Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
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Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#2Do I get this right and this is just interest that they have paid? Shorts are not covered yet? ny guess how long can Point72 pay interest/bail them out on these shorts?
"I keep hearing that 'most of the GME shorts have covered' — totally untrue," said Ihor Dusaniwsky, S3 managing director of predictive analytics. "In actuality the data shows that total net shares shorted hasn't moved all that much."
"While the 'value shorts' that were in GME earlier have been squeezed, most of the borrowed shares that were returned on the back of the buy to covers were shorted by new momentum shorts in the name,"
https://www.google.co.uk/amp/s/www.cnbc.com/amp/2021/01/29/g...
Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#3The "new shorts" are the options traders who have placed millions of calls since Friday . . . no margins, but increased leverage
Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#4The "new shorts" are the options traders who have placed millions of calls since Friday . . . no margins, but increased leverage
https://shortvolume.com/ if you put in GME there, it shows short volume is being matched by regular volume too...
Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#5Do I get this right and this is just interest that they have paid? Shorts are not covered yet? ny guess how long can Point72 pay interest/bail them out on these shorts? "I keep hearing that 'most of the GME shorts have covered' — totally untrue," said Ihor Dusaniwsky, S3 managing director of predictive analytics. "In actuality the data shows that total net shares shorted hasn't moved all that much." "While the 'value…
Even if S3’s data is correct, I don’t believe it tells you anything about exactly what those positions are.
The volume has been so high that AFAIK, many of the original shorts could have closed out and re-sold short into the $300+ insanity (or other funds opened new short positions). That is, new short positions could even be in the money right now (at least some likely are).
Of course, another insane rush and buying spree could squeeze a short position at any price. It’s a giant game of chicken. To me, having a bearish position at $300 seems well-founded, but it certainly seems risky going against an army of people that hate you and are willing to lose a lot of money just to spite you.
It will be very interesting to see how this all unwinds.
Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#6How could they lose $7B?
Melvin Capital Recent 13F : https://sec.report/Document/0000905718-20-001111/
It shows they had about $757mm worth puts. Assuming all of that puts are worth zero, their max loss will be $757mm. GME loss would be $55mm.
Hedgefunds don't have to disclose everything? Just trying to understand how did they lose that much.
Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#7How could they lose $7B? Melvin Capital Recent 13F : https://sec.report/Document/0000905718-20-001111/ It shows they had about $757mm worth puts. Assuming all of that puts are worth zero, their max loss will be $757mm. GME loss would be $55mm. Hedgefunds don't have to disclose everything? Just trying to understand how did they lose that much.
Payoffs for a short position is stock price right now minus stock price at maturity. You can make a synthetic short by longing a put and writing a call at the same strike price and the problem you see here with the short squeeze is really writing the call.
Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#8How could they lose $7B? Melvin Capital Recent 13F : https://sec.report/Document/0000905718-20-001111/ It shows they had about $757mm worth puts. Assuming all of that puts are worth zero, their max loss will be $757mm. GME loss would be $55mm. Hedgefunds don't have to disclose everything? Just trying to understand how did they lose that much.
1 put = 100 shares of the stock. Without knowing the put details it's hard to know the extent of their loss. But your total could be close to what they lost just on GME.
Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#9Do I get this right and this is just interest that they have paid? Shorts are not covered yet? ny guess how long can Point72 pay interest/bail them out on these shorts? "I keep hearing that 'most of the GME shorts have covered' — totally untrue," said Ihor Dusaniwsky, S3 managing director of predictive analytics. "In actuality the data shows that total net shares shorted hasn't moved all that much." "While the 'value…
Even if S3’s data is correct, I don’t believe it tells you anything about exactly what those positions are. The volume has been so high that AFAIK, many of the original shorts could have closed out and re-sold short into the $300+ insanity (or other funds opened new short positions). That is, new short positions could even be in the money right now (at least some likely are). Of course, another insane rush and buying…
How many retail investors make up the army? I’m gonna spitball less than 7m worldwide (the total number of r/wsb subscribers)
Then, I’m going to guess most of them can afford 1 share of GME at $300 and not much more.
Doesn’t sound like a very powerful army when you break it down into reality-based numbers.
Re: Melvin Capital Lost 53% in January, Hurt by GameStop and Other Bets
#10Gee, they should really be more careful with their risk management. Irresponsible decisions are extremely costly.