GameStop: Anger as trading in GameStop shares is restricted • Hacker News Board

Re: GameStop: Anger as trading in GameStop shares is restricted

#51

Post by slg » Thu, Jan 28, 2021, 5:01 PM UTC

parhamn wrote: post #34

marcus_holmes wrote: post #14

> "This isn't investing, this is gambling" Yep. Agreed. Spot-on. That's what Wall St does. If you don't like it, try and stop it. But for everyone, including the hedge funds. Treating the derivatives markets like a casino (and taxing appropriately) sounds like a great idea.

I get this knee jerk reaction but there is something to be said about the risk analysis, sophistication, etc of said hedge funds. They’re not gambling in the same sense, but sure in some sense they are. Even having an entry level “risk model” is more sophistication than most home traders. You can’t just dismiss all that as nothing.

Or to put it another way, there is a difference between being a skilled poker player and sitting down at table in hopes of winning fairly versus doing what the MIT Blackjack Team did.

That isn't to say that traditional Wall Street people haven't done anything wrong in the past or are in the right in any way here. It is simply pointing out there is a big spectrum in "its all gambling" and this activity seems like it is closer to the MIT Blackjack side.

Re: GameStop: Anger as trading in GameStop shares is restricted

#52

Post by EpicEng » Thu, Jan 28, 2021, 5:01 PM UTC

pen2l wrote: post #43

WrtCdEvrydy wrote: post #13

Earlier quoted context omitted.

depends on when the positions are liquidated. everyone who bought yesterday is fighting exchanges whose only option for GME is "sell" because buying is restricted. I don't know how some of these shorts will find 20 million shares by tomorrow.

Sorry for ignorant question here not acquainted to stock market mechanisms, but: why the time imposition of tomorrow? Who dictates that storters have to return shares and when? Frankly I thought with puts you state time limits, and with shorts you decide for yourself when you’ll have to give shares back. If that is not so, then I guess I finally understand why everyone says shorts are super risky.

They don't have to cover shorts tomorrow, but there are ITM calls that will be expiring. The idea behind the shorts is to keep the price high until these funds have no choice but to cover.

Re: GameStop: Anger as trading in GameStop shares is restricted

#53

Post by happytoexplain » Thu, Jan 28, 2021, 5:03 PM UTC

lldbg wrote: post #45

ButterWashed wrote: post #11

Not being in the US I don't know this but can Robinhood be sued, like a lot of people seem to be calling for, just for refusing to handle trades on a stock?

Robinhood is a private company, and are allowed to decide what types of people they want to let trade on their platform.

That would only make sense if they refused you at the door, or after you had sold all investments. Obviously the fact that these people hold shares complicates it.

Re: GameStop: Anger as trading in GameStop shares is restricted

#54

Post by SpicyLemonZest » Thu, Jan 28, 2021, 5:06 PM UTC

Out_of_Characte wrote: post #24

gruez wrote: post #4

While the title might be true for the "amateur investors" that got in early, I strongly believe that most of them are not outwitting anyone and will be bagholders. As of this post basically everyone who bought yesterday are underwater by 50%.

Does it matter that your're underwater by 50%? The goal was to beat Wallstreet, They did. The hedgefunds should definitely take note not to play a dangerous game because losing is always on the table.

The problem is that people were starting to get in for pure speculation. Two friends of mine who don't care at all about Wall Street told me yesterday that they bought in, because they read an explanation of why they're sure to see big gains on Friday. If the goal was just to beat Wall Street, hurt some hedge funds and get egg on a lot of people's faces... like you said, they've already succeeded, so putting a stop to it before speculative investors get hurt seems appropriate.

Re: GameStop: Anger as trading in GameStop shares is restricted

#55

Post by gruez » Thu, Jan 28, 2021, 5:06 PM UTC

jacksnipe wrote: post #38

gruez wrote: post #22

Earlier quoted context omitted.

>I don't know how some of these shorts will find 20 million shares by tomorrow. you're confusing shorts with options. shorts don't expire. They can be held indefinitely as long as you have the margin to keep up with the losses.

Shorts have delivery dates.

They do?

>There are no set rules regarding how long a short sale can last before being closed out.

>The lender of the shorted shares can request that the shares be returned by the investor at any time, with minimal notice, but this rarely happens in practice so long as the short seller keeps paying its margin interest.

https://www.investopedia.com/ask/answers/05/shortsaleclosed....

Re: GameStop: Anger as trading in GameStop shares is restricted

#56

Post by betterunix2 » Thu, Jan 28, 2021, 5:08 PM UTC

Out_of_Characte wrote: post #24

gruez wrote: post #4

While the title might be true for the "amateur investors" that got in early, I strongly believe that most of them are not outwitting anyone and will be bagholders. As of this post basically everyone who bought yesterday are underwater by 50%.

Does it matter that your're underwater by 50%? The goal was to beat Wallstreet, They did. The hedgefunds should definitely take note not to play a dangerous game because losing is always on the table.

They didn't beat wall street, they just dinged a handful of speculators. Who do you think is on the other side of that 50% loss? I am going to assume that a whole bunch of speculators swooped in yesterday to take advantage of the situation and they just walked away with some easy money, courtesy of the WSB crowd.

Re: GameStop: Anger as trading in GameStop shares is restricted

#57

Post by gruez » Thu, Jan 28, 2021, 5:09 PM UTC

Out_of_Characte wrote: post #24

gruez wrote: post #4

While the title might be true for the "amateur investors" that got in early, I strongly believe that most of them are not outwitting anyone and will be bagholders. As of this post basically everyone who bought yesterday are underwater by 50%.

Does it matter that your're underwater by 50%? The goal was to beat Wallstreet, They did. The hedgefunds should definitely take note not to play a dangerous game because losing is always on the table.

> Does it matter that your're underwater by 50%? The goal was to beat Wallstreet, They did.

1. If you end up losing money in the end, I'd hardly call that "beating".

2. "wall st" isn't a single entity. The hedge funds shorting GME might have lost money, but there's plenty of companies that made money on the side, eg. the asset management firm that unloaded their GME shares.

Re: GameStop: Anger as trading in GameStop shares is restricted

#58

Post by fairity » Thu, Jan 28, 2021, 5:10 PM UTC

system2 wrote: post #40

jpxw wrote: post #20

Nobody is “outwitting” Wall Street here. That will become particularly apparent in the coming days. I’ve read posts on /r/WSB where people talk about having put all of their savings into this. I only hope that they’re just teenagers with little savings.

We will be reading "I lost all my savings" posts in a few days on reddit. It is for sure GME will hit 30, and those bought it at high will be sharing their real life pain instead of memes.

> It is for sure GME will hit 30

May I suggest you look into purchasing long-dated GME puts then? The price for the $320 GME PUT expiring in 1 year is $240.

Re: GameStop: Anger as trading in GameStop shares is restricted

#59

Post by nsator » Thu, Jan 28, 2021, 5:11 PM UTC

EpicEng wrote: post #48

parhamn wrote: post #34

Earlier quoted context omitted.

I get this knee jerk reaction but there is something to be said about the risk analysis, sophistication, etc of said hedge funds. They’re not gambling in the same sense, but sure in some sense they are. Even having an entry level “risk model” is more sophistication than most home traders. You can’t just dismiss all that as nothing.

These clowns shorted 170% of float. If that's not pure gambling teetering on market manipulation, I don't know what is.

It's mostly just one hedge fund. It would be an overgeneralization to call all hedge fund clowns...

Re: GameStop: Anger as trading in GameStop shares is restricted

#60

Post by gruez » Thu, Jan 28, 2021, 5:12 PM UTC

latch wrote: post #23

gruez wrote: post #9

Earlier quoted context omitted.

But what's the endgame? That the stock will go up forever, so that the existing investors are perpetually being paid by future investors?

I think the endgame is that it isn't perpetual: the final "investor" is the original short-seller.

I guess that while this is theoretically possible (that the retail investors walk away with a healthy profit, at least in aggregate), this is complicated by existing shareholders cashing out (which basically is a transfer of money to them). It also supposes that all the retail investors can act in unison and won't break rank (which will cause the prices to tank).