561–570 of 1001 posts
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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.
According to Ortex it's back under 100% float to loan.
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"Melvin and Citadel can BUY GME themselves to mitigate the risk." Melvin buying GME is not "mitigating," it's closing the short position. If you close your short position high, you got screwed and you lost money. They did close it recently... At a massive loss. "I firmly believe that the hedge funds that held GME short positions have bought into GME to mitigate their exposure. They likely bought in algorithmically us…
Citadel invested in Melvin this week on the cheap. Citadel is the main internalizer for Robinhood. I don’t think it changes much about your post but the connection between HFT and Melvin is public and directly financially relevant.
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The second that the shorts have covered the price isn't going to drop to $90, it's going to drop back to $20 and most of the WSBers who were holding out for $2000 will lose their shirts. The shorts are going to lose, no doubt. But once they've lost, the stock price is probably $20. A lot of WSBers are going to be holding stock at that point, and possibly on margin. And that stock is going to be a crappy retail stock.…
I sold a GME call option with a strike price of $320 and expiration in July today for $200. A pump and dump by novices is easy money if you know how to play it. Everyone knows this is going to crash, the question is when?
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> Plenty of WSB posts with multi million positions. This is interesting. I wonder what percent of outstanding shares of $GME WSB commenters collectively own and whether the SEC could make the case they're operating as a "group" for disclosure purposes.
What is there to disclose when the group is entirely open for anybody to see?
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It's a short squeeze. The guys left holding the bag are people that are covering their short positions in the company. The average retail investor is not shorting stocks.. There will probably also be some people that try to jump on the trend too late but that isn't who is being hurt right now.
Many of those shorts are exiting their positions, or already have, and taken their losses. They're the ones who can afford their losses. Perhaps there are some funds still holding out their end of the short war, but by the time this is all over... like over over... it will be retail traders selling inflated positions to other retail traders.
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> 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 The same applies to Bitcoin, though, for the past 10 years. Someone's holding the bag at $30K as we speak... Gamestop can (theoretically) go the same way.
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> 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.
On any given trade you can end up with something worth more or less than what you started with. Even if you sell and cash out, you may end up "losing" because things went on to perform better than you expected and the person/entity on the other end of the trade knew something you didn't.
The market owes you nothing.
So, can someone explain rationally how options/derivatives are actually useful to the economy, rather than a market manipulation and gambling mechanism? In the traditional, elementary school understanding of stock, people buy into a company because they want part ownership, and the stock goes up as the company does well and has solid financial strength. Derivatives seem to be an unnecessary accelerator.
I'm generally sympathetic to the idea that financial derivatives are a great evil, and a huge part of what feels "broken" about the current system. However, consider futures, which are very similar to options. Futures were, as I understand it, popularized in Chicago as a way for farmers to be able to get money for their crop right now, at a fixed price. In this way, they could pass the risk -- and a little bit of the…
Can anyone tell me why SEC won't just step in, suspend trading, and force some kind of resolution? Its obvious that the market has been effectively broken by the short sellers. It might just make the redditors more angry and likely to hit other shorted stocks, and possibly cause markets to decline, but its the best applicable solution i see. https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_tr...
They only interfere when the amount of magical floating stock that would need to materialize to fulfill all the contracts and pay back all the loans is too much to actually break down the market. That is not the case yet. As long as the only consequence of a squeeze is that people that made bets loose all their money the SEC is not going to do anything. No one is being fooled into buying something that's riskier than…