GameStop Is Rage Against the Financial Machine • Hacker News Board

Re: GameStop Is Rage Against the Financial Machine

#631

Post by slg » Thu, Jan 28, 2021, 12:48 AM UTC

GrumpyNl wrote: post #540

slg wrote: post #529

Earlier quoted context omitted.

>b) 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 stock price is completely disconnected from the value of the company. Either this is a bubble that will eventually pop and every small player still holding it will be badly hurt or the bubble doesn't pop, it continually exposes an inherit flaw in our financi…

"The stock price is completely disconnected from the value of the company", this goes for most of the stock prices.

I'm not going to disagree with you on the semantics of that, but this simply is in a totally different league. There is almost always plausible deniability that the stock value and company value are related. Meanwhile Gamestop is up over 1600% in a couple weeks with no fundamental changes to the company. There is no argument that can be made for anything else beyond the stock price being manipulated by a coordinated effort.

Re: GameStop Is Rage Against the Financial Machine

#632

Post by rightbyte » Thu, Jan 28, 2021, 12:50 AM UTC

oars wrote: post #530

0xffff2 wrote: post #447

Earlier quoted context omitted.

It's entirely possible for short sellers to have legally borrowed more stock than is actually outstanding. There is no evidence that I've seen that they've done so illegally.

Can you explain how it's possible to borrow more stock than is outstanding?

If a shorter lends his one borrowed stock to another shorter there will be a chain of shorters for the one stock. Isn't that what happened?

Re: GameStop Is Rage Against the Financial Machine

#633

Post by pivoter » Thu, Jan 28, 2021, 12:50 AM UTC

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.

not really. you're going to get killed because shorters have been hunting for stop losses all day for the past week.

Re: GameStop Is Rage Against the Financial Machine

#634

Post by SpicyLemonZest » Thu, Jan 28, 2021, 12:51 AM UTC

6nf wrote: post #615

fennecfoxen wrote: post #558

Earlier quoted context omitted.

> 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.

How do you know they don’t think that the GameStop bag will have money in it?

Because they spent much of the last few days discussing their reasoning on public forums, and it consisted almost exclusively of one of two messages:

* Short sellers have to buy lots of GME from us on Friday, so we'll be rich if the stock has a high price then.

* The rest of us are buying and holding lots of GME so you should too.

Re: GameStop Is Rage Against the Financial Machine

#635

Post by postalrat » Thu, Jan 28, 2021, 12:53 AM UTC

ping_pong wrote: post #4

It's really not. Because eventually retail is going to get destroyed. Yes, some hedge funds have lost their shirts, but those are the first ones who were in the short before the squeeze. The hedge funds and more importantly day trading shops making money right now are the ones who saw the activity and are goosing the stock price right now. I don't know if people realize that there are thousands of day trading shops w…

If you already know what will happen then surely there must be way way for you to make a profit on that knowledge.

Re: GameStop Is Rage Against the Financial Machine

#636

Post by pivoter » Thu, Jan 28, 2021, 12:54 AM UTC

hbosch wrote: post #356

fredophile wrote: post #330

Earlier quoted context omitted.

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.

way too many people on HN talking about stuff they don't know anything about.

I guess you got the finra report on short interest before everybody else and know something we don't? lol

Re: GameStop Is Rage Against the Financial Machine

#637

Post by wolverine876 » Thu, Jan 28, 2021, 12:56 AM UTC

silexia wrote: post #366

Traster wrote: post #347

Earlier quoted context omitted.

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?

I know nothing about the parent, but because most such claims are false, it should mean nothing to rest of us. And I think the parent shouldn't make it, as they are inflaming and encouraging a situation that will hurt a lot of people.

We know well that random people on the Internet aren't reliable. For those who respond, why are you taking it at face value?

Re: GameStop Is Rage Against the Financial Machine

#638

Post by unFou » Thu, Jan 28, 2021, 12:57 AM UTC

saddlerustle wrote: post #437

ineptech wrote: post #190

Earlier quoted context omitted.

If you put $X in to AAPL, you can hedge against catastrophe by putting $X/10 in to an option to sell AAPL, which will limit your losses if the stock drops to 0 tomorrow. So in theory, they can be used sensibly. But in practice I think it's not the existence of the derivatives market, it's the size. Our economy is like a town with 1 farmer and 9 investors who spend all day wagering with each other on whether the farme…

> Our economy is like a town with 1 farmer and 9 investors who spend all day wagering with each other on whether the farmer will have a good crop. Objectively, that's not true. The finance industry is under 10% of GDP and under 5% of jobs.

Interestingly enough, a quick google search shows US farms contribute 136 billion, or about 0.6% of GDP. So, more like 1 farmer to 19 investors?

Re: GameStop Is Rage Against the Financial Machine

#639

Post by noncoml » Thu, Jan 28, 2021, 12:58 AM UTC

wolverine876 wrote: post #629

How does this differ from other populist manipulation via social media? We've seen this technique used repeatedly in many domains. IMHO, it looks obviously the same in many ways. It's very effective and we should have anticipated that it would be used to move markets. I expect people on HN to recognize it. The question is, what will we do about it? It's tearing society apart and now it looks to damage our economy too…

> How does this differ than other populist manipulation via social media? We've seen this technique used repeatedly in many domains. IMHO, it looks obviously the same in many ways.

Are you sure you are up to date with what happened?

My understanding, and in layman's terms, is that a hedge fund shorted more GME stocks than they are available. Redditors noticed and correctly thought that if they buy all the stocks available, when the shorts expire and the hedge funds will be forced to buy, they(redditors) can dictate the price.

They just beat them at their own game and rules.

Want a fix? Make shorting illegal.

Re: GameStop Is Rage Against the Financial Machine

#640

Post by pivoter » Thu, Jan 28, 2021, 12:58 AM UTC

Domenic_S wrote: post #548

levesque wrote: post #336

Earlier quoted context omitted.

That's not the point. This is a purely technical play, fundamental valuation methods have been thrown out the window a long time ago. Game stop is maybe worth 5-40$, but these reddit WSBers think the stock will keep rising due to the short squeeze, beyond 1000$ even. Just grab some popcorn and watch the show.

> Game stop is maybe worth 5-40$ What fundamentals make you think that? That's substantially discounted vs revenue.

you don't seem to understand what's going on. gamestop itself is just stuck in the middle of a battle created because of financial investment tools. It doesn't really matter which company it is, it just matters that the company is shorted at >100% of total issued shares.

if the gamestop is still shorted at 130-150% of total issued shares (finra report coming soon) that means the shorters are going to be paying interest and getting margin called as GME prices goes up. the fees for borrowing GME to short have been 30-60%. That is absolutely insane, if you can even find shares to short, which I haven't seen any for the past day.