From reading the FT they haven’t outright banned buying the stock, you just can’t buy it on credit or margin but have to put up real $, which prices a lot of people out.
why shouldn't it always be like this, for oiks like me but also massive banks & hedge funds ? I don't get it (clearly)
I couldn't resist and bought another $1000 @ $200 just before the close yesterday (eToro reopened trades with about 45 mins before the close). Roll on 2:30pm, be ready to laugh at my misfortune :p
According to some news posts the hedge funds had already lost $70b by the end of the day yesterday - today could be much worse for them (lets hope the SEC or trading platforms don't freeze us out...)
Apparently stock liquidity became a real issue yesterday, so many people were holding that the hedge funds couldn't buy enough to offset their shorts, which drove the price up to nearly $500, that's when the trading platforms changed to only allow sells and triggered the dip. The hedge funds hope was it would dip low enough it would cause a panic and a rush to sell and crash the price enough that their shorts were OK but fortunately enough people still held that the crash didn't happen.
Not sure if they can try the same tactic today, would depend when their shorts expire - they might have already accepted they're making a big loss and that by buying to try and cover their positions they'll lose less than they would by failing to crash the price in time, this is the scenario where the Reddit $1000+ price predictions come from.
I have a feeling something else will happen and we'll all end up shafted as the rules get changed to help the funds...
Likely this. All the evidence points to the game being rigged in favour of the house and the house's friends.
This is scandalous. I can't believe Facebook has shut down their group for adult sexual something. It's duck Ng unbelievable. What is it that means that once you've climbed the greasy pole you are obliged to royally shit on the people below
Because l can't literally switch off (workhard/playhard makes sense now, wish the pub was open) l'll engage.
The rules of any exchange will NOT be changed.
The terms of business between you and your broker/platform may. But that, no doubt, will be in their small print that you have signed up to.
But while we are talking about rules and "the man". When this goes south, which it HAS to, will it be right that the "little man" wasn't first warned and then restrictioned from a scam.
Gotta ask, would you be throwing this money onto a roulette table?
Good luck
you are obliged to royally shit on the people below
Is this a Prince Andrew reference?
Well someone's gonna get shafted anyway.
A big chunk of the 100,000 brand new sign ups to Trading212 for sure.
At the end of the day, if you haven't partially cashed out for a profit then either you're going to be left holding a stock in a company that will magically change it's business overnight in such a way that it genuinely commands that super high price, or you're going to be left holding a worthless stock.
You haven't made a profit, and you're not rich until you are out.
It's not the shafting by the big guys changing the rules that will shaft 70% of the hype train. It's just the fundamental of playing chicken. Hopefully those 100,000 that jumped on it after hearing it on mainstream media have the intelligence to use stop loss features. But ultimately someone, somewhere, is gonna be holding the stocks bought at insane prices.
And it's funny that the "poor" people are those that can go splurge a 4 figure sum on an outright gamble to get rich quick. "poor" in my dictionary are those that would go down the bookies and waste a tenner's worth of their dole money on Tiger Lily in the 4:30 at Kempton hoping to win big.
terrible comparison. This is [i]way[/i] more exciting than roulette, and I’m not even involved! 🤣 Plus there’s the chance of shitting over a bunch of ****ers! Brilliant! 😂😂 Most commenters on the Reddit thread seem to have written the money off anyway, and all the others from outside who’ve jumped on the hype train? Adults, presumably, who (should) understand the risk.Gotta ask, would you be throwing this money onto a roulette table?
Gotta ask, would you be throwing this money onto a roulette table?
I rarely gamble and absolutely this is a gamble and for sure it's going to crash at some point (not necessarily today - although there's a fair chance of it happening). It's not as black and white (or red) as roulette though, unless ofc we get locked out of selling to (when the slide happens). Of the $1500 I'm now in for I'm planning to cash out $1000 shortly after trading opens (assuming it hits $250ish), that means I'll be $500 up this week (cashed out) so I can afford to leave the $500 left as a pure gamble. Of course it could start plummeting immediately after opening and I end up losing big time (I have stop losses set...) but hey it's been a fun ride :p
From reading the FT they haven’t outright banned buying the stock, you just can’t buy it on credit or margin but have to put up real $, which prices a lot of people out.
why shouldn’t it always be like this, for oiks like me but also massive banks & hedge funds ? I don’t get it (clearly)
In all fairness it is really quite complicated. All newbies see is people posting screen graps of their RobinHood app showing $100k gains and think 'I want that some of that'.
Several things are happening.
The '$100k gains' etc aren't real until they sell all their stock and have real $$ is their account. For this to happen (ie them to be able to sell), someone else must be willing to buy. These are shares in a crap company no one really wants to own. So, remove all the get rich quick euphoria (madness) and it's a house of cards waiting to collapse (not unlike Bitcoin).
Most people buying the stock on 212 / RobinHood etc aren't buying with their own money. They put in a small deposit eg $100 or less and then buy a small number of shares (or part shares). If those shares rise in price, then the platform offers to loan them a percentage of their paper gain (margin) which they can then trade again and buy more shares, pushing the price up, so they make another paper gain and the plaform lends them a percentage of that to buy more. Amplify this by 500,000 people trading on margin on one stock with low liquidity (not many shares available in the market to trade) and you rapidly get a huge spike in the price.
However, most of the money spent buying stock was margin ie money the trading platform put up and leant to it's traders. For every margin trade, the platform places a margin call, which is an automatic sell on the price falling near to the price needed for the client to be able to repay his debt back to the platform. So, there were several million trades made manually to build the stock up and they are sat upon seveal million margin calls which will be automatically actioned the minute the stock starts to fall. It's a massive powder keg, just sitting there waiting for someone to light the fuse.
That fuse is sentiment changing / redditors getting bored / too many trying to convert paper gains into real $ gains.
RobinHood etc are also at risk here as if the price falls too fast and they can't sell quick enough (not enough buyers) they will loose money as they leant most of the money which pushed the stock up, hence they did / have suspended margin buying (and tapped their investors for $1b equity yesterday to help shore up their finances).
At some point Gamestop shares will return to their original value which will be a lot less than many 100,000 people bought them for. Anyone left holding them is in for a shock...
Perfectly sensible approach... Well played.
How many others have set stop losses?
Yours is above theirs, l hope.
Sorry really not wishing you ill... In fact l'd love it for you to be smiling and with enough money in your sky rocket for a new bike at the end of this
I'm just trying to point out that, as Andy above has, the Reddit crowd will end up eating itself.
Better to be lucky than good
Have fun
It is fascinating watching it all play out, especially now that it's gone political with, bizarrely AOC and DonJr agreeing that it's an outrage.
https://twitter.com/AOC/status/1354830697459032066?s=20
https://twitter.com/DonaldJTrumpJr/status/1354793103090212865?s=20
I bet there are far more politicians who receive substantial donations from Wall St (if they weren't before, they're asking for them now) so ironically this could be the unifying event that sees cross-bench collaboration.
Another interesting facet is how the internet detectives have come out to essentially work for WSB:
From reading the FT they haven’t outright banned buying the stock, you just can’t buy it on credit or margin but have to put up real $, which prices a lot of people out.
They banned trading options on margin which is perhaps a justifiable move. They also automatically closed people's call positions when the stock was at its lowest yesterday, citing concerns about volatility. More dubious. But the smoking gun was later when they prevented anyone from buying whilst still allowing sale of stock. Given that a large proportion of the 'diamond hands' WSB / Reddit / hype stock of GME was bought through that platform, that was a huge driver to force the price in one direction only. This is where the internet detectives come in. They discovered that, incidentally*, RobinHood is apparently 40% funded via Citadel LLC which owns Melvin Capital AND that Melvin took another short position minutes before the ban on buying new stock.
Yesterday showed that there are clearly powerful forces at work. Wall St are making big moves to stop this from happening. The entire trading app platform RobinHood has basically been thrown under the bus and plenty of other fairly indiscreet / legally dubious moves have been made in an effort to stop the run on GME. To me this seems like Wall St are scared.
I still think the gains so far have been the hype rather than any short squeeze - particularly if we believe the rumours that Melvin and others are doubling down on shorts. I think the stock is going up without any other intervention (foul or fair). But what do I know?
* Not incidentally.
How many others have set stop losses?
WSB are advocating against this, since RobinHood and others sell information about where stop losses are placed to the bigger companies. Apparently this is how RH et al make their money on 'commission free' trades. If you're not paying, you're the product etc.
I.e. if a firm knows that a massive selloff will occur at a certain price ($1000, $420.69 (!)) then they can manipulate the market a bit to engineer a crash. It's all very shady.
As I've said before I can't help feel that WSB are going to end up footing the bill here. They shouldn't, if this is allowed to play out naturally, but there are some big dongs now involved.
This is where the internet detectives come in.
I do think a lot of it is conspiracy theory madness, the deep state flexing its muscles.
The whole thing was never going to end well and whatever happens loads of people will get burnt and rather than admit there were just idiots jumping an a bandwagon they didn't understand, it's easier to point to 'The Man' and say he shafted me.
That stoploss talk is nonsense
That's "Frontrunning" defo not allowed
But if you've reddit, it must be true
WSB are advocating against this, since RobinHood and others sell information about where stop losses are placed to the bigger companies. Apparently this is how RH et al make their money on ‘commission free’ trades. If you’re not paying, you’re the product etc.
Engage brain before opening mouth.
My nephew is still holding apparently. I hope he knows what he's doing.
The whole thing was never going to end well and whatever happens loads of people will get burnt and rather than admit there were just idiots jumping an a bandwagon they didn’t understand, it’s easier to point to ‘The Man’ and say he shafted me.
FF, you're completely missing the point here. If the hordes get squished in a fair fight then fine, it's their own tough shit. But this isn't a fair fight. The establishment has realised they've ****ed up and gave changed the rules, so they win anyway. That is out of order, completely.
And for you to join in the bullshit calls that it's all to protect the stupid little people for they know not what they do, is just pathetic.
WSB are advocating against this, since RobinHood and others sell information about where stop losses are placed to the bigger companies. Apparently this is how RH et al make their money on ‘commission free’ trades. If you’re not paying, you’re the product etc.
They make money on each trade you make by charging a small percentage fee.
They are not part of the 'deep state' shafting the little man.
The little man is quite capable of shafting himself paying 100s of times over the odds to buy shares in a crap company no one wants to own.
FF, you’re completely missing the point here. If the hordes get squished in a fair fight then fine, it’s their own tough shit. But this isn’t a fair fight. The establishment has realised they’ve **** up and gave changed the rules, so they win anyway. That is out of order, completely.
And for you to join in the bullshit calls that it’s all to protect the stupid little people for they know not what they do, is just pathetic.
Well we'll have to agree to disagree here I'm afraid.
I just see a lot of people jumping on a get rick quick bandwagon buying stock in a crap company for 100s times over the odds. That, to me, is collective madness. The fact the market (who run the platforms which enable all this) want to stop this madness, is absolutely fine by me. Their market, their rules. I'd be very suprised if anything illegal has happened, markets trade trillions, are heavily regulated and have teams of lawyers checking everything. This is just an annoyance, not 'the kids' taking down 'the man' and putting civilisation at stake.
If that makes me part of the 'deep state', so be it.
If that makes me part of the ‘deep state’, so be it.
I have no idea why you're defending these fraudsters. Loads of shares get manipulated by the people at the top who make billions out of having a seat at the top table. It's a licence to print money, pure and simple. Yet when their own system and methods are used against them, you seem to think they are being treated unfairly. The fact that you think it's 'their market' is quite revealing. That's the whole bloody point, it shouldn't be their market and they shouldn't be able to make billions out of it for doing nothing. That's not 'deep state' it's just fraudsters lining their pockets in plain sight and buying off the politicians and regulators to protect themselves.
This is just an annoyance, not ‘the kids’ taking down ‘the man’ and putting civilisation at stake.
I don’t think all the Reddit Wall Street players are kids, neither are they particularly interested in being anti capitalist (in fact what they’re doing is completely aligned with capitalism.) they have loads of reasons for doing what they’re doing (some of which is “it’s a laff, to look how much money I lost)
That the market is reacting to them so vehemently is more revealing of that structure rather than a bunch of folk at home with a $500 side bet...
Engage brain before opening mouth.
Could you perhaps apologise for that? RobinHood's business model involves selling the order flow via larger institutions. Even if you don't believe they're *still* front-running and pocketing the spread after their [s]huge[/s] insanely small $700k fine for doing exactly that ( https://www.ft.com/content/dc3f8fb5-62e7-4774-98bb-28db801589ee), they will aggregate data on stop losses placed at the time of sale. I don't know whether they also gather data about stop losses placed at a later date.
The fact that you think it’s ‘their market’ is quite revealing.
There are lots of different markets out there which trade shares. No one is forced to use them, companies can choose to list or not and choose which market to list on (or have dual listings). Each market has its own rules and differ eg dual class share structures are permitted in some markets and not others.
There are lots of different platforms, eg RobinHood, each has its own rules and with margin trading, where they lend you money, they have their own rules on controlling how you spend their moeny.
No one is forced to use a market of a platform.
However, if you choose to do so, you play by their rules.
The markets are heavily regulated so are restriced by what they can and can't do by statute.
Yet when their own system and methods are used against them, you seem to think they are being treated unfairly.
In what way are they using their systems against them?
It’s a licence to print money, pure and simple.
The platforms make money out of each trade, so make money regardless of wether a client wins or looses. With margin trading it's much more complex as they leant the money to trade, so they have money at risk and will stop you getting into debt to them. They do this by limiting trades and selling your shares (bought with their money) automatically.
The markets charge fees to list on them and trade, so make money providing that service.
Traders can make millions and loose millions depending on how well the stocks they buy do, plenty of Hedge Funds loose, it's not the guarenteed cash cow people think it is. Just ask Crispin Odley.
it shouldn’t be their market and they shouldn’t be able to make billions out of it for doing nothing
Please give me an example of someone making billions out of doing nothing...
I have no idea why you’re defending these fraudsters
I'm just providing an alternate opinion / explanation. You don't have to agree with me.
I think the whole thing is just collective madness....
The markets are heavily regulated
but not that regulated that they put folk in prison, though, eh?
In what way are they using their systems against them?
By them I'm talking about the hedge funds and market makers. They routinely use their power to move share prices in their favour, either long or short. The small investors are doing exactly the same using their collective buying power. The only difference is that the small investors gain in this case translates to losses for the big funds holding the shorts. They f**** up, and were outmanoevred by a motley bunch of small-timers on an internet forum, and then they want to change the rules in their favour by forcing trading platforms to prevent buys which tips the market in their favour. It completely exposes the myth of 'free markets' and the monopolist greed of a tiny few at the top. And you want to defend them? Weird.
but not that regulated that they put folk in prison, though, eh?
There are plenty of people in jail for insider dealing / market manipulation / fraud.
However, it normally takes more than a few posts on Reddit to convict someone (even in the USA).
doesn't sound like anyone REALLY knows what they're doing, as no-one knows exactly how this will play out, not even the experts on here?My nephew is still holding apparently. I hope he knows what he’s doing.
and then they want to change the rules in their favour by forcing trading platforms to prevent buys which tips the market in their favour
Have any rules been changed?
I've read that some of the trading platforms, who are on the hook for massive losses due to margin trading, are restricting buys as they will end up having to unwind all the margin calls and could end up in debt as a result. Most of the trading on these platforms isn't the punters money, it's been leant to them.
Has the market explicitly banned buying GameStop shares?
There are plenty of people in jail for insider dealing / market manipulation / fraud.
Yeah, I mean, just look at the hundreds of people in the US they convicted after 2008...
Their market, their rules
Christ this is smooth brain thinking.
doesn’t sound like anyone REALLY knows what they’re doing, as no-one knows exactly how this will play out, not even the experts on here?
Hardly rocket science.
Three possible scenarios.
1. Overnight GameStop transforms itself into the next Amazon, worth trillions and catches up with the share price. All Redditers are vindicated and become millionaires.
2. An endless stream of new traders keep joining RobinHood etc and push the price up for all eternity
3. At some point people realise they don't want to own shares in a crap company and try and sell, doesn't take a rocket scientist to realise the price will fall (a lot)
They discovered that, incidentally*, RobinHood is apparently 40% funded via Citadel LLC which owns Melvin Capital AND that Melvin took another short position minutes before the ban on buying new stock.
Does that not add a whole new layer to this?
The difference here being of course that the massive risky bet that the hedge funds took was exposed by research done by the wallstreetbets Reddit forum and subsequently their platforms for engaging in the market are being closed, whereas the hedge funds aren’t. This is simple market manipulation. You either read that as the market “protecting the little guys for their own benefit of course” or “protecting their own, against their own risky behaviour”
many folk are interpreting it as the latter rather than the former
Does that not add a whole new layer to this?
Probably not.
Going to be an interesting day today. Lots of short positions due to expire. If the price rockets as a result then who knows what will happen.
Hardly rocket science.
Three possible scenarios.
1. Overnight GameStop transforms itself into the next Amazon, worth trillions and catches up with the share price. All Redditers are vindicated and become millionaires.
2. An endless stream of new traders keep joining RobinHood etc and push the price up for all eternity
3. At some point people realise they don’t want to own shares in a crap company and try and sell, doesn’t take a rocket scientist to realise the price will fall (a lot)
You completely missed the 4th scenario.
4. Those holding short positions (the big bad hedge funds) are forced to buy shares to cover their shorts from WSB punters at vastly increased prices. When the sell off occurs, it's the hedge funders who are left with the worthless stock. Hedge fund balance goes down, loads of individuals profit. A (small) redistribution of wealth occurs.
I don't see 4. playing out exactly like that, but that's the bet that a lot of people have made.
When the sell off occurs, it’s the hedge funders who are left with the worthless stock.
The hedge funders don't end up holding the stock, they simply buy it at whatever price and immediately hand it back to the person they borrowed it from when they opened the short position. They are either able to hang onto cash they were handed earlier (profit) or directly lose cash at the moment they buy back (failure).
The actual value of the company may be the traditional way of viewing this scenario, but it is fairly irrelevant right now - it's a guide to where the price will eventually end up, but the only thing that matters is how long that takes and the points it reaches along the way. The shares have almost ceased to represent the company and its product, they are suddenly a wholly separate commodity in their own market, which happen to be both in great demand and exceptionally scarce at the same time.
The only things that drive price right now are the urgency of the need for them by the HFs, and the willingness or otherwise of the herd of individuals and institutions holding the shares to release them.
Engage brain before opening mouth.
Could you perhaps apologise for that?
I'm sorry for that, the language was out of order.
Vince
I’d be very suprised if anything illegal has happened
MEGALOLZ
I just see a lot of people jumping on a get rick quick bandwagon buying stock in a crap company for 100s times over the odds. That, to me, is collective madness. The fact the market (who run the platforms which enable all this) want to stop this madness, is absolutely fine by me
It's not as simple as that though - this is NOT just a random pumped up stock. The key is massive amount of shorting the hedge funds did last year, they did that in the usual assumption they could drive the price down with a little help from the financial rags and put out the usual stories about it being doomed. Normally that would have worked, the stock would have collapsed and they'd have made billions (with the company likely failing and any other stock owners losing it all).
However this exposure got noticed and WSB big hitters bought enough stock to start the price rising and then GME got a new CEO that has a genuine chance of turning the business around (who also acquired a lot of the shares so has a vested interest in it not falling to the shorters).
That in itself still might not have been enough to trap the hedge funds in their own greed but add to that the millions of small investors that jumped in recently (hopefully buying what they can afford to lose...) and those investors holding so the hedge fund short ladder and other tactics failed means the hedge funds are now massively exposed - unless they find away to drive the price down today (and keep it down for future short position expirations) they are going to get hit hard.
It's also a virtuous circle for the small investors in that the hedge funds are forced to buy stock to offset the potential losses (this is the gamma squeeze) and, if things go to plan, is what will send the stock price through the roof - not the buying of small investors causing an artificial pump. This is absolutely key to the whole thing and anyone saying this is a plain pump and dump and the small investors are going to lose everything doesn't understand what's going on.
Could the plan backfire still? Yes, but only if the small investors lose their nerve before the gamma squeeze really kicks in. Otherwise it would take some illegal collusion on a massive scale to prevent it.
You completely missed the 4th scenario.
4. Those holding short positions (the big bad hedge funds) are forced to buy shares to cover their shorts from WSB punters at vastly increased prices. When the sell off occurs, it’s the hedge funders who are left with the worthless stock. Hedge fund balance goes down, loads of individuals profit. A (small) redistribution of wealth occurs.
I thought a lot of the HFs had already closed their positions, sure I read that in the FT.
Unless all the people on RH etc have detailed knowlegde of when each HF sells it's shares etc they could still end up owning a load with the HFs having exited and the price still rising.
It won't be as neat as the HFs close out buying out all the redditors, with the redditors walking away rich and victorious. Loads will arrive late to the party and end up paying 100x over the odds for a crap stock (buying it off another Redditor etc).
Could the plan backfire still? Yes, but only if the small investors lose their nerve before the gamma squeeze really kicks in. Otherwise it would take some illegal collusion on a massive scale to prevent it.
I guess we'll see what further fraudulent tricks the funds have up their sleeves. Their brazen market fixing yesterday caused a lot of instability but ultimately failed. Are they going to repeat that or try something else?
they could drive the price down with a little help from the financial rags and put out the usual stories about it being doomed. Normally that would have worked, the stock would have collapsed and they’d have made billions (with the company likely failing and any other stock owners losing it all).
This isn't Apple. The hedge funds select the weak to be victims. GME is a dying business. Is it so wrong that someone would put it out of its misery?
I thought a lot of the HFs had already closed their positions, sure I read that in the FT.
Less than clear. Just the raw quantity of stock selling doesn't entirely support this.
Someone more cynical than me might suggest that putting the word out to your friends on the financial channels that HFs had closed positions would be a good tactic, if you wanted to persuade small investors that the short squeeze had either already happened or was unlikely to materialise. 🙂
I thought a lot of the HFs had already closed their positions, sure I read that in the FT.
This is all from the reddit so take it as you will:
Citron have covered most of their shorts but not all. Melvin claimed to have covered them also, but the sales volume doesn't represent this. Its still shorted to 100%+ percent.
This isn’t Apple. The hedge funds select the weak to be victims. GME is a dying business. Is it so wrong that someone would put it out of its misery?
Yep, at some point they'll realise they're just fighting each other over a crap stock and the HFs will have moved on elsewhere.
This is all from the reddit so take it as you will:
Given that the whole pyramid relies on people selling to the next fool in line, it's in everyone's (who owns the stock) interest to say that the HFs are hurting and you need to buy more to deliver the fatal blow. It's an emotive and effective narative, who wouldn't want to be David vs Goliath - stick it to 'The Man' etc.
The Man has probably already walked away......
There are lots of different platforms, eg RobinHood, each has its own rules and with margin trading, where they lend you money, they have their own rules on controlling how you spend their moeny.
No one is forced to use a market of a platform
Again you're missing the real issue - it wasn't just RobinHood that prevented Buys, a lot of platforms did. A small investor absolutely relies on these platforms for this sort of stock dealing, otherwise you'd need a broker and a whole lot of other hassle.
I'm using eToro, they don't operate in the same way as RobinHood with all the margin reinvesting crap, it's traditional buying and selling. However they are still a middle man in that the trades they offer are still virtual until they pass them on to their own broker/liquidity provider to actually make the trades (or at least cover them).
I was pissed off yesterday when eToro blocked Buys mostly because I was enjoying making small gains playing the rollercoaster the GME stock price is at the moment. I wanted to do that to cover my initial $500 holding so I can afford to hold that indefinitely (or loose it all). I looked at some other platforms and they'd all stopped Buys to.
After reading a bit more into it I accept in reality it was likely more to do with the stock illiquidity/volatility meaning eToro was too exposed trying to pass on the trades (and their liquidity provider stopped accepted buys on them as they were too exposed as well) - as opposed to the hedge funds paying them off to do it. It's not as clear cut with RobinHood though, especially given their biggest client is Citadel who are one of the most exposed short sellers.
Yes. The US unemployment situation is dire right now, that would be another 14,000+ out of work just so the rich can get slightly richer. Don't be a ****.GME is a dying business. Is it so wrong that someone would put it out of its misery?
@FuzzyWuzzy I think you are right. Most of the platforms that 'banned' trading GME were actually just refusing credit in effect.
This isn’t Apple. The hedge funds select the weak to be victims. GME is a dying business. Is it so wrong that someone would put it out of its misery?
I think its morally wrong to short the stock at 140% artificially driving the price to the ground.
On the business case, well its one cycle to early. Specially with new consoles that have just come out.
The Man has probably already walked away
No, the man has got his corrupt mates to come and pin the other guy's arms behind his back so he can pummel him with impunity.
It stinks.
I think its morally wrong to short the stock at 140% artificially driving the price to the ground.
On the business case, well its one cycle to early. Specially with new consoles that have just come out.
Wouldn't that be naked shorting and illegal anyway. We've already ascertained that it's a highly regulated industry with nothing even remotely dodgy going on 😀
Wouldn’t that be naked shorting and illegal anyway. We’ve already ascertained that it’s a highly regulated industry with nothing even remotely dodgy going on 😀
Yeah. You are right, its a run by choir boys lol.
Yes. The US unemployment situation is dire right now, that would be another 14,000+ out of work just so the rich can get slightly richer. Don’t be a ****.
Shorting doesn't fold business, nor does it cause job losses.
It's part of the process of the market finding the correct value of a company.
Calling out a poorly performing business for being poorly performing is a service to the market.
Long term, badly run businesses often go on to fail, but that's because they're badly run; not because some evil HF shorted them.
Again you’re missing the real issue – it wasn’t just RobinHood that prevented Buys, a lot of platforms did. A small investor absolutely relies on these platforms for this sort of stock dealing, otherwise you’d need a broker and a whole lot of other hassle.
I can see why they'd want to - most of the popular platforms allow margin trading, so the platform is taking the risk rather than the client. In a collective madness crowd swarm such at GameStop, they will have their own risk levels above which they can't go as when it comes crashing down, they will be massively out of pocket.
Have they been collectively leant on, who knows, but if the Fed has had a word and said stop this madness, fair call - it is just madness. It's not in the long term intetest of the market as an efficient method of allocating capital etc.
If you've ended up owning over priced stock in a crap company all I can say is 'WTF were you thinking when you bought it?'.
GME is a dying business. Is it so wrong that someone would put it out of its misery?
Does messing around with the stock price cause the business to fail? I don't think so.
Surely the business fails when they run out of cash and/or credit? Stock trading is just other people paying each other for shares in a business. The fact GameSpot made huge losses for ages and weren't able to adapt to a new market is what would cause it to fail and cost jobs.
I think in all this we are missing something really, really important
.
I’m sorry for that, the language was out of order.
Vince
Someone on the internet has admitted they were in the wrong! Never seen that before, nice one Vince.
A low stock price makes it vulnerable to a predatory buyer.
Calling out a poorly performing business for being poorly performing is a service to the market.
Shorting has nothing to do with whether a company is performing poorly or not. It's all to do with what the price is now compared to the price you expect it to be.
I theory it's simply a case of looking at the data and comparing that to the current stock price to find stocks that are currently overpriced. In theory.
In practice it's about doing whatever you can get away with to drive down the price of a stock any way you can.
You have a much higher degree of trust in the current capitalist system than most people do, you realise that? Bordering on naive, I would say.
You have a much higher degree of trust in the current capitalist system than most people do, you realise that? Bordering on naive, I would say.
I do understand the angsty Millenial complaints about big finance, but otoh what is the formal demand? No shorting allowed? What rules are to be changed?
Does messing around with the stock price cause the business to fail? I don’t think so.
Surely the business fails when they run out of cash and/or credit? Stock trading is just other people paying each other for shares in a business. The fact GameSpot made huge losses for ages and weren’t able to adapt to a new market is what would cause it to fail and cost jobs.
Driving a stock to the ground can hurt consumer confidence. It can also deprive it from fund raising abilities such as issues of shares (since they are worth less). Also it ****s over actual shareholders. The icing on the cake is the 140% short on the float.
Don't allow the big players to continue trading any way they want while restricting small investors to selling only would be a good start.
If you want a full break down of what else needs to happen to regulate the financial markets then we might be here for a while.
No shorting allowed? What rules are to be changed?
You don't need to change any rules. I have a feeling that, in the relatively near future at least, hedge funds will have the possibility of this in their minds when they are tempted by aggressively shorting a stock.
It was only the ridiculous level of shorting by one single entity (based on greed and no likely consequences) that drew the attention of those who started this rolling on Reddit. I'm sure the sneaky bastards will find a way to be less obvious and disguise their exposure at some point.
The threat of regulation is pretty mild for these muppets, but the idea that there might actually be financial consequences is more potent.
I do understand the angsty Millenial complaints about big finance, but otoh what is the formal demand? No shorting allowed? What rules are to be changed?
You could start with how on earth a 140% short even came to be, after 2008 (in which they were bailed) you'd think this would be somewhat regulated. In addition, the characterisations you make are wrong, the millennials saw their parents (and friends and family members) get crushed by the 2008 bust(without any repercussions towards this recklessness), and a "cool" president, all but refuse to investigate.
Even Google has been drawn into the cluster ****!
https://interestingengineering.com/google-saves-robinhood-deletes-thousands-of-negative-reviews
Yet most of the retail-investors on Reddit are using leverage on their bets. Are we to ban leverage, or just when its the 'greedy hedge funds' using it?
You have a much higher degree of trust in the current capitalist system than most people do, you realise that? Bordering on naive, I would say.
It's not perfect, but it works reasonably well.
Until someone comes up with a better system, I'm happy to keep using it.
If you want to call that naive, by all means fill your boots.
Indeed, one gets the impression some people want the markets regulated by a totalitarian tribunal making arbitrary decisions on what investments are moral and what aren't!
Yet most of the retail-investors on Reddit are using leverage on their bets. Are we to ban leverage, or just when its the ‘greedy hedge funds’ using it?
HFs don't use margin trading, they bet their own / investors money.
Day trading apps aimed at retail investors (in the US at least) seem keen on margin trading, but it's probably not very healthy as it amplifies peaks and troughs. It allows you to buy with money you don't have and then they will automatically sell your stock when the price falls, so you have a gearing in both directions.
Add this to herd mentatility and an emotive story 'lets stick it to the evil HFs' etc and look what a mess you end up with...
Indeed, one gets the impression some people want the markets regulated by a totalitarian tribunal making arbitrary decisions on what investments are moral and what aren’t!
I think most people just want to see a fair system where the risks and opportunities are shared equally.
But you crack on with your hysteria if it makes you happy.
It’s not perfect, but it works reasonably well.
Until someone comes up with a better system, I’m happy to keep using it.
If you want to call that naive, by all means fill your boots.
Its not perfect, hence it can get some improvements, and punish excessive recklessness, when it may be the taxpayers that have to foot the bill.
Indeed, one gets the impression some people want the markets regulated by a totalitarian tribunal making arbitrary decisions on what investments are moral and what aren’t!
From where? Please point at a specific post.
HFs don’t use margin trading, they bet their own / investors money.
Please supply quote or reference on this?
You have a much higher degree of trust in the current capitalist system than most people do, you realise that? .
If I recall correctly footflaps has made some serious cash by some very adept investing in the SM over the years. ( And all credit to him for this) So it's no great surprise he has that trust.
Bordering on naive, I would say
No, see above. I don't think he is at all naive about it. He knows shit loads. But perhaps has a different opinion and viewpoint to you and me.
what is the formal demand? No shorting allowed? What rules are to be changed?
All people want is a level playing field. When the man in the street screws up and loses his shirt, he has to accept it. When the hedge funds and banks screw up, as in 2008 and now, they expect to be protected from their stupidity and bailed out, usually at the cost of the man in the street. It's corrupt, criminal, and indefensible.
No, see above. I don’t think he is at all naive about it. He knows shit loads. But perhaps has a different opinion and viewpoint to you and me.
You can be naive and quite financially astute.
For example, it's possible to buy very cheap goods and just think you are getting a good deal because you are naive. People who aren't naive realise that the reason they can get such cheap clothes is because they are produced by borderline slave labour.
On the other hand, you might know but just not care.
Footflaps might well be correct in that this is all going to blow up in the small investors faces and there never was any naked shorting but he has no way of knowing that yet. Guess we'll all find out over the next week or two.
Hedge Funds generally don't get bailed out with public money although private bailouts have been organized where there is systemic risk - LTCM being a well known example. An awful lot of hedge funds go bust, but this rarely get reported and indeed isn't fully taken into account in the published sector returns - hence the common accusation of survivorship bias in the figures.
The price is up 100% currently in pre-market trading, I hope the market opens like that and there's not a sudden drop before!
