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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#551

Post by deelowe »

kevinsundar wrote: post #450
freeone3000 wrote: post #359

Earlier quoted context omitted.

It's also very hard to exit a falling position. It was hard to exit a rising position this morning -- the stock was on trading hold multiple times. By the time you notice it's falling, it's too late to sell

You can manage risk with stop-loss. Its not really that hard. You can use this to "lock-in" profits without selling.

Someone has to be around to buy the stock. Stop-loss or not. Once all this implodes, there will be a ton of retail investors left holding the bag.

Re: GameStop Is Rage Against the Financial Machine

#552

Post by eindiran »

delaaxe wrote: post #547
throw0101a wrote: post #506

Earlier quoted context omitted.

> At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. So basically like almost every other trade? Every buyer needs a seller and vice versa. If you're active in the market, why do you think you're right on any particular trade and the person on the other end is wrong?† * If you're buying, why is the other…

Whenever a human places a trade, the counterparty is almost always an algorithm or some kind of automated market maker

But behind the algorithm there is a human trader with motivations and market knowledge who is commanding it; the fact that the buyer is, in some technical sense, an algorithm doesn't seem very relevant to me.

Re: GameStop Is Rage Against the Financial Machine

#553

Post by mancerayder »

The part that's understated is that the short sellers engage in their own broadcasting - and no one ever REALLY knows whether to trust them. Citron Research and Muddy Waters and these others post, places like CNBC re-tweet, Bloomberg mentions it, etc. And that has a predictable effect, or an effect that's a self-fulfilling prophecy.

I don't know if the David and Goliath story that played out here (if it is even really that) is that of longs banding together against shorts with greater aggregate cash and causing the squeeze, but rather a social platform having more social influence of information transfer than the traditional short broadcast mediums, and causing the squeeze.

Maybe that's the interesting story here of 2021 that makes it a unique twist. A 'democratized' medium of information exchange causing random people to organize in new ways.

Re: GameStop Is Rage Against the Financial Machine

#554

Post by Uehreka »

SomewhatLikely wrote: post #422
admax88q wrote: post #315

Earlier quoted context omitted.

> The "little guy" refers to the Reddit traders that are making a killing right now, with the expectation that eventually the stock price will crash again. The reddit traders are only making a killing if they're selling these inflated positions. At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. There's…

The daily volume is higher than the total number of shares for the company. Lots of people are locking in their gains. Of course someone else is taking their place at an even higher cost basis.

In the end I have a feeling it’ll be something like: the first 1% to invest will make a fortune, the first 10% to invest (who are selling now and maybe tomorrow) will be able to pay off student loans, credit card debt or maybe buy a car, but then the other 90% will either lose small or lose big.

I’d guess that in the future if you run into someone who traded GME this week, you’re more likely to meet a loser than a winner.

Re: GameStop Is Rage Against the Financial Machine

#555

Post by BelenusMordred »

ta1234567890 wrote: post #384

This is a great example of how the stock market is not about fundamentals, just like Bitcoin, it’s all about popularity and perception. In the end, people don’t care if the “stock is really worth” the price, they only care if themselves or someone else are willing to pay the price, nothing else really matters.

What are the "fundamentals" of bitcoin?

The only varying metric it has is the denomination you measure it in. Whether that is Venezuelan Bolivars or USD.

Everything else is set in stone.

Re: GameStop Is Rage Against the Financial Machine

#556

Post by JumpCrisscross »

fredliu wrote: post #98
colllectorof wrote: post #37

If you want an entertaining explanation of what's going on with GameStop's stock, I highly recommend these videos from Louis Rossmann: https://lbry.tv/@rossmanngroup:a/wallstreetbets-vs-citron-re... https://lbry.tv/@rossmanngroup:a/why-mainstream-media-s-slan... https://lbry.tv/@rossmanngroup:a/gamestop-shorts-lose-billio... https://lbry.tv/@rossmanngroup:a/gamestop-shorts-are-full-of... (That's how I learned about t…

Great explanation. IMO the GameStop phenomenon is the result of the combination of democratization of trading through software (Robinhood no fee trading, doing it on your cellphone) + social media enabled mass scale online community building (around some previously fringe niche). Any area that is subject to this kind of combination of change could face similar situation where the old institutions guarding the area wo…

There is a third factor: a generation of investors who have never really lost money in the market.

Re: GameStop Is Rage Against the Financial Machine

#557

Post by delaaxe »

nostrademons wrote: post #543
restingrobot wrote: post #440

Earlier quoted context omitted.

You're forgetting the stock is 125% over shorted. There literally isn't enough stock for shorts to cover their current positions. That's why there is potential for infinite, (huge) gains as long as everyone holds.

That's like saying that the money supply is $5.2T but the U.S. national debt is $28T, so all the money in the world couldn't pay off the U.S's debt. Technically true, but completely missing the point of how currency circulates. In reality, when a short covers they buy back the stock and pay back the broker or market maker they borrowed it from. Then the broker or market maker sells it again. Then the short can buy ba…

Except shorts pay borrow fees but longs can hold indefinitely for free. Borrow fees on $GME often go as high as 80%

Re: GameStop Is Rage Against the Financial Machine

#558

Post by fennecfoxen »

throw0101a wrote: post #506
admax88q wrote: post #315

Earlier quoted context omitted.

> The "little guy" refers to the Reddit traders that are making a killing right now, with the expectation that eventually the stock price will crash again. The reddit traders are only making a killing if they're selling these inflated positions. At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. There's…

> At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. So basically like almost every other trade? Every buyer needs a seller and vice versa. If you're active in the market, why do you think you're right on any particular trade and the person on the other end is wrong?† * If you're buying, why is the other…

> So basically like almost every other trade?

No; most trades are traded because you expect when you're "left holding the bag" that bag will have money in it.

Re: GameStop Is Rage Against the Financial Machine

#559

Post by xwdv »

jrochkind1 wrote: post #463
xwdv wrote: post #431

Earlier quoted context omitted.

This would be justice though. If you were in it from the beginning as a true believer you probably got tons of money. If you’re just chaser and bandwagoner coming in at the end you will be punished for your greed along with the short sellers.

Why do you think those in it from the beginning are less greedy than those coming in later?

Because at the beginning there is no evidence the plan will work, and you could very well just be blowing a bunch of money. It’s like the people who mined Bitcoin very early and stashed them in their hard drives.

Once the stock picks up steam though, it attracts people who purely just want to make a fast buck, and less true believers.

Re: GameStop Is Rage Against the Financial Machine

#560

Post by zaptheimpaler »

MrStonedOne wrote: post #387

> and I don’t think the answer to today’s many ills is to empower poor people to bankrupt themselves with margin accounts and derivatives. I love the double speak wrt margin accounts. They want to mix up naked margin accounts where your broker gives you a loan of money to trade with, with the types of margin accounts used by WSB peeps, where the margin is only to cover the 2 day settlement window or the time it takes…

YES. Not enough people understand this. Normies love to take a shit from on high on WSB, thinking they are a bunch of retards about to lose their money, but anyone who goes a little bit deeper than the surface can see its a very, very powerful resource to learn how to trade and how markets really work.

Of course if you only see WSB as a stock pumping forum and throw your money into whatever ticker is mentioned, you are at the mercy of fortune. But the ones who do use WSB productively to learn can make enormous returns previously reserved only for hedge funds. The normies only see the news stories about the first kind of user who gambled and lost, clamor for even MORE regulation, and soon that pathetic 7% annual return on index funds will be even lower as you close off more and more opportunities. The VCs and sophisticated investors will gain even more from further asymmetric opportunities and the wealth inequality will widen.

Ultimately protecting those who are at poor at investing from their own incompetence also means locking out those who are good at it and only cements inequality further. Every reduction in risk means a reduction in reward.

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