Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

u/DeepFuckingValue and the GameStop Reddit mania

wsj.com

Post reply on HN
Print view View original

241–250 of 554 posts

Re: u/DeepFuckingValue and the GameStop Reddit mania

#241

Post by toomuchtodo »

lifeformed wrote: post #207
015a wrote: post #158

Earlier quoted context omitted.

Right. My biggest concern with these plays, at this point, is that they're not taking into account the possibility of bankruptcy. There's a ton of "they have to buy it, if we hold all the shares then it'll go to the moon, 1k, 2k, 4k". (1) The sheer variety of financial vehicles available to professional investors is staggering, and while the initial DD was really good, we probably missed something at this point, and…

I thought bankruptcy would still mean the brokers are on the line for the money?

They are. That’s what collateral, broker risk management, and (if the broker fails) DTCC is for, to derisk counterparty failure risk.

Someone is paying up.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#242

Post by heimatau »

misiti3780 wrote: post #31

I'm honestly confused by the press around this event. I get it, /DFV started a short squeeze and got rich, that is great for him. I don't support naked shorting, it should probably be illegal (if it is not already) and it looks that was part of the reason this happened. Everyone has been suspecting for a while (especially here) that a lot of volatility in stocks like TSLA etc was due to Robinhood. As of 5:33 EST, I'm…

> it's crushing a few hedge funds that happened to hold short positions in a few stocks

You haven't noticed that the big three indexes are DOWN ~2% today? They were down 2% when this first took off. [If you want to split hairs...go for it but...the correlation is very strong, news cycles are soaking it up and the White House talks about monitoring the situation. This is not a light matter]

This is bigger than just a few firms. The added limitations to buying various stocks. The heavy-handed nature is making it clear, let alone the media frenzy.

WSB broke their models which in turn is crippling the 'economy'. If you don't think so, please, advocate for the free citizens to buy as much as they want because the hype isn't subsiding, it's only growing.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#243

Post by Ecstatify »

foob wrote: post #203

Does anyone know if it's illegal to lie about your holdings as an individual retail investor? I've seen a handful of screenshots on /r/wallstreetbets showing large holdings, but it would be trivial to modify the page source before taking a screenshot.

It’s the internet...

Re: u/DeepFuckingValue and the GameStop Reddit mania

#244

Post by [deleted] »

girvo wrote: post #169
SpicyLemonZest wrote: post #90

Earlier quoted context omitted.

The theory I've seen is that there could be hidden systemic risks here. If GME tanks suddenly, there's some possibility that traders bailing out of their trades will take down Robinhood (who doesn't seem to be very healthy right now), and a major broker collapsing is never gonna be great for the market. I share your skepticism that it would actually happen this way, but it seems at least somewhat plausible.

Robinhood are tiny on the brokerage stage. Important to retail, barely matter otherwise. That’s my understanding at least

[deleted]

Re: u/DeepFuckingValue and the GameStop Reddit mania

#245

Post by lwigo »

SpicyLemonZest wrote: post #90
yreg wrote: post #78

Earlier quoted context omitted.

Why would that crash the entire stock market?

The theory I've seen is that there could be hidden systemic risks here. If GME tanks suddenly, there's some possibility that traders bailing out of their trades will take down Robinhood (who doesn't seem to be very healthy right now), and a major broker collapsing is never gonna be great for the market. I share your skepticism that it would actually happen this way, but it seems at least somewhat plausible.

It's got nothing to do with Robinhood. If a hedge decides to cover the short so they don't have to admit defeat and go bankrupt, then the entire market goes down because they'll end up selling thousands of unrelated shares for their cover.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#246

Post by rglullis »

asenna wrote: post #236
eMGm4D0zgUAVXc7 wrote: post #135

Earlier quoted context omitted.

The IPFS website at the bottom left contains a section "Protocol labs", the "About" link of that links to https://protocol.ai/ which says "We're decentralizing storage with Filecoin". So their end goal might be making money off that cryptocurrency... Thanks to the GP for causin me to figure out why the wheel is being re-invented here! :) :|

Why is adding an incentive mechanism to "pinning" files on IPFS inherently wrong? If you find the right incentives to a tech problem, that pushes the tech forward right? Like Satoshi Nakomoto putting together the right type of incentive to be able to create an almost unhackable network in Bitcoin (along with Ethereum and others). I'm not yet saying that Protocol Labs will ultimately find the success they're looking f…

It's not dismissive. They already got their money. $257 million, to be exact. No one knows how Filecoin is going to make money except for Protocol Labs.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#247

Post by nursur2011 »

jaycroft wrote: post #227
jondwillis wrote: post #142

Earlier quoted context omitted.

However, if Melvin had picked up deep OTM calls before the (literal in both senses) volume started ramping up about two weeks ago, they might have done a little better. To be clear, I don’t actually think they did.

And even if they did, who's on the other side of those options now that they're in the money?

Could be anyone. What matters is whether they're covered calls or not. I don't know if that info is available. If it's a covered call the seller of the option has the shares, so they essentially sell them to whoever bought the option and decided to exercise the option. If they're not covered, then they have to go out and buy them.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#249

Post by fractionalhare »

jpmattia wrote: post #97
raziel2701 wrote: post #22

On wsb u/deepfuckingvalue showed he still holds 50,000 shares and 500 deep ITM call options. He has secured a profit of $13.8 million dollars, and his remaining open position is valued at $45 million. I would caution people to not quickly fall into the "if he's still in, I'm still in" meme. He has secured a $14 million bag, regardless if the stock goes to zero he's already secured a life changing amount of money, he…

> The overall market is stressed, things are getting weird and I would not be surprised if this is the beginning of another stock market crash. GME short interest was still greater 100% of shares outstanding as of 1pm 1/29 (S3 Shortsight numbers). If forced to cover, short holders will have to liquidate other assets. Could those liquidations force more liquidations in a positive feedback loop? Hopefully no, but certa…

Yes, exactly. When a hedge fund is getting its face ripped off because its shorts are up 50 - 200%, it will liquidate its longs to cover. The rotational dynamics of many funds doing that at once can drive the price down on traditionally stable stocks that everyone owns. In a worst case scenario that could trigger a massive selloff which would crash the market.

This is compounded by the fact that funds will defensively sell off (or sell short) stable stocks owned by other funds that look like they're about to blow up. If a fund seems like it's circling the drain and it owns 5% of a ticker, other firms are not going to wait for it to implode and move the price down before they liquidate their own positions in that stock.

This market is terrifying.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#250

Post by paulpauper »

throwaway-571 wrote: post #220
paulpauper wrote: post #121

Earlier quoted context omitted.

it will keep going up. Good for him. This calls into doubt the stronger forms of EMH given how many people have made so much money with what is effectively a momentum play. I would not be surprised if he becomes a billionaire soon with other investments and GME.

He'd have to find some other very cheap stock with very cheap far out of the money calls with a high potential for rising 11000% in a year. I'm taking suggestions. I don't know if there is anything cheap available on the options market these days. I don't think GME is going to stay at this price for very long, but on the other hand the retails trader are only ~25% of the volume (Matt Levine's latest column) and on ba…

Even if the options are super-expensive in terms of IV, if something goes up 200% in a week, you will make a very nice return.
Post reply on HN