no short squeeze, they had some run ups, with biggest in 2018 of $66 to $194 $TLRY peaked at $300 with historic low of $21 and it took months. $GME went from $4.2 to $482 in about 5 months, none of the previous tickets you mentioned moved…

Yes, the relative action was lower on other stock - we know this was a unusually large event - but it's absolutely false that "nothing like this" has ever happened. If you compare the post-squeeze prices, there's only few dozen of percentage points of difference in that same timeframe. The specific price before the squeeze doesn't really matter.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#186

Post by IgorPartola »

quickthrowman wrote: post #171
IgorPartola wrote: post #139

Earlier quoted context omitted.

That’s a really interesting take. The way they seek the lowest common denominator of communication does seem to create a strong sense of community. What I mean by dangerous is this: as more people flock there more capital will enter the market through that gate. And that’s a lot of money to be directed by whims of a fickle and undereducated community that tends to ride whatever is popular at the time. This time they…

> What happens when they do this to a different company like say Amazon? Anything good/bad? What do you mean? AMZN has 3 million of 500 million shares sold short, less than 1% short interest. It would take one day for shorts to cover at average volume. Shares are also $3,277 as of Friday’s close, a lot of WSB people can barely afford one or two shares. They cannot do this to a company like Amazon because the short in…

They can’t do this particular thing to Amazon. But that doesn’t mean they can’t do something else. What if Amazon’s supply chain is found to be dependence to heavily on some other publicly traded company that can be manipulated more easily? What if they find some pattern in how hedge funds trade Amazon that is exploitable? It’s like saying that we found and fixed a bug so the attacker who exploited that particular bug can never find another one.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#187

Post by IgorPartola »

bsanr2 wrote: post #165
IgorPartola wrote: post #139

Earlier quoted context omitted.

That’s a really interesting take. The way they seek the lowest common denominator of communication does seem to create a strong sense of community. What I mean by dangerous is this: as more people flock there more capital will enter the market through that gate. And that’s a lot of money to be directed by whims of a fickle and undereducated community that tends to ride whatever is popular at the time. This time they…

A market so susceptible to mania is maybe in the need of brakes that are used judiciously and without bias. We clearly do not have that, and in fact have been stripping them away since the 80s. You can't blame this on "unsophisticated" investors breaking norms but ultimately playing by the rules.

I’m not blaming anyone. I think it’s an interesting situation in the same way that oxygen rich atmosphere becoming a thing on earth led to interesting results. The market system is clearly broken. You need not look further than GME for evidence of that. Either GameStop has been undervalued by everyone for years at $5/share and is really worth $50/share (where it is today), which would mean the market is broken. Or GameStop is currently worth 10x what is its true value which means the market is broken. Its sole purpose is to help us efficiently determine how much each company is worth and allow us to trade them. And here we have a situation where nobody can argue (I don’t think) that the market is doing a good job at efficiently determining how much GME is worth, and trading it has a decidedly one-sided advantage towards hedge funds vs retail investors.

My only observation is that while I don’t know what long term effect WSB will have on the market, I think in the short term a lot of retail investors will lose their shirts as collateral damage.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#188

Post by joshspankit »

sillysaurusx wrote: post #10

It's interesting watching /r/wallstreetbets oscillate between "We did nothing wrong!" to "Well okay, some people were doing some things that were wrong, but hopefully no one will notice." https://www.reddit.com/r/wallstreetbets/comments/lj8djx/day_... (I don't personally believe that anyone did anything that should be prosecuted here, but what I believe is irrelevant to courts.) There is one thing that (in my un-humb…

> It's interesting watching /r/wallstreetbets oscillate between "We did nothing wrong!" to "Well okay, some people were doing some things that were wrong, but hopefully no one will notice."

I feel like it’s mischaracterization to say that “/r/wallstreetbets” is either a single entity, or that the current group is at all connected to the “pre-GME” group. They had 1.7M users in Dec 2020, and are now over 9M. As well, there are undoubtedly bots, shills, and actors with their own agendas that were drawn as a direct result of the publicity.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#189

Post by ivalm »

emteycz wrote: post #185
ivalm wrote: post #177

Earlier quoted context omitted.

Evidently you don’t understand difference in the size of this run up? VW, the mother of short squeezes driven on unexpected Porsche purchase went from $200 to $1000, eg 5x $ACB had no short squeeze, they had some run ups, with biggest in 2018 of $66 to $194 $TLRY peaked at $300 with historic low of $21 and it took months. $GME went from $4.2 to $482 in about 5 months, none of the previous tickets you mentioned moved…

Yes, the relative action was lower on other stock - we know this was a unusually large event - but it's absolutely false that "nothing like this" has ever happened. If you compare the post-squeeze prices, there's only few dozen of percentage points of difference in that same timeframe. The specific price before the squeeze doesn't really matter.

GME squeeze is significantly larger in percentage points, that’s exactly my point. Nothing of this size went 100x previously. The short volume was large back when GME was $4. GME moved in 2 days as much as entire VW squeeze. It is entirely reasonable that a bubble of this sizes crashes just as spectacularly and dtcc didn’t want to hold the bag after all the bankrupt retail late comers. In fact that in reality it has been defaulting as slowly and non-destructively is kind of a miracle, in many ways thanks to dtcc quick action.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#190

Post by ivalm »

chrisco255 wrote: post #99
ivalm wrote: post #63

Earlier quoted context omitted.

Can you point to a GME like price action of a non-penny stock ticker? Of course we both know the answer is no. Things shot up, things shot down, of course people who bought the hype lost money. There is nothing surprising here.

https://moxreports.com/vw-infinity-squeeze/ Volkswagen 2008

5x squeeze for VW vs >100x for GME. Not even the right order of magnitude.
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