931–940 of 1001 posts
Earlier quoted context omitted.
he also said, "the market can remain irrational longer than you can remain solvent."
Since we're doing JMK quotes, he also said "Capitalism is the extraordinary belief that he nastiest of men, for the nastiest of reasons, will somehow work for the benefit of us all."
Earlier quoted context omitted.
But once borrowed, the shares can’t be borrowed a second time. So if 100 shares are borrowed and sold short, they’re back on the market, yes. But the total number of shares available is 100, not 200.
Alice lends a share to Bob. Carol buys the share from Bob. Carol lends the share to Doug. Ellen buys the share from Doug. The share has been lent twice. There is one share, and Ellen owns it for real. Everyone else has these agreements involving collateral and promises to get/give a share back.
Earlier quoted context omitted.
They're both forms of retirements savings, but a 401k is a totally different form of retirements savings from a pension.
I don't know why people get confused about this! It's a fund to give you income in retirement. That's a pension! You can have both defined-benefit and defined-contribution pensions. Not all pensions are defined-benefit: 401(k) is a defined-contribution pension. Wikipedia say it's a pension: > a 401(k) plan is an employer-sponsored defined-contribution pension https://en.wikipedia.org/wiki/401(k) The US Code also says…
No didn't think so...
Earlier quoted context omitted.
> A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. This is a common misconception, but fundamentally wrong. Every short sell has an equal but opposite buy. Therefore every share shorted creates a new synthetic long share. Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shar…
>Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shares long available to buy back- 100 owned by Alice and 100 by Chuck. That is not quite true. If after Bob has borrowed and sold 100 shares to Chuck, and then David comes along and makes an offer to Alice to buy 100 shares, Alice can only sell her shares once they are recalled. Which means Bob now has to scr…
Earlier quoted context omitted.
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?
Shit. You wrote a naked call on GME today? That’s insane. Even if you think you know what your doing. This is the steam roller. And you’re the guy picking up the penny in front of it. But, the premiums can be pretty juicy. Looking at the 29Jan 320 Call options, if you were good, and called today’s top. Then you could’ve wrote the call at 145. Then held it for 90 mins, when it bottomed out at 89. Netting you a cool $5…
On the other hand, if I am right that this is about the peak, then I get $20,000.
I could either close my position, or I could potentially buy the same call option strike with a shorter expiration for cheaper... Most likely the run up on GME will be over by then. If not, I could just buy another call option with a further strike on top of it.
Perhaps my strategy should be selling call options dated for 79 days from now with a strike of 320 for $190... Then buy call options for when I think this thing will end... Say 9 days out with the same strike for $152. If things go crazy high, then I can use my buy call option to cover the sell call option. If it doesn't, then my profit is $192-152 = $40.
My theory is the stock has run insanely high, and even Elon Musk has made comments that are priced in. At this point, WSB users may have all their money they want in this play invested... Who else comes in to sustain the current price or drive it higher? What if GME execs decide to sell some shares to raise funds? Or if the SEC asks them to to stop the short squeeze? The stock almost reached the WSB pie in the sky goal of $1000... How many people are going to make sure they aren't the last fool in the stock holding the bag?
But if I am really wrong, and the stock went to $5000 on a short squeeze, that would hurt. $5000-320= 4,680 x 100= $468,000.
I probably should buy a shorter run buy side call option to cover my risk. $20,000 with high probability outcome vs $468,000 with a low probability outcome...
Who exactly sells call options anyways? Someone has to be selling these naked in order to provide the volume that is out there, right? Probably people doing it behind an LLC shield so they can't take unlimited losses and will leave their broker ("too big to fail") holding the bag?
Earlier quoted context omitted.
That's not the point. This is a purely technical play, fundamental valuation methods have been thrown out the window a long time ago. Game stop is maybe worth 5-40$, 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.
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 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.
Earlier quoted context omitted.
> A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. This is a common misconception, but fundamentally wrong. Every short sell has an equal but opposite buy. Therefore every share shorted creates a new synthetic long share. Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shar…
I understand how this short sale "chaining" can result in a stock being over 100% shorted without any illegal naked short selling taking place, but why wouldn't this chaining not result in a short squeeze and therefore bid up the price? I'll walk through an example and maybe someone can point out what I missed. Let's say we have a market for some stock. There are only 5 traders (Alice, Bob, Chuck, Dave, Eli) and 100…
In reality their shares are actually on loan, but they're probably not even aware of it. If and when they go to sell their positions, it will instantly execute, and the broker will recall the shares before settlement (which occurs three days after the trade's executed.)
So, in fact Bob and Dave now have their pick of the litter and can buy back from either Alice, Chuck, or Eli.
Earlier quoted context omitted.
As if a few hundreds worth of GME stock would matter to a billion dollar hedge fund. You can also go to 4chan where you can find selfproclaimed nazis who thinks they are fighting the jews on wall street. It is all very idiotic. As someone noticed elsewhere here on hn; regardless if it is a pump and dump manipulation or a short squeeze, GME will eventually come down. Maybe not in a week but surely in a year.
Would you like to wager when GME will decline by selling short?
Earlier quoted context omitted.
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 intere…
I understand very much what’s going on, I wasn’t asking why it isn’t worth today’s price, I was asking why it’s worth $5-$40. GameStop did 6 billion in revenue 2020. At $5 per share that’s a ~348mm valuation.
The value of a business with the same revenue as Gamestop, but with a normal profit margin and a stable or growing market is a very different beast. The only way Gamestop has any value is either to keep cutting the unprofitable stores until they just disappear as a company, like Sears did, or leverage the brand to pivot to digital. This is fairly difficult since the consoles are all locked to the console manufacturer's store, and Steam is already dominant on the PC.