# The $GME gamestonk thread



## mbardu

Did I miss another $GME thread?
I thought we'd have a fierce discussion considering how many boomers we have here 

Anyway, are you still (how??) short the stock?
Are you long in shares on the rocketship?
Are you pissed off to see the blatant media manipulation to blame "market disfunction" on a shit-posting subreddit while nobody bats an eye that hedge funds were (probably illegally) shorting 140% of the stock's float?

Anyway...




Discuss


----------



## Demiurge

I think I've read enough articles to have a fuzzy idea what shorting is. My confusion is that if shorting is making a bet on a stock eventually dropping in value- a practice these reddit investors despise- is a situation where a stock gets so blatantly pumped not an invitation for even more shorting attempts?


----------



## SpaceDock

Come on guys! Can’t we collectively drive up some crappy stock to make us all rich bastards overnight?


----------



## BenjaminW

TO THE MOON BABY!

I have very limited understanding of stocks, but WSB is a favorite of mine on Reddit.


----------



## Steinmetzify

'Guys that get rich doing this all the fucking time suddenly mad that someone else is doing this to get rich'

Fuck these guys, they made the rules and now they're pissed that someone else beat them at their own rules.

Interested to see if there are 'regulations' put in place to block this from happening again.

Also would like to see short selling made illegal.


----------



## Mathemagician

It’s a short squeeze on aggressive Hedge funds. It’s going to make a great case study.


----------



## jaxadam




----------



## StevenC

SpaceDock said:


> Come on guys! Can’t we collectively drive up some crappy stock to make us all rich bastards overnight?


We've been doing it with used Prestiges for years!


----------



## Steinmetzify

I wonder what the consequences of this will be. Think about it, online investors could do this on a daily with everything shorted out there and get rich as fuck.

Now you've got these guys out there having to sell their profitable stock so they can cover their shorts.

This could change the stock market forever.


----------



## mbardu

BenjaminW said:


> TO THE MOON BABY!
> 
> I have very limited understanding of stocks, but WSB is a favorite of mine on Reddit.



It's actually not that complex. 

Simple short selling is borrowing someone's stock to sell it now for a good price; because you think it's going to drop in value later. In your mind, you can buy it back cheap later once you have to give it back.

Shorting through selling call _options_ is allowing someone to buy 100 of the stock _from you_ later at a pre-agreed price, for a small fee. Also because you think the price will go down later, so you don't think the other party would actually go through with it since they can just buy lower on the market if the price has dropped. So you'd just keep the fee. 

In the first case, the shorts sold the share for let's say 12 bucks, and now are panicking because they have to buy it back at 200/300$, times millions of shares. 

In the second case, the options are coming due - so similarly the shorts will have no other option but to aquire stocks at the current asking price of 200/300 to deliver on their commitment to sell them for 12$.

What makes this unprecedented is that there was *140%* of all stocks that was shorted, and many investors, retail investors included, are refusing to budge and to sell_ at all,_ so by law of offer and demand, the price keeps climbing. 

Hedge funds are shitting bricks.


----------



## InfinityCollision

Demiurge said:


> I think I've read enough articles to have a fuzzy idea what shorting is. My confusion is that if shorting is making a bet on a stock eventually dropping in value- a practice these reddit investors despise- is a situation where a stock gets so blatantly pumped not an invitation for even more shorting attempts?


Very possible. Still notable that shorting funds lost billions on this, but the aftermath of this pump & dump likely won't be pretty either.


----------



## mbardu

Demiurge said:


> I think I've read enough articles to have a fuzzy idea what shorting is. My confusion is that if shorting is making a bet on a stock eventually dropping in value- a practice these reddit investors despise- is a situation where a stock gets so blatantly pumped not an invitation for even more shorting attempts?



Up to a point.
But you cannot short forever. Options expire and you have to deliver. Short positions with increasing underlying will create margin calls.
The only solution should be to sell, and that's what many have tried. But there comes a point where it will explosively backfire into even more stock appreciation. This is because more and more shorts in existence creates more and more shorts needing to exit their positions. The only way to exit a short is to buy. Buying makes the price go up.
That's a short squeeze, and this one will be for the history books.


----------



## Womb raider

I usually only trade blue chips and stay away from speculative stocks, but the playbook for this week was to buy anything and everything that is highly shorted and it worked magically well. NASDAQ CEO came out saying they will halt any stock with unusual social media chatter so I'm sure they'll figure out a way to keep the game rigged in favor of the elites.


----------



## BenjaminW

mbardu said:


> It's actually not that complex.
> 
> Simple short selling is borrowing someone's stock to sell it now for a good price; because you think it's going to drop in value later. In your mind, you can buy it back cheap later once you have to give it back.
> 
> Shorting through selling call _options_ is allowing someone to buy 100 of the stock _from you_ later at a pre-agreed price, for a small fee. Also because you think the price will go down later, so you don't think the other party would actually go through with it since they can just buy lower on the market if the price has dropped. So you'd just keep the fee.
> 
> In the first case, the shorts sold the share for let's say 12 bucks, and now are panicking because they have to buy it back at 200/300$, times millions of shares.
> 
> In the second case, the options are coming due - so similarly the shorts will have no other option but to aquire stocks at the current asking price of 200/300 to deliver on their commitment to sell them for 12$.
> 
> What makes this unprecedented is that there was *140%* of all stocks that was shorted, and many investors, retail investors included, are refusing to budge and to sell_ at all,_ so by law of offer and demand, the price keeps climbing.
> 
> Hedge funds are shitting bricks.


Oh I wasn’t expecting this but thanks for the explanation.

Fuck spending money on guitar gear it’s all about risky investments on Reddit!


----------



## Womb raider

mbardu said:


> Up to a point.
> But you cannot short forever. Options expire and you have to deliver. Short positions with increasing underlying will create margin calls.
> The only solution should be to sell, and that's what many have tried. But there comes a point where it will explosively backfire into even more stock appreciation. This is because more and more shorts in existence creates more and more shorts needing to exit their positions. The only way to exit a short is to buy. Buying makes the price go up.
> That's a short squeeze, and this one will be for the history books.


There was a lot of naked shorting going on here. That's how you get 140% short interest. Its the perfect storm of wsb pumping the price and shorts having a hard time allocating shares to cover that short which blew price through the roof.


----------



## mmr007

I don't have any Gamestop stock so too late for me to get in on that action but I have 6 gallons of drinking water (value $7.25 USD) in my fridge and since water is now a commodity that can be speculated and traded on on the stock market maybe I can use the internets to manipulate that into $6000 worth of water...get that ESP I've been wanting.


----------



## Xaios

mmr007 said:


> I don't have any Gamestop stock so too late for me to get in on that action but I have 6 gallons of drinking water (value $7.25 USD) in my fridge and since water is now a commodity that can be speculated and traded on on the stock market maybe I can use the internets to manipulate that into $6000 worth of water...get that ESP I've been wanting.


Before you commit, the real question you have to ask yourself is... are there any massive, bloated and wholly parasitic hedge funds out there currently shorting water?


----------



## spudmunkey




----------



## X1X

It's interesting to see how this develops. Discord banned wallstreetbets for "hatespeech". Now that's not transparent at all


----------



## possumkiller

So... when rich people game the system to rob everyone blind it's perfectly fine, but if poor people try it suddenly it's a problem?


----------



## Shoeless_jose




----------



## Musiscience

StevenC said:


> We've been doing it with used Prestiges for years!


Comment of the year for sure.


----------



## Emperor Guillotine

Robinhood just shut out GameStop, AMC, Nokia, Naked, Blackberry, and more. Go on the app and it'll say "this stock is not supported". No more options to buy or sell. Seems like Wall St. folks are reading online on Reddit and such. Any stock that is mentioned is getting blocked and delisted.


----------



## nightflameauto

It's funny how blatantly transparent Wall Street regulators and stock exchanges are being in supporting the elite fucks while hosing over the little dudes that were just playing the game the elites thought they had a lock on.

Sadly, the only legal ramifications I've heard is talk of blocking small players from ever being involved in shorted stocks "to protect them from losing their investments." Yeah, right. The legal system is meant to protect those at the top. It's about blocking small players from even entering the game. Pisses me off to no end, but it is what it is.


----------



## Necris

Wealth and power rallying to protect each other really isn't surprising, but I'll admit "the poors aren't allowed to trade these stocks anymore" is more of a bold move than I was expecting.

I guess now we can start the countdown, how long will it take between wealthy "elites" determining there is a "problem" and for legislation to be introduced which favors them.


----------



## mbardu

nightflameauto said:


> It's funny how blatantly transparent Wall Street regulators and stock exchanges are being in supporting the elite fucks while hosing over the little dudes that were just playing the game the elites thought they had a lock on.
> 
> Sadly, the only legal ramifications I've heard is talk of blocking small players from ever being involved in shorted stocks "to protect them from losing their investments." Yeah, right. The legal system is meant to protect those at the top. It's about blocking small players from even entering the game. Pisses me off to no end, but it is what it is.



Especially laughable considering that the small players here are doing the most basic operation there is (buy a stock and hold it...no complex strategy, no options...) and the argument is that this is "too sophisticated" for them, while the hedge funds illegally shorting 140% of float with other people's money are just dandy


----------



## X1X

Emperor Guillotine said:


> Robinhood just shut out GameStop, AMC, Nokia, Naked, Blackberry, and more. Go on the app and it'll say "this stock is not supported". No more options to buy or sell. Seems like Wall St. folks are reading online on Reddit and such. Any stock that is mentioned is getting blocked and delisted.



Somehow that sounds illegal.


----------



## jaxadam

nightflameauto said:


> It's funny how blatantly transparent Wall Street regulators and stock exchanges are being in supporting the elite fucks while hosing over the little dudes that were just playing the game the elites thought they had a lock on.
> 
> Sadly, the only legal ramifications I've heard is talk of blocking small players from ever being involved in shorted stocks "to protect them from losing their investments." Yeah, right. The legal system is meant to protect those at the top. It's about blocking small players from even entering the game. Pisses me off to no end, but it is what it is.





mbardu said:


> Especially laughable considering that the small players here are doing the most basic operation there is (buy a stock and hold it...no complex strategy, no options...) and the argument is that this is "too sophisticated" for them, while the hedge funds illegally shorting 140% of float with other people's money are just dandy



They could try to play the “accredited investor” card or see activity like this pushed to that requirement.


----------



## mbardu

X1X said:


> Somehow that sounds illegal.



It may be, but you gotta understand that RobinHood is in bed with Citadel, which in turn is in bed with Melvin Capital (the fund most impacted by Gamestop losses) - so even if illegal, it's certainly not surprising .



jaxadam said:


> They could try to play the “accredited investor” card or see activity like this pushed to that requirement.



That's the funny part for me because in this case "this activity" is just "buy a stock". How much more basic does it get.


----------



## jaxadam

mbardu said:


> It may be, but you gotta understand that RobinHood is in bed with Citadel, which in turn is in bed with Melvin Capital (the fund most impacted by Gamestop losses) - so even if illegal, it's certainly not surprising .
> 
> 
> 
> That's the funny part for me because in this case "this activity" is just "buy a stock". How much more basic does it get.



No I completely agree. I just wonder if they’ll classify a “mass social media stock frenzy” as undue risk and sophistication, relegating that activity as an accredited investor only activity.


----------



## mbardu

Emperor Guillotine said:


> Robinhood just shut out GameStop, AMC, Nokia, Naked, Blackberry, and more. Go on the app and it'll say "this stock is not supported". No more options to buy or sell. Seems like Wall St. folks are reading online on Reddit and such. Any stock that is mentioned is getting blocked and delisted.



Not delisted per se, but it's no longer possible to buy shares, only close. This is absolutely disgusting and blatant insider manipulation.
Citadel bankrolling RH and they don't want to lose the 3 Billion they injected into Melvin...so instead everyone on RobinHood loses.

*R I G G E D*


----------



## BenjaminW

mbardu said:


> Not delisted per se, but it's no longer possible to buy shares, only close. This is absolutely disgusting and blatant insider manipulation.
> Citadel bankrolling RH and they don't want to lose the 3 Billion they injected into Melvin...so instead everyone on RobinHood loses.
> 
> *R I G G E D*


Dude, fuck Robinhood. I was thinking about downloading it and creating an account so I could do stock stuff with my brother and our friends, and I wake up and see this shit.

Stay mad Wall Street I guess?


----------



## mbardu

BenjaminW said:


> Dude, fuck Robinhood. I was thinking about downloading it and creating an account so I could do stock stuff with my brother and our friends, and I wake up and see this shit.
> 
> Stay mad Wall Street I guess?



Oh yeah big big *FU *to robinhood.
As we speak, other brokers are joining in on the fun too, and restricting GME buying however they can (from altogether banning, to changing margin requirements, to just "glitching") - while (call me conspirational) reddit is so glitchy it might as well be under DDOS.

You can literally see that right now, nobody is able to buy the stock, while big players are selling to each other in huge lots to mechanically kill the price...and it's working.

This is disgusting.


----------



## budda

Yikes.


----------



## BenjaminW

According to WallStreetBets, they're preparing a class action lawsuit against Robinhood.


----------



## mbardu

BenjaminW said:


> According to WallStreetBets, they're preparing a class action lawsuit against Robinhood.



Obviously not going to happen because of _reasons_, but RobinHood/Citadel/Melvin would deserve to burn over this.


----------



## fantom

Looking around online, I see the hedge funds are losing $2-3 billion over this. Why do I have a feeling that the owner of Melvin Capital is going to run as a Republican for president in four years boasting financial success as a strength?

And good for redditers. They have every right to buy stock in whatever failing company they want the fact that professionals not only feel for this crap, but buried themselves so far into it, shows why "wealt management" professionals are just a scam to tax you on your saving. I hope the government takes actions on apps preventing people from buying stock, as that seems very much like insider trading to me.


----------



## fantom

mbardu said:


> It's actually not that complex.
> 
> Simple short selling is borrowing someone's stock to sell it now for a good price; because you think it's going to drop in value later. In your mind, you can buy it back cheap later once you have to give it back.
> 
> Shorting through selling call _options_ is allowing someone to buy 100 of the stock _from you_ later at a pre-agreed price, for a small fee. Also because you think the price will go down later, so you don't think the other party would actually go through with it since they can just buy lower on the market if the price has dropped. So you'd just keep the fee.
> 
> In the first case, the shorts sold the share for let's say 12 bucks, and now are panicking because they have to buy it back at 200/300$, times millions of shares.
> 
> In the second case, the options are coming due - so similarly the shorts will have no other option but to aquire stocks at the current asking price of 200/300 to deliver on their commitment to sell them for 12$.
> 
> What makes this unprecedented is that there was *140%* of all stocks that was shorted, and many investors, retail investors included, are refusing to budge and to sell_ at all,_ so by law of offer and demand, the price keeps climbing.
> 
> Hedge funds are shitting bricks.



I have read several news articles and finance sites to try to understand what was going on over the last week or two, and it still wasn't making sense. Your explanation is super clear and made it click. Just want to say this post is excellent and you conveyed the message really clear.


----------



## DeathbyDesign

It is amazing the lengths that these people will go to screw over common people doing the same thing they on a daily basis and get away with it. I hope that any lawsuits brought against these companies participating in this goes forward but I know that they will get squashed. I bet our government will act quickly and put new laws in place to ensure Wall Street is protected from something like this in the future. This situation shows the wealthy really don't like the new kids playing in their sandbox and using their toys against them.


----------



## LordCashew

possumkiller said:


> When rich people game the system to rob everyone blind it's perfectly fine, but if poor people try it suddenly it's a problem


This is basically an axiom of human civilization throughout history. Very well said.


----------



## mbardu

Class action now filed against RobinHood:

https://twitter.com/LJMoynihan/status/1354836830169006081


----------



## chinnybob

So a few things:

Important to distinguish between naked and covered shorts. Naked short sells are where you sell a security you don't have without any agreement in place to make sure you do have it when it comes time to deliver, and these are generally restricted under financial regulations (reg SHO in the US). A covered short is when you have a reasonable belief that when it comes time to deliver the stock you will have it (e.g. you have bought a call option on the stock which expires in time).
For those saying the WSB community are entitled to buy and sell as they please and shouldn't be shut out, that's not entirely true. It's interesting here because it's many individuals rather than one person but what WSB is doing is arguably what you'd call an "abusive squeeze". That's where you take a dominant position in a stock in order to affect the price to the detriment of others, and it's considered market abuse. In other words buying up as much stock as possible in order to make the hedge funds with big short positions lose money is naughty.
The timing of Robinhood and other brokers restricting trading seems pretty shady but in normal circumstances it's absolutely something they are allowed to do. All brokers big and small will have "circuit breakers" in place that trigger during periods of volatility. One reason for this is that if prices are jumping around they are at risk of losing money if prices move against them before they can execute orders in the market. For example if I place an order to buy a stock at 10, but by the time broker manages to buy it in the market it costs 20, they lose 10 on that trade. This is even more of a risk for brokers that don't charge commission or transaction costs.
My own two cents: the SEC should have stepped in sooner to restrict all trading in Gamestop rather than letting it get this far. It's interesting though because regulation of social media from a financial conduct perspective is a very new topic so this is uncharted waters for the regulator. Unfortunately a lot of people will lose a lot of money, and not just the hedge funds. If we assume that the current price of GME is artificially high (not much of a stretch) then you'd expect a market correction at some point and then it's a game of old maid...


----------



## mbardu

chinnybob said:


> So a few things:
> 
> Important to distinguish between naked and covered shorts. Naked short sells are where you sell a security you don't have without any agreement in place to make sure you do have it when it comes time to deliver, and these are generally restricted under financial regulations (reg SHO in the US). A covered short is when you have a reasonable belief that when it comes time to deliver the stock you will have it (e.g. you have bought a call option on the stock which expires in time).
> For those saying the WSB community are entitled to buy and sell as they please and shouldn't be shut out, that's not entirely true. It's interesting here because it's many individuals rather than one person but what WSB is doing is arguably what you'd call an "abusive squeeze". That's where you take a dominant position in a stock in order to affect the price to the detriment of others, and it's considered market abuse. In other words buying up as much stock as possible in order to make the hedge funds with big short positions lose money is naughty.
> The timing of Robinhood and other brokers restricting trading seems pretty shady but in normal circumstances it's absolutely something they are allowed to do. All brokers big and small will have "circuit breakers" in place that trigger during periods of volatility. One reason for this is that if prices are jumping around they are at risk of losing money if prices move against them before they can execute orders in the market. For example if I place an order to buy a stock at 10, but by the time broker manages to buy it in the market it costs 20, they lose 10 on that trade. This is even more of a risk for brokers that don't charge commission or transaction costs.
> My own two cents: the SEC should have stepped in sooner to restrict all trading in Gamestop rather than letting it get this far. It's interesting though because regulation of social media from a financial conduct perspective is a very new topic so this is uncharted waters for the regulator. Unfortunately a lot of people will lose a lot of money, and not just the hedge funds. If we assume that the current price of GME is artificially high (not much of a stretch) then you'd expect a market correction at some point and then it's a game of old maid...



A lot of the things you say are "technically" true, but most of the uproar is about how selectively the rules are applied and the blatant hypocrisy/unfairness of the market participants.

Let's start from the end. The SEC should have stepped in...maybe. But not because of WSB trading. They should have stepped in way earlier...say for example to not allow a stock to be shorted at 140% of float? But nobody cares when it's a fund doing it (most likely illegally). Doesn't "excuse" an "abusive squeeze", but it's clearly not WSB creating the problem here. 

R I G G E D

Yes brokers have breakers in place, and restricting securities is far from unheard of. But RH and others stopping buys, then letting Citadel and Melvin reload shorts, then letting them have fun with their downward sell ladder, then liquidating the RH users' longs at ~120 because of "extreme volatility" (and _before _the stock shoots back up to 250)..... Jesus, that's a whole other level of fucked up. Some people deserve to go to jail over this.


----------



## philkilla

The shit is out of control right now.


----------



## Drew

mbardu said:


> Yes brokers have breakers in place, and restricting securities is far from unheard of. But RH and others stopping buys, then letting Citadel and Melvin reload shorts, then letting them have fun with their downward sell ladder, then liquidating the RH users' longs at ~120 because of "extreme volatility" (and _before _the stock shoots back up to 250)..... Jesus, that's a whole other level of fucked up. Some people deserve to go to jail over this.



Eh, from my perspective, this looks a lot more like Robinhood protecting their users.

GME is trading just under $240 right now. Anyone buying GME today is doing so either believing that they can sell it for more than $240, or buying it not giving a shit that they're going to lose a lot of money. This was a stock that, pre-pandemic, was worth $15, was worth $10 at Thanksgiving, and before this year never closed higher than $63.30 (in 2007). There's no fundamental reason to believe it' worth any more than that today, aside from the artificial increase in demand r/wsb has created.

Boring technical stuff:
Nothing wrong with profiting from a short squeeze. But, considering yesterday alone total volume exceeded GME's current market cap, comfortably, and considering the massive margin calls that would come from being short a $10 stock that jumped to $400 in a span of days, I tend to believe the reports that most of these shorts are long covered - there certainly were no shortage of available shares in the market, and the trade size was too low - FINRA reported the highest volume, $6.7b in transactions, with an average transaction size (in shares) of 216 and a standard deviation of 30.5. That's not an institutional sized order book, particularly the standard deviation - Looking at AAPL for the same period, the stock saw about double the volume, about double the average trade size, and a far smaller standard deviation of 1.62. FINRA doesn't publish disaggregated volume data, but with a standard deviation that high that pretty much means that orders must be skewed to the smaller side, and that yesterday's drunken-toddler price action was driven not by a small numbner of large institutional trades, but a huge number of small retail ones.


My only issue with what Robinhood and a few other retail platforms are doing is they're giving r/wsb a perfect scapegoat. The price of GME continuing to rise depends on more people continuing to buy at ever higher prices, so while the intent was to hurt hedge funds, there was going to come a point, one way or another, where a huge number of retail investors who had bought in at extremely inflated prices were going to lose their shirts too. Now, r/wsb can say - with no justification, but to an audience who was primed to hate wall street anyway - that the only reason GME's price fell was _because_ Robinhood et all tried to clamp down on speculative buying, and not because r/wsb was depending on a ton of people engaging in speculative buying to pump up the price in the first place to ludicrous levels.


----------



## mbardu

Drew said:


> GME is trading just under $240 right now. Anyone buying GME today is doing so either believing that they can sell it for more than $240, or buying it not giving a shit that they're going to lose a lot of money. This was a stock that, pre-pandemic, was worth $15, was worth $10 at Thanksgiving, and before this year never closed higher than $63.30 (in 2007). There's no fundamental reason to believe it' worth any more than that today, aside from the artificial increase in demand r/wsb has created.



That part is all entirely true of course.
There's no fundamental reason for GME to be a 500$ stock, not even a 50$ one.
There's not a single person arguing GME is worth that.

But again, you're pointing fingers at WSB and RH, whereas the fundamental problem is allowing people to short 140% of the float in the first place.
There was no reason for that to happen, that's even more unprecedented than a meme stock being hyped to 20 times its value, and yet people are trying to squarely put the blame on WSB like they were wrong to try and benefit from the opportunity. The people who shorted that much were wrong, and should lose $$ in the process. Yet because of those practices, they'll still end up making money on the back of smaller fishes. Hence: R I G G E D


----------



## Drew

mbardu said:


> That part is all entirely true of course.
> There's no fundamental reason for GME to be a 500$ stock, not even a 50$ one.
> There's not a single person arguing GME is worth that.
> 
> But again, you're pointing fingers at WSB and RH, whereas the fundamental problem is allowing people to short 140% of the float in the first place.
> There was no reason for that to happen, that's even more unprecedented than a meme stock being hyped to 20 times its value, and yet people are trying to squarely put the blame on WSB like they were wrong to try and benefit from the opportunity. The people who shorted that much were wrong, and should lose $$ in the process. Yet because of those practices, they'll still end up making money on the back of smaller fishes. Hence: R I G G E D


Ok, but imagine for a moment a world where Robinhood DOESN'T restrict buying.

The price keeps going up and up until all shorts are covered. I suspect b $400 that had already happened, but, let's say it's $500, or even $600. If it's not shorts buying to cover at those prices, then by elimination (especially with the amount of publicity going on here), it's retail investors buying at $500 and $600 to get the price high enough to force them to cover. For the price to get that high, demand to buy has to be wildly in excess of demand to sell, so if $600 is the breaking point for someone short, but $550 isn't, then the people buying at $550 were retail investors and not short sellers, and would be very unlikely to turn around and sell a $550 stock for $600, if they were getting in on the action that late in the game on a stock that a few weeks ago hadn't broken $20.

So, in this hypothetical world where Robinhood doesn't restrict new purchases, then the price is driven up to let's say $600 by retail investors, and when the last short covers and retail interest eventually peters out, the share price _plummets_, and those retail investors - guys like you who just wanted to get in on the fun, and bought $550 shares of stock in a near-bankruptcy company that they can now only sell for $10 - have just lost $540 a share times however many shares at the expense of other day traders trying to force a short squeeze to make money of their own.

As you put it, R I G G E D.


----------



## mbardu

Drew said:


> Boring technical stuff:
> Nothing wrong with profiting from a short squeeze. But, considering yesterday alone total volume exceeded GME's current market cap, comfortably, and considering the massive margin calls that would come from being short a $10 stock that jumped to $400 in a span of days, I tend to believe the reports that most of these shorts are long covered - there certainly were no shortage of available shares in the market, and the trade size was too low - FINRA reported the highest volume, $6.7b in transactions, with an average transaction size (in shares) of 216 and a standard deviation of 30.5. That's not an institutional sized order book, particularly the standard deviation - Looking at AAPL for the same period, the stock saw about double the volume, about double the average trade size, and a far smaller standard deviation of 1.62. FINRA doesn't publish disaggregated volume data, but with a standard deviation that high that pretty much means that orders must be skewed to the smaller side, and that yesterday's drunken-toddler price action was driven not by a small numbner of large institutional trades, but a huge number of small retail ones.



Not sure what you're trying to say here. Notwithstanding the fact that APPL volume itself is a bit skewed with a combination of funds deleveraging and earnings, it is indeed small orders driving GME price up. That's the whole point. Small "organic" WSB-like orders vs coordinated sell ladders and barriers to trade from big players. That's exactly the part that's rigged.

As far as I'm aware, there was not enough volume for shorts to really deleverage. I am highly skeptical that melvin is totally out. 
We're still way above 100% short of the float. Expiration for a number of ITM calls including everything between 100 and 250 is still very much on the table.
So I'm not surprised about the coordinated attack that's happening on longs. But I've hardly ever seen it so blatantly rigged.


----------



## Drew

mbardu said:


> Yes brokers have breakers in place, and restricting securities is far from unheard of. But RH and others stopping buys, then letting Citadel and Melvin reload shorts, then letting them have fun with their downward sell ladder, then liquidating the RH users' longs at ~120 because of "extreme volatility" (and _before _the stock shoots back up to 250)..... Jesus, that's a whole other level of fucked up. Some people deserve to go to jail over this.



Been talking about this with another buddy who has some friends in on this action - he's telling me all the reports of this he's seen so far are on margin accounts, and not cash accounts. 

I've never seen Robinhood's margin agreement, but a fairly standard agreement of margin accounts is while normally price declines will result in margin calls, the brokerage DOES reserve the right to sell margined securities out of your account to limit losses, since if your account value goes far enough below zero and if you can't deposit enough cash to return it to zero, that become's the brokerage platform's problem. If this is indeed all selling of shares bought on margin, then yeah, it's unusual but any margin agreement gives the firm extending you credit the ability to sell securities you've bought with that credit, to pay them back.


----------



## mbardu

Drew said:


> Ok, but imagine for a moment a world where Robinhood DOESN'T restrict buying.
> 
> The price keeps going up and up until all shorts are covered. I suspect b $400 that had already happened, but, let's say it's $500, or even $600. If it's not shorts buying to cover at those prices, then by elimination (especially with the amount of publicity going on here), it's retail investors buying at $500 and $600 to get the price high enough to force them to cover. For the price to get that high, demand to buy has to be wildly in excess of demand to sell, so if $600 is the breaking point for someone short, but $550 isn't, then the people buying at $550 were retail investors and not short sellers, and would be very unlikely to turn around and sell a $550 stock for $600, if they were getting in on the action that late in the game on a stock that a few weeks ago hadn't broken $20.
> 
> So, in this hypothetical world where Robinhood doesn't restrict new purchases, then the price is driven up to let's say $600 by retail investors, and when the last short covers and retail interest eventually peters out, the share price _plummets_, and those retail investors - guys like you who just wanted to get in on the fun, and bought $550 shares of stock in a near-bankruptcy company that they can now only sell for $10 - have just lost $540 a share times however many shares at the expense of other day traders trying to force a short squeeze to make money of their own.
> 
> As you put it, R I G G E D.



I'm not invested in GME so I'm not a "guy like me" 

However, I'm pretty skeptical about your position. How are you able to say that shorts are covered already? There's still over 100% (probably 120%) of the float short even today at least as far as I'm aware. This costs everyday in margin, borrowing costs, not to mention option expiry tomorrow. Melvin already had to take a 3B bailout when the stock was not even at 100. So there is still huge incentive from hedges and MMs to push the price down ASAP (and I'm convinced that's what we are seeing), because one way or another, they will have to buy.

Of course the stock will plummet to 15$ _one day_, nobody debated that so the 500/550/600 example is a bit moot.
But you're speaking like there are no more shorts left in the market, whereas it's quite the opposite.

I'd buy the argument if the shorts % were already down to a realistic amount, but we're nowhere near that. You said it yourself...we haven't seen near enough the volume that would indicate large institutional moves such as massive covering.


----------



## Drew

mbardu said:


> Not sure what you're trying to say here. Notwithstanding the fact that APPL volume itself is a bit skewed with a combination of funds deleveraging and earnings, it is indeed small orders driving GME price up. That's the whole point. Small "organic" WSB-like orders vs coordinated sell ladders and barriers to trade from big players. That's exactly the part that's rigged.
> 
> As far as I'm aware, there was not enough volume for shorts to really deleverage. I am highly skeptical that melvin is totally out.
> We're still way above 100% short of the float. Expiration for a number of ITM calls including everything between 100 and 250 is still very much on the table.
> So I'm not surprised about the coordinated attack that's happening on longs. But I've hardly ever seen it so blatantly rigged.


So, standard deviation is a statistical measure of the width of the "tails" of a normal distribution. If the average trade size is 200 shares and the standard deviation is 30, then that means that roughly 65% of trades are inside 230 shares and 170, 90% are within 260 and 140, 95% are within 290-110, 99.5% within 310 and 80, etc. That's a pretty huge band, whereas in comparison AAPL has an average trade of 400 shares and a standard deviation of 1.5, then a four-standard deviation, 99.5% confidence interval would be trades within 406 and 394. The assumption here is that this is a normal distribution, which it of course isn't - I wish they reported skewness (the measure of whether high outliers are more likely than low outliers) or kurtosis (how "fat" the tails are, meaning how much more likely you are to find an observation in either tail than you are in the predicted range) but my guess here just given the huge standard deviation, and the fact tens to hundreds od thousands of eretail investors are bragging about trading GME, is that the distribution both has significant positive excess kurtosis, meaning fat tail observations are far more likely than in a normal distribution, and is extremely negatively skewed, meaning almost all of the outlier observations are small. 

So, first technical observation - the vast majority of trading activity appears to be small retail-sized trades rather than large institutional trades. 

The second, is that with nearly 180 million shares trading on wednesday alone, at around $350 a share, on wednesday $63 billion in GME was traded. The company's market cap is less than $17 billion, and there are just under 70 million shares outstanding. 

Short interest isn't reported in real time - this is worth a read, but what we know now as short interest would have been as of 1/15 settment, and is updated twice a month. With volume more than double market cap and short interest around 120% of market cap, on Wednesday alone enough shares changed hands to have covered short interest about one and a half times, in a single day.


----------



## mbardu

Drew said:


> I've never seen Robinhood's margin agreement, but a fairly standard agreement of margin accounts is while normally price declines will result in margin calls, the brokerage DOES reserve the right to sell margined securities out of your account to limit losses, since if your account value goes far enough below zero and if you can't deposit enough cash to return it to zero, that become's the brokerage platform's problem. If this is indeed all selling of shares bought on margin, then yeah, it's unusual but any margin agreement gives the firm extending you credit the ability to sell securities you've bought with that credit, to pay them back.



Like the fact that securities can sometimes become restricted/halted, this is also common knowledge.
Of course in the margin agreement you will accept that the broker can liquidate under certain conditions.

But just like halts are usually, and in principle reserved for things like new material information on a stock, a merger announcement or whatever (not coordinated halts to allow your buddies to launch sell ladders), this type of liquidation is also supposed to be used in good faith...not to relieve the pressure on shorts to cover for less before the stock shoots back to twice the price.

Everything you're saying is technically true. just extremely one-sided. Rigged in other words


----------



## Drew

mbardu said:


> I'm not invested in GME so I'm not a "guy like me"
> 
> However, I'm pretty skeptical about your position. How are you able to say that shorts are covered already? There's still over 100% (probably 120%) of the float short even today at least as far as I'm aware. This costs everyday in margin, borrowing costs, not to mention option expiry tomorrow. Melvin already had to take a 3B bailout when the stock was not even at 100. So there is still huge incentive from hedges and MMs to push the price down ASAP (and I'm convinced that's what we are seeing), because one way or another, they will have to buy.
> 
> Of course the stock will plummet to 15$ _one day_, nobody debated that so the 500/550/600 example is a bit moot.
> But you're speaking like there are no more shorts left in the market, whereas it's quite the opposite.
> 
> I'd buy the argument if the shorts % were already down to a realistic amount, but we're nowhere near that. You said it yourself...we haven't seen near enough the volume that would indicate large institutional moves such as massive covering.



I didn't say you, I said _like_ you. 

Read my follow-up post. FINRA collects data on short positions twice monthly, the last reporting date was 1/15, the next is tomorrow, and will be published in early February. On 1/15, GME closed at $35.50. Anyone who's covered since, published short interest data won't be available until Feb 9th. 

Meanwhile, my let's call it a hypothesis, that shorts are covered at this point is coming from two, maybe three, things - one, that yesterday alone enough shares traded hands to fully cover short interest, plus some, two, that Melvin has released a statement saying they've covered their position, and three, that had they NOT covered their position, they'd be facing massive margin calls and there'd be a lot more talk about them liquidating other positions in the financial press. 

And if you bought at $550 and then the stock plummeted, I don't think you'd call it a moot example at all.


----------



## mbardu

Drew said:


> I didn't say you, I said _like_ you.
> 
> Read my follow-up post. FINRA collects data on short positions twice monthly, the last reporting date was 1/15, the next is tomorrow, and will be published in early February. On 1/15, GME closed at $35.50. Anyone who's covered since, published short interest data won't be available until Feb 9th.
> 
> Meanwhile, my let's call it a hypothesis, that shorts are covered at this point is coming from two, maybe three, things - one, that yesterday alone enough shares traded hands to fully cover short interest, plus some, two, that Melvin has released a statement saying they've covered their position, and three, that had they NOT covered their position, they'd be facing massive margin calls and there'd be a lot more talk about them liquidating other positions in the financial press.
> 
> And if you bought at $550 and then the stock plummeted, I don't think you'd call it a moot example at all.



I don't understand your point.
You are contradicting yourself, because (patronizing aside, I know what a standard deviation is...) you are saying the shorts are covered, while at the same time showing that most of the activity is small retail-size rather than institution-size. Yet it's precisely institution-size flow that you would have expected to see in order to see actual significant covering. So which is it?


----------



## Drew

mbardu said:


> Like the fact that securities can sometimes become restricted/halted, this is also common knowledge.
> Of course in the margin agreement you will accept that the broker can liquidate under certain conditions.
> 
> But just like halts are usually, and in principle reserved for things like new material information on a stock, a merger announcement or whatever (not coordinated halts to allow your buddies to launch sell ladders), this type of liquidation is also supposed to be used in good faith...not to relieve the pressure on shorts to cover for less before the stock shoots back to twice the price.
> 
> Everything you're saying is technically true. just extremely one-sided. Rigged in other words


Nah, I mean, in some way, I get your reluctance here - you're still seeing GME being reported as having heavy short interest, and if I was sure that there were millions of shares short in the market, I wouldn't believe me, either. 

But, look at this, particularly the date next to the reported short interest. 
https://www.marketwatch.com/investing/stock/gme

Dated 1/15, back when the share price was about $35. 

And market limit up/limit down "circuit breaker" are automated - they're triggered not by news, but by large jumps in the price of a security. Occasionally they shut entire exhanges down - there were a whole bunch of limit down, and then limit up, breaks based on the movement of the S&P500 in the early days of the pandemic, as the market collapsed, and then recovered.


----------



## Drew

mbardu said:


> I don't understand your point.
> You are contradicting yourself, because (patronizing aside, I know what a standard deviation is...) you are saying the shorts are covered, while at the same time showing that most of the activity is small retail-size rather than institution-size. Yet it's precisely institution-size flow that you would have expected to see in order to see actual significant covering. So which is it?


Hey, this is a guitar forum, I don't take anything for granted. There was a time were I'd have been grateful for that explanation. 

I think the short positions have probably been long covered. I think the last couple day's price action has been driven by retail investors, and what info we can gleam from reported trades, while not suggesting there were _no_ institutional trades placed, provides strong evidence that there were a ton of retail trades, and considering this was a period of massive volume for this name (and because there's a whole subreddit of retail traders bragging about this) that it's a pretty reasonable conclusion to say that most of the excess volume, responsible for a massive price increase, was probably retail, not institutional.


----------



## budda

I like to think people buying in at $500 know they're going to lose $525, but I have no idea


----------



## BenjaminW

https://www.reddit.com/r/wallstreetbets/comments/l70vmz/if_i_can_hold_at_10mm_then_you_can_hold_too/

Pure gold.


----------



## Drew

budda said:


> I like to think people buying in at $500 know they're going to lose $525, but I have no idea


What are you talking about, stock prices always go up!  

If people buying shares at $500/share are expecting to lose virtually all of their money, I suggest just getting five hundred dollar bills and lighting them on fire, and posting it on Tiktok or something. It'll probably be a lot more fun for all parties involved.


----------



## mbardu

Drew said:


> Hey, this is a guitar forum, I don't take anything for granted. There was a time were I'd have been grateful for that explanation.
> 
> I think the short positions have probably been long covered. I think the last couple day's price action has been driven by retail investors, and what info we can gleam from reported trades, while not suggesting there were _no_ institutional trades placed, provides strong evidence that there were a ton of retail trades, and considering this was a period of massive volume for this name (and because there's a whole subreddit of retail traders bragging about this) that it's a pretty reasonable conclusion to say that most of the excess volume, responsible for a massive price increase, was probably retail, not institutional.



OK I may understand where you're coming from then.
If I understand correctly, you're saying that the shorts covered at 35/45 10 days ago and only retail has been buying since? Have you seen order sizes in that period that would support that? Not sure this would line up with the Citron panic and media blitz, but OK.
Under that hypothesis, then you could say the action is totally organic and "reasonable" I guess 

I don't buy it but I guess we'll see!


----------



## fantom

Saw this coming...

https://www.vice.com/en/article/7k9mw9/robinhood-gamestop-class-action-lawsuit

There is some irony of "robinhood" stealing from the poor to give to the rich.

edit: my page just refreshed and I see this was posted already. Oops


----------



## Drew

mbardu said:


> OK I may understand where you're coming from then.
> If I understand correctly, you're saying that the shorts covered at 35/45 10 days ago and only retail has been buying since? Have you seen order sizes in that period that would support that? Not sure this would line up with the Citron panic and media blitz, but OK.
> Under that hypothesis, then you could say the action is totally organic and "reasonable" I guess
> 
> I don't buy it but I guess we'll see!


Basically, with a few caveats. But, the next settle date for a reporting period is tomorrow, and we'll see what the short interest is as of tomorrow by the 9th. It's not impossible that some people have put on _new_ shorts by then - shit, I'd be tempted to short it myself - but if I was a hedge fund manager and had just had significant losses betting against GME and aggainst a subredit, and then went to whoever oversaw my risk budget and pitched putting a new short up, I think I'd need something a fair amount stronger than "this time will be different!" 

But, basically -

1) The last time we knew the short interest in GME for _sure_ was 1/15, when it was around 120%
2) the price of GME had increased more than 115% between then and _Monday's_ close
3) Shorts would have taken it on the chin between then and Monday, and it more than doubled again between Monday and Tuesday. There was a compelling case to cover just to limit further losses by Monday, much less Tuesday.
3) a) - lots of firms have already publicly said that's just what they did, and I have no particular reason not to believe them.
4) If somehow anyone hadn't already covered their short position on Tuesday, on wednesday when the share position more than doubled _again_, enough shares traded so that all of the reported short positions on 1/15 could have been covered, one and a half times over.
5) Based on summary population statistics provided by FINRA for Wednesday's trading, it looks a lot like an extremely abnormal amount of trades, on an abnormal volume day, were retail-sized trades
5). a) r/wsb _said_ they were placing an extremely abnormal amount of retail-sized trades on this day, and I have no special reason not to believe them either.

All in, it's a picture that while I can't _prove_ anything, it makes a pretty strong case that most/all of the short positions that existed on 1/15 have already been covered, and what's pushing the price up isn't institutional demand looking to cover short positions, but retail demand looking to, well, either "attack wall street," profit from a momentum trade, get into the rocketship and have some fun, or, well, I don't even pretend to understand what's going on here, lol.

But, of course, that gets back to my original point - Robinhood closing new purchases looks shady as fuck if you have good reason to believe that there's still huge short interest out there and new purchases would contribute to the short squeeze, pushing the price up. Robinhood closing new purchases suddenly looks pretty sensible and protective of their user base, however, if you have good reason to believe that the shorts have cut and run, and the price increase is almost entirely driven by fevered retail buying and momentum-following, as in that case it's _extremely _likely that anyone buying today is going to lose most of their purchase price.


----------



## mbardu

Drew said:


> Basically, with a few caveats. But, the next settle date for a reporting period is tomorrow, and we'll see what the short interest is as of tomorrow by the 9th. It's not impossible that some people have put on _new_ shorts by then - shit, I'd be tempted to short it myself - but if I was a hedge fund manager and had just had significant losses betting against GME and aggainst a subredit, and then went to whoever oversaw my risk budget and pitched putting a new short up, I think I'd need something a fair amount stronger than "this time will be different!"
> 
> But, basically -
> 
> 1) The last time we knew the short interest in GME for _sure_ was 1/15, when it was around 120%
> 2) the price of GME had increased more than 115% between then and _Monday's_ close
> 3) Shorts would have taken it on the chin between then and Monday, and it more than doubled again between Monday and Tuesday. There was a compelling case to cover just to limit further losses by Monday, much less Tuesday.
> 3) a) - lots of firms have already publicly said that's just what they did, and I have no particular reason not to believe them.
> 4) If somehow anyone hadn't already covered their short position on Tuesday, on wednesday when the share position more than doubled _again_, enough shares traded so that all of the reported short positions on 1/15 could have been covered, one and a half times over.
> 5) Based on summary population statistics provided by FINRA for Wednesday's trading, it looks a lot like an extremely abnormal amount of trades, on an abnormal volume day, were retail-sized trades
> 5). a) r/wsb _said_ they were placing an extremely abnormal amount of retail-sized trades on this day, and I have no special reason not to believe them either.
> 
> All in, it's a picture that while I can't _prove_ anything, it makes a pretty strong case that most/all of the short positions that existed on 1/15 have already been covered, and what's pushing the price up isn't institutional demand looking to cover short positions, but retail demand looking to, well, either "attack wall street," profit from a momentum trade, get into the rocketship and have some fun, or, well, I don't even pretend to understand what's going on here, lol.
> 
> But, of course, that gets back to my original point - Robinhood closing new purchases looks shady as fuck if you have good reason to believe that there's still huge short interest out there and new purchases would contribute to the short squeeze, pushing the price up. Robinhood closing new purchases suddenly looks pretty sensible and protective of their user base, however, if you have good reason to believe that the shorts have cut and run, and the price increase is almost entirely driven by fevered retail buying and momentum-following, as in that case it's _extremely _likely that anyone buying today is going to lose most of their purchase price.



Fair points.
Not sure of reliability, but I guess something like Ortex could give us a proxy without having to wait for the 9th for actual updated short data?
And although it does show a significant drop in terms of days-to-cover (showing below 2 currently, down from 6), that could be explained by the crazy volume - and that's still with almost 100% of shorts.

You also seem to 100% believe that aggressive funds would cower under the pressure and fold to cover their shorts instead of doubling down.
I guess that would be the logical thing to do...but we've seen time and time again that it's not always what happens.
Instead, even some pros sometimes average down and leverage up against all odds and end up losing it all.
Isn't Melvin like 20 employees too? I'd be curious to see what their risk function looks like, but looking at their size and style, I wouldn't necessarily put them in the "risk free" category as far as funds go.


----------



## vilk

budda said:


> I like to think people buying in at $500 know they're going to lose $525, but I have no idea


Yeah, I was thinking this whole thing was supposed to be more of a "fuck you" to hedges than a real attempt to make money.


----------



## Drew

mbardu said:


> Fair points.
> Not sure of reliability, but I guess something like Ortex could give us a proxy without having to wait for the 9th for actual updated short data?
> And although it does show a significant drop in terms of days-to-cover (showing below 2 currently, down from 6), that could be explained by the crazy volume - and that's still with almost 100% of shorts.
> 
> You also seem to 100% believe that aggressive funds would cower under the pressure and fold to cover their shorts instead of doubling down.
> I guess that would be the logical thing to do...but we've seen time and time again that it's not always what happens.
> Instead, even some pros sometimes average down and leverage up against all odds and end up losing it all.
> Isn't Melvin like 20 employees too? I'd be curious to see what their risk function looks like, but looking at their size and style, I wouldn't necessarily put them in the "risk free" category as far as funds go.


Well, days-to-cover is calculated from two things, right? Short position, and volume. That can drop for two reasons, short position falling (which we know was static for this period since new data hasn't been made available), or volume rising (which we know DID happen, dramatically). 

I think at some point, it's just bowing to reality. We don't know when the short positions first came on, but lets say - conservatively - they were taken on that day, after the GME share price had already doubled from the previous Friday close of 17.69. 

If you're short at 35.50, then by...
Tuesday you're down 3.86, or 11%
Wednesday, ylittle changed
Thuersday, down 7.53 or 21% 
Friday, down 29.51, or 83%
Monday, 1/25, down 41.29, or 116%
Tuesday, down 112.48, or 317%

When you're more than 300% down on a trade, not even including financing costs, and haven't posted a positive day in a week and a half, well, at a minimum, your short position size has increased four-fold, and considering hedge fund traders are generally given risk budgets to work with, you're in a situation where you pretty much HAVE to trim just to not to exceed your risk budget, and even if you do you're probably having hourly awkward calls with risk management. 

Again, this is hypothesis, not proven fact. I can't point to individual trades, I have no idea what the risk budgets were here, and some trader/firm with balls of steel very well may have convinced his risk department to ride this out, at which point they probably will stem most of their losses. But what we can see is, well, if the whole theory of the trade was to push a short squeeze and force shorts to cover, then that means that you also have to believe tat there IS a price where shorts will cover, and if we've gone from $35 a share to nearly $500 a share and not hit that pain point, well, that's hard to accept.


----------



## Drew

But, like, the one point I want to get across here, is that no one has any real clue what the short interest in GME is _now_. We know what it was two weeks ago, but clearly a lot has changed since then.


----------



## mbardu

Drew said:


> Well, days-to-cover is calculated from two things, right? Short position, and volume. That can drop for two reasons, short position falling (which we know was static for this period since new data hasn't been made available), or volume rising (which we know DID happen, dramatically).
> 
> I think at some point, it's just bowing to reality. We don't know when the short positions first came on, but lets say - conservatively - they were taken on that day, after the GME share price had already doubled from the previous Friday close of 17.69.
> 
> If you're short at 35.50, then by...
> Tuesday you're down 3.86, or 11%
> Wednesday, ylittle changed
> Thuersday, down 7.53 or 21%
> Friday, down 29.51, or 83%
> Monday, 1/25, down 41.29, or 116%
> Tuesday, down 112.48, or 317%
> 
> When you're more than 300% down on a trade, not even including financing costs, and haven't posted a positive day in a week and a half, well, at a minimum, your short position size has increased four-fold, and considering hedge fund traders are generally given risk budgets to work with, you're in a situation where you pretty much HAVE to trim just to not to exceed your risk budget, and even if you do you're probably having hourly awkward calls with risk management.
> 
> Again, this is hypothesis, not proven fact. I can't point to individual trades, I have no idea what the risk budgets were here, and some trader/firm with balls of steel very well may have convinced his risk department to ride this out, at which point they probably will stem most of their losses. But what we can see is, well, *if the whole theory of the trade was to push a short squeeze and force shorts to cover, then that means that you also have to believe tat there IS a price where shorts will cover, and if we've gone from $35 a share to nearly $500 a share and not hit that pain point, well, that's hard to accept.*



Again- I understand how days-to-cover is calculated, which is why I was saying that it could have just decreased just out of sheer volume with actually no tangible drop in shorts.

Now, your last point in bold is assuming that all shorts were entered at 35$. Whereas if you consider that overconfident players could very well double down at 70$ and so on... or who knows, exit at 50 before entering new short trades when they see the stock at 100$ or 200$ (like you said even _you _would consider), then that's a whole other universe. And agreed- that's what more up to date short data would tell us.

I have no idea how Melvin is structured and what their risk practices are...but the fact they were caught with their pants down and had to get a 3B bailout to survive on a reckless short (a quarter to third of their AUM) kinda indicates to me that:

For them, GME was a strategy rather than the work of a singular trader easily curbed by a small individual risk budget
They are not necessarily making the most rational and level headed decision in that trade. Or maybe they _are _rational but WSB is just too dumb to be impacted by reasonable thinking...wouldn't be the first time, won't be the last


----------



## Drew

Don't take it personally - I figured you probably did, but, one, that doesn't mean anyone following along would as well, too, and two, the easiest way of making that point is still to just point to the formula, even if we both know it.

Yeah, but the opposite is true, too - they could have shorted at $15, or at $20, and been queasy about the price action at $35-40.

Traders generally work as part of a team, as part of a unified strategy. Sorry if that was a little unclear, but the gist is that some desk owned that trade, and would have to answer for the fact it had quadrupled in size.

And, I'd argue that shorting GME actually IS a rational and level-headed decision. I mean, no one in this thread thinks GME is trding at fundamental value, right? Reddit was celebrating the fact they were up something like 50% YTD based on their trying to pile on and pressure short investors even two weeks ago, which is IMO a pretty strong admission that even two weeks ago the stock was overvalued. Shit, if volatility wasn't through the moon I'd probably be taking out out-o-the-money puts right now, as soon as reddit gives up this stock is cratering, because it's absolutely not worth $200.  Shorting it is just a rollercoaster right now, and one that I strongly suspect is too much for an investment manager with a fiduciary duty to their clients to weather.

Which actually brings us to an interesting point - for all the talk about the market conspiring and being rigged against retail investors, all that really happened after Robinhood stopped new buys and started selling margined positions to pay down margin, is the price _stabilized_. It - and AMC, the other reddit stock I've been watching - has actually been uncharacteristically stable since around noon, if you look at intra day price charts.

Kind of interesting to think about, as if Robinhood and other retail platforms were trying to drive the price down, they don't seem to be trying all that _hard. 
_
EDIT - take this with a grain of salt, as I don't know how aggressive Bloomberg is on updating this stuff, the last regulatory file date was 9/30, but large position changes do stll have to be reported to regulators... but I'm not seeing a short GME position in Melvin Capital's current holdings. Doesn't mean there aren't other firms shorting it - if short interest is 120% float there's no way a single firm was responsible for every short position - but I really do think they closed the short.


----------



## mbardu

Drew said:


> Don't take it personally - I figured you probably did, but, one, that doesn't mean anyone following along would as well, too, and two, the easiest way of making that point is still to just point to the formula, even if we both know it.
> 
> Yeah, but the opposite is true, too - they could have shorted at $15, or at $20, and been queasy about the price action at $35-40.
> 
> Traders generally work as part of a team, as part of a unified strategy. Sorry if that was a little unclear, but the gist is that some desk owned that trade, and would have to answer for the fact it had quadrupled in size.
> 
> And, I'd argue that shorting GME actually IS a rational and level-headed decision. I mean, no one in this thread thinks GME is trding at fundamental value, right? Reddit was celebrating the fact they were up something like 50% YTD based on their trying to pile on and pressure short investors even two weeks ago, which is IMO a pretty strong admission that even two weeks ago the stock was overvalued. Shit, if volatility wasn't through the moon I'd probably be taking out out-o-the-money puts right now, as soon as reddit gives up this stock is cratering, because it's absolutely not worth $200.  Shorting it is just a rollercoaster right now, and one that I strongly suspect is too much for an investment manager with a fiduciary duty to their clients to weather.
> 
> Which actually brings us to an interesting point - for all the talk about the market conspiring and being rigged against retail investors, all that really happened after Robinhood stopped new buys and started selling margined positions to pay down margin, is the price _stabilized_. It - and AMC, the other reddit stock I've been watching - has actually been uncharacteristically stable since around noon, if you look at intra day price charts.
> 
> Kind of interesting to think about, as if Robinhood and other retail platforms were trying to drive the price down, they don't seem to be trying all that _hard.
> _
> EDIT - take this with a grain of salt, as I don't know how aggressive Bloomberg is on updating this stuff, the last regulatory file date was 9/30, but large position changes do stll have to be reported to regulators... but I'm not seeing a short GME position in Melvin Capital's current holdings. Doesn't mean there aren't other firms shorting it - if short interest is 120% float there's no way a single firm was responsible for every short position - but I really do think they closed the short.



Appreciate the conversation man.
It's funny how we agree on most things, but a slight change in perspective just gives you a different view.

Like...sure, the price "stabilized" when RH blocked...if by stabilize you mean it f-ing dropped by 75% to then re-triple intraday. In 2 hours 
This drop from 400+ was definitely _not _retail driven or organic. Just look at that liquidation! Don't think I've seen anything like it, ever.
And magically, RH chooses that exact moment in between to liquidate its biggest long holders, and instead of having those sales depress the stock further (selling all those should lower the price, right?), it magically shoots up again.
Rigged.


I also whole-heartedly agree with your point that shorting GME is the very rational thing to do. Which is why I highly suspect there is still a very high amount of short interest, contrary to your impression that there no longer is.


----------



## TedEH

Drew said:


> get into the rocketship and have some fun, or, well, I don't even pretend to understand what's going on here





mbardu said:


> Or maybe they _are _rational but WSB is just too dumb to be impacted by reasonable thinking...wouldn't be the first time, won't be the last



I can only half follow what's going on (and it's being talked about _eeeeeverywhere_), but this seems like the most reasonable thing anyone has said about this all day. A random reddit doing insane things and building a bandwagon without anyone really understanding what they're doing? Checks out.


----------



## Drew

mbardu said:


> Shorting through selling call _options_ is allowing someone to buy 100 of the stock _from you_ later at a pre-agreed price, for a small fee. Also because you think the price will go down later, so you don't think the other party would actually go through with it since they can just buy lower on the market if the price has dropped. So you'd just keep the fee.
> 
> In the second case, the options are coming due - so similarly the shorts will have no other option but to aquire stocks at the current asking price of 200/300 to deliver on their commitment to sell them for 12$.


Re-reading this thread, one nit-picky little note on this - US options are generally cash-settled and not physical delivery settled, meaning if you're short a call on GME that settles in the money, you're not forced to deliver 100 shares on settlement, you're forced to deliver cash equal to that day's market close of 100 shares. If you want to get out of this position before settlement, the easiest way to do so is to buy the offsetting position, buy a call option for the same settlement date and strike price, so the two positions wash and the broker nets them. At that point, your loss is the difference between the profit you made selling the short call, and the purchase price of the long call. 

Also, hedge funds very rarely short options and leave them _entirely _unhedged. Selling calls naked is very risky - selling out-of-the-money calls when you own the underlying is just an income generation strategy that, at worst, caps your upside if a stock price rises aggressively.


----------



## mbardu

Drew said:


> Re-reading this thread, one nit-picky little note on this - US options are generally cash-settled and not physical delivery settled, meaning if you're short a call on GME that settles in the money, you're not forced to deliver 100 shares on settlement, you're forced to deliver cash equal to that day's market close of 100 shares. If you want to get out of this position before settlement, the easiest way to do so is to buy the offsetting position, buy a call option for the same settlement date and strike price, so the two positions wash and the broker nets them. At that point, your loss is the difference between the profit you made selling the short call, and the purchase price of the long call.
> 
> Also, hedge funds very rarely short options and leave them _entirely _unhedged. Selling calls naked is very risky - selling out-of-the-money calls when you own the underlying is just an income generation strategy that, at worst, caps your upside if a stock price rises aggressively.



Are you sure most equity options are not settled in equity? I've never held to expiration but always get warnings from my broker that doing so would create equity positions.
Anyway, I tried to keep it simple. For all intents and purposes, having to cash-settle vs buying to deliver the stock would give you the same type of loss/gains.

As for keeping things 100% unhedged, yeah, that probably rarely if ever happens. But conversely, you rarely hedge 100% (otherwise what's your edge...pun intended), and with parabolic moves (say a dead stock increasing hundreds or thousands of percents), the hedge can quickly become moot.


----------



## Drew

mbardu said:


> Appreciate the conversation man.
> It's funny how we agree on most things, but a slight change in perspective just gives you a different view.
> 
> Like...sure, the price "stabilized" when RH blocked...if by stabilize you mean it f-ing dropped by 75% to then re-triple intraday. In 2 hours
> This drop from 400+ was definitely _not _retail driven or organic. Just look at that liquidation! Don't think I've seen anything like it, ever.
> And magically, RH chooses that exact moment in between to liquidate its biggest long holders, and instead of having those sales depress the stock further (selling all those should lower the price, right?), it magically shoots up again.
> Rigged.
> 
> 
> I also whole-heartedly agree with your point that shorting GME is the very rational thing to do. Which is why I highly suspect there is still a very high amount of short interest, contrary to your impression that there no longer is.


And vice versa, very much to my surprise. 

Doesn't add up though. If the price is falling, that means more people are selling than buying. That sounds a lot like profit taking, either hordes of retail investors or - I don't think you can rule it out - institutional money in the form of momentum traders or even the same hedge funds who could have taken a "if you can't beat them, join them" attitude. Either way, that's definitely NOT short selling. 

It took some time, but by noon the stocks were beginning to trade in a "normal" pattern, and while it wasn't close to exact, started to at least fluctuate in the same general direction as the S&P500. 

That's actually the thing I'm the most surprised by here, to be honest - volume appears to be way down in the afternoon, but I'd still expect to see, well, SOME movement, either the stock dropping as retail investors take profits, or it rising as more piled in. And I'm very much thinking through this as I type, but this should be a no-brainer of an opportunity to take profits, after the last week, so the simplest explanation very well may be most GME holders don't WANT to sell, for non-economic reasons. 

Re: shorts - it's a pity we won't get a good look at WHO's short. I'm reasonably confident that the short positions that started this all off have been closed. But, this morning's drop could definitely be selling by long/short managers figuring the $350 a share value was ludicrious, brokerages were starting to get this under control, and that any new short positions would stand to make a killing. Heaviest volume was definitely during and just after the period where the price was dropping.


----------



## Drew

mbardu said:


> Are you sure most equity options are not settled in equity? I've never held to expiration but always get warnings from my broker that doing so would create equity positions.
> Anyway, I tried to keep it simple. For all intents and purposes, having to cash-settle vs buying to deliver the stock would give you the same type of loss/gains.
> 
> As for keeping things 100% unhedged, yeah, that probably rarely if ever happens. But conversely, you rarely hedge 100% (otherwise what's your edge...pun intended), and with parabolic moves (say a dead stock increasing hundreds or thousands of percents), the hedge can quickly become moot.


Depends on the contract, of course, but cash settled options are by far the most common in the US.

It does create the same P/L, but it's a lot easier to get cash, rather than shares of a particular stock that's in the middle of a short squeeze, so the market impact if this is happening at high volumes is going to be different. Also, as you point out, it's pretty easy to NOT have to settle an option as it nears expiration, either by hedging it with its offsetting long, or just selling it.


----------



## mbardu

Drew said:


> And vice versa, very much to my surprise.
> 
> Doesn't add up though. If the price is falling, that means more people are selling than buying. That sounds a lot like profit taking, either hordes of retail investors or - I don't think you can rule it out - institutional money in the form of momentum traders or even the same hedge funds who could have taken a "if you can't beat them, join them" attitude. Either way, that's definitely NOT short selling.
> 
> It took some time, but by noon the stocks were beginning to trade in a "normal" pattern, and while it wasn't close to exact, started to at least fluctuate in the same general direction as the S&P500.
> 
> That's actually the thing I'm the most surprised by here, to be honest - volume appears to be way down in the afternoon, but I'd still expect to see, well, SOME movement, either the stock dropping as retail investors take profits, or it rising as more piled in. And I'm very much thinking through this as I type, but this should be a no-brainer of an opportunity to take profits, after the last week, so the simplest explanation very well may be most GME holders don't WANT to sell, for non-economic reasons.
> 
> Re: shorts - it's a pity we won't get a good look at WHO's short. I'm reasonably confident that the short positions that started this all off have been closed. But, this morning's drop could definitely be selling by long/short managers figuring the $350 a share value was ludicrious, brokerages were starting to get this under control, and that any new short positions would stand to make a killing. Heaviest volume was definitely during and just after the period where the price was dropping.



The whole day has been low volume (well...in proportion to the last couple of days of course).
And that's to the surprise of absolutely noone, considering recent buying has been retail, and retail buying (especially margin buying) has been severely curtailed. Even tomfoolery aside, low volume wouldn't be surprising anyway...we know retail doesn't buy in large volume for names over 100$/200$, so it was unlikely to continue.

But anyway, for me, all the more reason to think that that hourly candle around 7 Eastern / 10 Pacific was absolutely not organic.
No hordes of retail investors could have done that with that discipline (seriously...75% down??). An institution taking profits? Unlikely considering they would have had to get in longs with volume semi-_recently _(which we haven't seen per your look at recent order sizes) for them to take profits _now _and just stop at ~100? So most likely reading is a coordinated sell ladder to mechanically depress the price while retail was in shock. At least that's exactly how I think the chart would look if that were the case


----------



## Drew

BTW, catching up on the afternoon news, GME and AMC are both up after market as Robinhood indicated they'll allow limited resumption of purchases on Friday, and Robinhood has reportedly drawn on bank lines of credit after the events of the last few days, evidently having suffered some losses of their own.


----------



## Drew

mbardu said:


> The whole day has been low volume (well...in proportion to the last couple of days of course).
> And that's to the surprise of absolutely noone, considering recent buying has been retail, and retail buying (especially margin buying) has been severely curtailed. Even tomfoolery aside, low volume wouldn't be surprising anyway...we know retail doesn't buy in large volume for names over 100$/200$, so it was unlikely to continue.
> 
> But anyway, for me, all the more reason for me to think that that hourly candle around 7 Eastern / 10 Pacific was absolutely not organic.
> No hordes of retail investors could have done that with that discipline (seriously...75% down??). An institution? Unlikely considering they would have had to get in longs with volume _recently _(which we haven't seen per your look at recent order sizes) in order to be able to liquidate _now _and stop taking profit at ~100. So most likely reading is a coordinated sell ladder to mechanically depress the price while retail was in shock. At least that's exactly how I think the chart would look if that were the case


You mean 10 eastern, 7 pacific? 

Well, that whole decline was basically circuit breaker after circuit breaker. Basially, sells were coming in so fast that automated trading halts would kick in, when they would resume another influx of sells would hit and it would trip down again, etc. It actually continued _after_ the security bottomed out, as the low came around 11:30 but from then to about noon _limit up_ circuit breakers kept stopping trading. 

I'm not saying institutional buyers have abandoned the market - if the average trade was ~200+ shares, but massive standard deviation and anecdotal chatter on r/wsb points to a ton of retail buying, then there's gotta be big trades hitting the tape to keep the average from being 10, you know? All I can say is it looks like there's a lot more small trading than normal, and at a time of high volume that suggests a lot of that excess volume is retail. Frankly, it would shock me if momentum-factor algo funds _weren't _in on the action these last few days. 

But, if pulling away retail buying makes the price drop and then stabilize, isn't that pretty clear evidence that yesterday's trading was driven by retail speculation and not short covering? Plenty of selling in the market this morning, you know?


----------



## Drew

mbardu said:


> So most likely reading is a coordinated sell ladder to mechanically depress the price while retail was in shock. At least that's exactly how I think the chart would look if that were the case


That, btw, WOULD be wildly illegal. It's unclear if what r/wsb is doing is above the line here too, and if it eventually comes out that this was a day drader who decided to try to convince the whole subreddit to buy GME, ostentatiously to "stick it to the man," but in reality so he could pump-and-dump his own position, that's probably going to fall afoul of the law, as well... but structuring a series of sells to try to artificially depress the price WILL earn you a visit from the SEC.


----------



## Mathemagician

At this point, anyone who doesn’t understand that the long trade would have been picked up by any hedge fund looking at the math is angry at the wrong people. 

The fundamental value of GameStop is irrelevant. 

The shorts overlevered and are contractually obligated to buy shares back. And there are not enough. So if one holds they enjoy a price bump or “short squeeze” this happens near weekly in the markets.


----------



## Drew

Mathemagician said:


> At this point, anyone who doesn’t understand that the long trade would have been picked up by any hedge fund looking at the math is angry at the wrong people.
> 
> The fundamental value of GameStop is irrelevant.
> 
> The shorts overlevered and are contractually obligated to buy shares back. And there are not enough. So if one holds they enjoy a price bump or “short squeeze” this happens near weekly in the markets.


I only disagree in that I think what we're seeing now isn't a short squeeze, that most/all of the original shorts are almost certaily covered, and that this trade has taken on a life of its own for, well... other reasons.  Sort of a combination of momentum/blindly following the recent price action, and a sort of nihilistic "witness me!" lack of concern for being on the wrong side of the trade, provided your losses are eternal, shiny, and chrome. 

It's surreal.


----------



## InfinityCollision

Drew said:


> All in, it's a picture that while I can't _prove_ anything, it makes a pretty strong case that most/all of the short positions that existed on 1/15 have already been covered, and what's pushing the price up isn't institutional demand looking to cover short positions, but retail demand looking to, well, either "attack wall street," profit from a momentum trade, get into the rocketship and have some fun, or, well, I don't even pretend to understand what's going on here, lol.


Bots. Social listening systems saw the hype and automatically bought in, even selling other positions to fund further buys due to media volume. It's not just the hedge funds that were shorting Gamestop that are sweating this.


----------



## Mathemagician

Drew said:


> I only disagree in that I think what we're seeing now isn't a short squeeze, that most/all of the original shorts are almost certaily covered, and that this trade has taken on a life of its own for, well... other reasons.  Sort of a combination of momentum/blindly following the recent price action, and a sort of nihilistic "witness me!" lack of concern for being on the wrong side of the trade, provided your losses are eternal, shiny, and chrome.
> 
> It's surreal.



It’s very surreal. But don’t forget the other copycat funds that just try to reverse engineer top managers.

I’m surprised by some of the short estimates. On the one hand it DOES make sense to keep shorting at $300+,
But if you short $100mm notional principal and it goes to $600 you’re getting margin called. Then to 800? Margin call. Repeat.

If the the shorts have to cover their short or pay the margin. And this would not have occurred had people not repeated 2008 Volkswagen.

Hedge funds do this garbage to each other like it’s a game. Remember the Herbalife short? A bunch of other guys pumped it purposefully to screw Ackerman. Fundamentals on the trade weren’t primary.

But this time retailers with no risk management department and no Limited Partners (investors) to impress are doing it and suddenly “short squeezes aren’t fair” is the narrative. But who allowed 120%+ of short interest?

That company isn’t worth anything close to where it’s been at. But the question is to you and Mbardu’s point how long can a fund stay solvent shorting?

It’s super interesting to watch a case study on naked calls unfold.

Hedge funds went broke in ‘05 & ‘06 betting against the housing market. They were right they were just too early and went broke.


----------



## mbardu

Drew said:


> That, btw, WOULD be wildly illegal. It's unclear if what r/wsb is doing is above the line here too, and if it eventually comes out that this was a day drader who decided to try to convince the whole subreddit to buy GME, ostentatiously to "stick it to the man," but in reality so he could pump-and-dump his own position, that's probably going to fall afoul of the law, as well... but structuring a series of sells to try to artificially depress the price WILL earn you a visit from the SEC.



That's why most of WSB has been doing everything they can to _not_ appear as a single entity pushing in a single direction, but as a group of individuals who just tend to agree that the GME play is a good one worth holding.

BTW, that particular user _/u/dfv_ is down about 15 million $ today, still 19 million $ in play. He has almost 14 million $ already out as cash, and most importantly is now an honorary mod.

Oh yeah, and $GME is up 100$ AH.


----------



## mbardu

Oh look! They said the quiet part out loud:





So either IB chairman is not aware of what's happening....or that pretty much settles it.


----------



## Mathemagician

WSB has been banning day-old accounts the last week+ showing up making claims/requests to “pump” other names. That sub is careful to present ideas for the masses to rebuke, and to clearly not just hype a name. Anyone at any time can present a counter argument to the idea. Instead accounts were discussing other heavily shorted names to squeeze. 

At its core it’s a short term trade algos would jump on. 

My expectation? Regulation that makes things harder for individual investors.


----------



## Drew

Mathemagician said:


> Hedge funds do this garbage to each other like it’s a game. Remember the Herbalife short? A bunch of other guys pumped it purposefully to screw Ackerman. Fundamentals on the trade weren’t primary.


Neither here nor there, but that whole Akerman/Icahn rivaly over Herbalife, with them waging a VERY public feud with each other and talking up their own positions while criticizing the other's, may have been inside the letter of the law, but seemed a lot like market manipulation at the time to me. 

I don't think there's anything inherently wrong with short interest exceeding the shares outstanding in a stock - it just means lots of people thought Gamestop's price was going to fall. They don't have to all cover at the same time, so short interest is theoretically uncapped (just as theres no technical reason if you were really bullish on Gamestop, you couldn't go out and buy call options covering more shares than were outstanding in the market). It's just, if you do, you have to be aware that you're entering a VERY crowded trade, and that if the market moves against it there's going to be a lot of people rushing for the door. 

But, again, I don't think that's what happened here. There was definitely more interest n buying than selling for the last few days, but every buyer needs someone to sell to them, so sales WERE happening, and at a volume that dropped days to cover below one, if shorts were trying to cover and that's what was bidding up the stock price, they'd easily have done so. Someone else was bidding up the share price, and my money is a combination of algorithmic momentum funds and momentum fund traders, as well as unprecedented retail demand, both from r/wsb, and probably hundreds of thousands of low-information traders just wanting to get in on a hot stock tip, some of which probably opened accounts just to join in.


----------



## Drew

mbardu said:


> Oh look! They said the quiet part out loud:
> 
> View attachment 89557
> 
> 
> 
> So either IB chairman is not aware of what's happening....or that pretty much settles it.


That guy actually IS an idiot.  Spent a LOT of his own money running testimonial-style capaign ads against Obama, claiming growing up in Hungary he'd seen socialism first hand and didn't want to see it come to America. Became a prominent Trump supporter for the same reasons.

And, again, there's no way for him to know the short squeeze had actually ended, considering the only look at short interest we have is now a week out of date.



Mathemagician said:


> My expectation? Regulation that makes things harder for individual investors.


Conversation for a different time, but individual investors having easy access to brokerage accounts is kind of a two edged sword, and I have as big a problem with brokerage companies pitching glamorized looks at being a "trader" as I do pharma companies pitching glamorized ads that pitch a lifestyle, to try to get you to ask your doctor about a drug. At least in the latter there's a gatekeeper. 

One of the things I think where we MAY see some stricter regulation in the wake of this is in access to margin, as that's a sure-fire way to get in trouble as an inexperienced investor. 

Shit, I'm a CFA charterholder, work for an investment firm, and I _still_ mostly just use broad-market ETFs in my own account, and give myself pretty strict limits on the percentage of my account I'll actively manage (10% or less, generally, though with enough conviction I'll occasionally stretch to 15%).


----------



## mbardu

Drew said:


> That guy actually IS an idiot.  Spent a LOT of his own money running testimonial-style capaign ads against Obama, claiming growing up in Hungary he'd seen socialism first hand and didn't want to see it come to America. Became a prominent Trump supporter for the same reasons.
> 
> And, again, there's no way for him to know the short squeeze had actually ended, considering the only look at short interest we have is now a week out of date.



Oh yeah no...I'm definitely _not _talking up the guy's character.
But, keeping aside the fact that he has _some _pull, he's also exactly the kind of people I'd imagine with no regard for the retail investor and with no qualms in bending the rules in his and his community's favor. Hence it's pretty on point.

Really sounds like a confession of "nuh-huh, retail investors are not able to make money, screw them".


----------



## Mathemagician

At the end of the day, market makers should not be able to invest in hedge funds, which Citadel did. 

And then Citadel conspired with the brokerages like RH that they pay for flows to pause all trading in order to benefit those trying to drop the price. 

There was demand - for one reason or another - and the supposed neutral parties took the side of institutional HF money. 

The “free market” only works if people believe in it. And they just behaved in an open manner to show that “one hand scratches the other” at the detriment of people with $300 brokerage accounts who were objectively right. 

Not being allowed to choose to sell into unprecedented demand, while institutional money could still trade freely is insane. 

A real circuit breaker affects everyone. This was retail not being allowed to buy until someone else repositioned. 

Like it’s simply wild seeing this occur in real time where different parties are getting different rules.


----------



## mbardu

Drew said:


> Conversation for a different time, but individual investors having easy access to brokerage accounts is kind of a two edged sword, and I have as big a problem with brokerage companies pitching glamorized looks at being a "trader" as I do pharma companies pitching glamorized ads that pitch a lifestyle, to try to get you to ask your doctor about a drug. At least in the latter there's a gatekeeper.
> 
> One of the things I think where we MAY see some stricter regulation in the wake of this is in access to margin, as that's a sure-fire way to get in trouble as an inexperienced investor.
> 
> Shit, I'm a CFA charterholder, work for an investment firm, and I _still_ mostly just use broad-market ETFs in my own account, and give myself pretty strict limits on the percentage of my account I'll actively manage (10% or less, generally, though with enough conviction I'll occasionally stretch to 15%).



You mean a 3 sentences questionnaire about "experience", with no actual verification is not enough to actually verify the financial proficiency of investors?

True, it goes a bit beyond that particular discussion, but I agree- on top of a few hedge funds going kaboom because of a failed retailer, masses of new investors overleveraged in meme and momo stocks is just what we need to get that SPX back to 2K where it belongs


----------



## Drew

mbardu said:


> Oh yeah no...I'm definitely _not _talking up the guy's character.
> But, keeping aside the fact that he has _some _pull, he's also exactly the kind of people I'd imagine with no regard for the retail investor and with no qualms in bending the rules in his and his community's favor. Hence it's pretty on point.
> 
> Really sounds like a confession of "nuh-huh, retail investors are not able to make money, screw them".


Eh, Interactive Broker's business model is selling brokerage accounts with competitive trading fees to retail investors, as an alternative to professional investment management. Retail investors are his firm's very reason for existing. 

What I WOULD believe, though, is he sees an opportunity here to pin this on Robinhood, as their brand of no-fee trading brokerage account IS a direct risk to his business.


----------



## mbardu

Mathemagician said:


> At the end of the day, market makers should not be able to invest in hedge funds, which Citadel did.
> 
> And then Citadel conspired with the brokerages like RH that they pay for flows to pause all trading in order to benefit those trying to drop the price.
> 
> There was demand - for one reason or another - and the supposed neutral parties took the side of institutional HF money.
> 
> The “free market” only works if people believe in it. And they just behaved in an open manner to show that “one hand scratches the other” at the detriment of people with $300 brokerage accounts who were objectively right.
> 
> Not being allowed to choose to sell into unprecedented demand, while institutional money could still trade freely is insane.
> 
> A real circuit breaker affects everyone. This was retail not being allowed to buy until someone else repositioned.
> 
> Like it’s simply wild seeing this occur in real time where different parties are getting different rules.



Oh yeah, thanks for that- I almost forgot to reply to Drew earlier.
Actual circuit breakers are fine. Happened a few times last year on the typical agreed-upon %age drops on indices.
But selective stops and made up rules with literally dozens of halts on a single name. That's something else entirely.



Drew said:


> Eh, Interactive Broker's business model is selling brokerage accounts with competitive trading fees to retail investors, as an alternative to professional investment management. Retail investors are his firm's very reason for existing.
> 
> What I WOULD believe, though, is he sees an opportunity here to pin this on Robinhood, as their brand of no-fee trading brokerage account IS a direct risk to his business.



I didn't mean it literally as the business model of his company. More as the spirit of the billionaire owners who despise the "lower class" as inferior.


----------



## Drew

Mathemagician said:


> Not being allowed to choose to sell into unprecedented demand, while institutional money could still trade freely is insane.
> 
> A real circuit breaker affects everyone. This was retail not being allowed to buy until someone else repositioned.



Unless I missed something, the only times when people couldn't _sell_ on Robinhood were when the market circuit breakers flipped. Robinhood, however, imposed a block on new _buys_ today, blocking investors from taking on new long positions while the market was selling off. 

I'm not sure I'd want to defend that choice - I think the better option would have been to jusy halt trading a the exchange level, rather than leaving it up to brokerages, as it gets kind of murky quickly. But, at a minimum, I'm not aware of any time where someone who wanted to sell GME, _couldn't_ sell it, except during those market circuit breaker cool-down periods which impacted all traders.


----------



## Drew

Anyway I've had a long fucking day at work, I'm signing off and getting away from a screen and picking up a guitar. Interesting chat today, I think in a few more days we'll know a lot more about this.


----------



## mbardu

In other news, GME now up 150$ after hours.


----------



## mbardu

Drew said:


> Anyway I've had a long fucking day at work, I'm signing off and getting away from a screen and picking up a guitar. Interesting chat today, I think in a few more days we'll know a lot more about this.


----------



## Steinmetzify

So if Drew is right, these WSB guys are about to lose their collective asses tomorrow, correct?


----------



## chinnybob

mbardu said:


> You mean a 3 sentences questionnaire about "experience", with no actual verification is not enough to actually verify the financial proficiency of investors?



This. Granted everyone who wants to should be able to access to financial markets, but it's far too easy and brokers need to have a long look at their vetting process. Thankfully on this side of the pond it's starting to get very strict.

I'm curious as to how this accelerates the conversation on activist investing, up until now it's been mostly focussed on emissions markets and fairly benevolent but this is a whole different kettle of fish... if this is the "cat out of the bag" moment where online communities realise the impact they can have then regulators are going to have to act swiftly.

PS. nice to see some other finance workers on here. Pleasure to meet you and talk shop


----------



## Mathemagician

Drew said:


> That guy actually IS an idiot.  Spent a LOT of his own money running testimonial-style capaign ads against Obama, claiming growing up in Hungary he'd seen socialism first hand and didn't want to see it come to America. Became a prominent Trump supporter for the same reasons.
> 
> And, again, there's no way for him to know the short squeeze had actually ended, considering the only look at short interest we have is now a week out of date.
> 
> 
> Conversation for a different time, but individual investors having easy access to brokerage accounts is kind of a two edged sword, and I have as big a problem with brokerage companies pitching glamorized looks at being a "trader" as I do pharma companies pitching glamorized ads that pitch a lifestyle, to try to get you to ask your doctor about a drug. At least in the latter there's a gatekeeper.
> 
> One of the things I think where we MAY see some stricter regulation in the wake of this is in access to margin, as that's a sure-fire way to get in trouble as an inexperienced investor.
> 
> Shit, I'm a CFA charterholder, work for an investment firm, and I _still_ mostly just use broad-market ETFs in my own account, and give myself pretty strict limits on the percentage of my account I'll actively manage (10% or less, generally, though with enough conviction I'll occasionally stretch to 15%).



I mean, if we’re allowed to charge for healthcare, and leave people in debt for trying to get an education, now we stop them from yolo’ing the measly $300 they have?

Like, we’ll sell people cancer as cigarettes then bankrupt them with treatment for lung cancer.

But letting idiots go into debt for a potential upside is a bridge too far?

We let those same idiots borrow $60k for a frisbee degree. What’s the difference? One is socially acceptable.

I def do not have an answer either. 



mbardu said:


> Oh yeah, thanks for that- I almost forgot to reply to Drew earlier.
> Actual circuit breakers are fine. Happened a few times last year on the typical agreed-upon %age drops on indices.
> But selective stops and made up rules with literally dozens of halts on a single name. That's something else entirely.
> 
> 
> 
> I didn't mean it literally as the business model of his company. More as the spirit of the billionaire owners who despise the "lower class" as inferior.



Bro the retail-only purchase stop was 100% rules for you but not for me.

I want to see court’s reading out Reddit comments and usernames though. That’s going to be good.




Drew said:


> Unless I missed something, the only times when people couldn't _sell_ on Robinhood were when the market circuit breakers flipped. Robinhood, however, imposed a block on new _buys_ today, blocking investors from taking on new long positions while the market was selling off.
> 
> I'm not sure I'd want to defend that choice - I think the better option would have been to jusy halt trading a the exchange level, rather than leaving it up to brokerages, as it gets kind of murky quickly. But, at a minimum, I'm not aware of any time where someone who wanted to sell GME, _couldn't_ sell it, except during those market circuit breaker cool-down periods which impacted all traders.



I 100% misspoke. It was “could not buy”. Therefore curtailing demand, which would have supported prices further.



chinnybob said:


> This. Granted everyone who wants to should be able to access to financial markets, but it's far too easy and brokers need to have a long look at their vetting process. Thankfully on this side of the pond it's starting to get very strict.
> 
> I'm curious as to how this accelerates the conversation on activist investing, up until now it's been mostly focussed on emissions markets and fairly benevolent but this is a whole different kettle of fish... if this is the "cat out of the bag" moment where online communities realise the impact they can have then regulators are going to have to act swiftly.
> 
> PS. nice to see some other finance workers on here. Pleasure to meet you and talk shop



Just don’t explain economic concepts in politics threads. People don’t like being wrong with math.


----------



## mbardu

steinmetzify said:


> So if Drew is right, these WSB guys are about to lose their collective asses tomorrow, correct?



Not necessarily tomorrow. But either :

there's still substantial short interest in which big players are locked...in which case the price will surge more. From a few hours to a couple of days. But price-wise, the sky's the limit.
or

the squeeze has already happened and now 2 to 400$ is an artificial top maintained solely by retail naïve investors. Won't go higher than that.

In both cases, at the latest next tuesday/wednesday is going to be everyone running for the exits with sell orders.
Do we start that great selloff from 100$, 500$ or 1500$...we don't really know yet! We just know it ends with Gamestop back down to 15$.


----------



## Mathemagician

About the short ladder attempt, I’m going to quote a commenter on the subreddit that I suppose may partially explain the ladder’s failure.

“The pros all use stops, so their little short ladder would normally have worked. But we are all too stupid for stops.”

Which I just think is hilarious. In the event that it actually occurred the idea that people with 1-2 shares would have sitting stops is so last-ditch.

Also there is this interview with the Chairman of Interactive Brokers.


----------



## mbardu

Mathemagician said:


> About the short ladder attempt, I’m going to quote a commenter on the subreddit that can at least partially explain the ladder’s failure.
> 
> “The pros all use stops, so their little short ladder would normally have worked. But we are all too stupid for stops.”
> 
> Which I just think is hilarious. In the event that it actually occurred the idea that people with 1-2 shares would have sitting stops is so last-ditch.
> 
> Also there is this interview with the Chairman of Interactive Brokers.




Common advice on /r/WSB is indeed to not keep a stop. But even without triggering other players' stops, they would have been (or allegedly were able) to mechanically send the price lower by coordinating to repeatedly sell to each other in a short time frame.


----------



## Mathemagician

Yep. But what do you seriously expect the outcome to be, other than more regulations on retail investors? 

The blatantly biased behavior by market makers & brokers - see the chairman openly admitting that they would not ALLOW purchases until the price dropped to what THEY felt it was “worth”. 

So now, after a decade of runaway valuation growth with zero interest rates and an ever-running day cent of global central bank bailout money, NOW fundamentals matter. 

Once retail investors figure out how to read publicly published short data. 

The real issue is that they seem to have infinite credit with the brokers, IE no margin calls and the ability to keep shorting when they should be getting margin called. 

So what the nerds would actually have to do to “win” against the banks is stabilize the price at serious length, days or weeks to wait out the short positions all while continuing to elevate the price to punish new shorts. All while hoping that the brokers finally start margin calling. 

It’s a big ask (read: unicorn event) of a disorganized group of individuals. If there is no squeeze tomorrow it’ll be a big test of the long’s resolve. 

Popcorn time in between meetings, lol.


----------



## Vyn

What's that? Markets need regulation to stop them from breaking? Whoddathubkit.

This is a scenario that's been a long time coming really. Shorting shouldn't be legal in the first place.


----------



## chinnybob

Mathemagician said:


> Yep. But what do you seriously expect the outcome to be, other than more regulations on retail investors?



I'd actually be quite surprised if there was any immediate rule change resulting from this. Regulatory change is very slow moving: even changes resulting from '08 took the best part of a decade. What I suspect will happen here is that interpretation and guidance will change such that regulators can shoehorn what's happening into the current rules and act on it within the remit of their current powers. Which isn't ideal, but social media is a whole new beast for these guys.

Secondly I wouldn't expect any additional regulations on retail investors directly, it's not their status which is the problem and restricting access to financial markets isn't a desirable outcome for anyone. The job of the regulator is to protect the integrity of the market and protect investors, the issue they face now is how to deal with what is essentially crowdfunded market abuse.


----------



## philkilla

Mathemagician said:


> Yep. But what do you seriously expect the outcome to be, other than more regulations on retail investors?
> 
> The blatantly biased behavior by market makers & brokers - see the chairman openly admitting that they would not ALLOW purchases until the price dropped to what THEY felt it was “worth”.
> 
> So now, after a decade of runaway valuation growth with zero interest rates and an ever-running day cent of global central bank bailout money, NOW fundamentals matter.
> 
> Once retail investors figure out how to read publicly published short data.
> 
> The real issue is that they seem to have infinite credit with the brokers, IE no margin calls and the ability to keep shorting when they should be getting margin called.
> 
> So what the nerds would actually have to do to “win” against the banks is stabilize the price at serious length, days or weeks to wait out the short positions all while continuing to elevate the price to punish new shorts. All while hoping that the brokers finally start margin calling.
> 
> It’s a big ask (read: unicorn event) of a disorganized group of individuals. If there is no squeeze tomorrow it’ll be a big test of the long’s resolve.
> 
> Popcorn time in between meetings, lol.



According to WSB, today is the day to go to the fucking next galaxy lmao


----------



## Mathemagician

chinnybob said:


> Secondly I wouldn't expect any additional regulations on retail investors directly, it's not their status which is the problem and restricting access to financial markets isn't a desirable outcome for anyone. The job of the regulator is to protect the integrity of the market and protect investors, the issue they face now is how to deal with what is essentially crowdfunded market abuse.



That’s an incorrect outlook on the trade itself. Hedge funds overshorted 140% of available shares and at some point will have to buy them back.

Everyone bought shares to hold.

There is NO manipulation. No brokerage executive has been able to explain how people openly talking about a trade is breaking a rule.

When hedge funds short a company they run around on every news network. Ragging about their shorts in order to get others to listen to their thesis and follow them to sell.

Riding a short squeeze is a technique algos use to generate short term returns.


----------



## chinnybob

Mathemagician said:


> That’s an incorrect outlook on the trade itself. Hedge funds overshorted 140% of available shares and at some point will have to buy them back.
> 
> Everyone bought shares to hold.
> 
> There is NO manipulation. No brokerage executive has been able to explain how people openly talking about a trade is breaking a rule.
> 
> When hedge funds short a company they run around on every news network. Ragging about their shorts in order to get others to listen to their thesis and follow them to sell.
> 
> Riding a short squeeze is a technique algos use to generate short term returns.



I think I might have missed something here. I'm not disputing the legitimacy of speculating against publicly large short positions, but encouraging people to buy a security for the sole purpose of driving up the price is market manipulation. WSB ganging up and inflating the price of GME purely so that those with short positions lose money? Market manipulation.


----------



## Demiurge

chinnybob said:


> I think I might have missed something here. I'm not disputing the legitimacy of speculating against publicly large short positions, but encouraging people to buy a security for the sole purpose of driving up the price is market manipulation. WSB ganging up and inflating the price of GME purely so that those with short positions lose money? Market manipulation.



Using an icky tactic to assail those employing an icki_er_ tactic, it's interesting to watch once abandoning the notion that this a matter of heroes versus villains. I'm sure the big investors on the WSB side won't be wringing their hands over the money they make when they sell or the losses from the coattail-riders (who may be less-sophisticated investors acting with caprice & money they otherwise can't afford to lose) who find them selves buying-in before the bottom drops.


----------



## mbardu

chinnybob said:


> I think I might have missed something here. I'm not disputing the legitimacy of speculating against publicly large short positions, but encouraging people to buy a security for the sole purpose of driving up the price is market manipulation. WSB ganging up and inflating the price of GME purely so that those with short positions lose money? Market manipulation.



Again- that's flipping the problem on its head.
When big bois jump into momo trades or short squeezes, nobody bats an eye, but if it's Reddit and individuals doing it, then suddenly it's market abuse?
WSB folks are not charity, they're in it to make money, and they're vocal about it. Taking down a hedge fund (not going to happen) would be a nice icing on the cake, sure.

When funds, also in it to make money sell 140% of the float and are very vocally shouting it from the rooftops it's OK, but not WSB shouting their buying? Are the funds not doing what they're doing "_for the purpose of driving the price of a security_"? Wow! Much market manipulation! Such Market Abuse! Except it's institutions doing it so it's OK? They're also happy to fleece competing hedge funds or the retail investors, you know .

What kind of selective reverse logic is that?


----------



## Mathemagician

Publicly announcing short bets on media for weeks and months on end fits that exact loose definition of market manipulation.

Hedge funds and analysts go on TV to “sell their book” whatever they are long on or short on. They are trying to get others to copy their trade.

The people on WSB regularly lose money and are open about being wrong very often.

The shorts wanted one outcome and the longs wanted another, and the shorts are contractually obligated to pay whatever the market rate is.

The Reddit idiots cannot be “bad guys/market manipulators”
Without the HF shorts also fitting that definition.

Stock value has zero to do with “fundamentals” or “intrinsic value”. It’s just supply & demand. Or more clearly: In the short term stock price can be anything anyone wants - a fact that shorts take advantage of daily. Over a long enough time frame the AVERAGE price will roughly reflect fundamentals. 

There are no “good guys or bad guys”, except the regulators that gutted the stock act, and the exchanges that allowed greater than 100% short float.

Naked (uncovered) Short trades have infinite loss potential. Why have a financial instrument that has no risk because exchanges will protect you from losses? There is a reason retail investors cannot engage in naked shorts.


----------



## chinnybob

mbardu said:


> Again- that's flipping the problem on its head.
> When big bois jump into momo trades or short squeezes, nobody bats an eye, but if it's Reddit and individuals doing it, then suddenly it's market abuse?
> WSB folks are not charity, they're in it to make money, and they're vocal about it. Taking down a hedge fund (not going to happen) would be a nice icing on the cake, sure
> When funds in it to make money sell 140% of the float and are very vocally shouting it from the rooftops it's OK, but not WSB buying? Are they not doing that "_for the purpose of driving the price of a security_"? They're also happy to fleece competing hedge funds or the retail investors, you know .
> 
> What kind of selective reverse logic is that?



Ah sorry to be clear I'm only talking about the reddit part of it, at no point did I say what the hedge funds do is ok, I'm not particularly interested in that. In any case we can't justify what some people on WSB are doing just because hedge funds might have done it first.


----------



## mbardu

Mathemagician said:


> Publicly announcing short bets on media for weeks and months on end fits that exact loose definition of market manipulation.
> 
> Hedge funds and analysts go on TV to “sell their book” whatever they are long on or short on. They are trying to get others to copy their trade.
> 
> The people on WSB regularly lose money and are open about being wrong very often.
> 
> The shorts wanted one outcome and the longs wanted another, and the shorts are contractually obligated to pay whatever the market rate is.
> 
> The Reddit idiots cannot be “bad guys/market manipulators”
> Without the HF shorts also fitting that definition.
> 
> Stock value has zero to do with “fundamentals” or “intrinsic value”. It’s just supply & demand. Or more clearly: In the short term stock price can be anything anyone wants - a fact that shorts take advantage of daily. Over a long enough time frame the AVERAGE price will roughly reflect fundamentals.
> 
> There are no “good guys or bad guys”, except the regulators that gutted the stock act, and the exchanges that allowed greater than 100% short float.
> 
> Naked (uncovered) Short trades have infinite loss potential. Why have a financial instrument that has no risk because exchanges will protect you from losses? There is a reason retail investors cannot engage in naked shorts.



Spot on.

@chinnybob ,
If you start to pull on that thread and say that what WSB is doing is somehow wrong, it's not only overestimating both their influence (they're not the big buyers) and their responsibility (they're not the ones who came up with 140% of float short)- but it would also lead you to saying that all momentum trading or all commenting on your positions or planned positions is wrong. It's just the way the market exists today: offer and demand, and people hoping that others will join in with them so that their trades go their way.

Maybe you're saying the above is altogether wrong and market movements should only reflect fundamentals...but then there wouldn't be any edge or markets in the first place, and everyone would get the same returns, so things like Hedge funds wouldn't even exist. Not saying I'm against a utopia with less finance and more fairness...but while it's not there, why is it a problem that_ for once_, _some (not even a lot) _small players have been able to make a buck?



Mathemagician said:


> Over a long enough time frame the AVERAGE price will roughly reflect fundamentals.



lmao $TSLA


----------



## chinnybob

mbardu said:


> Spot on.
> 
> @chinnybob ,
> If you start to pull on that thread and say that what WSB is doing is somehow wrong, it's not only overestimating both their influence (they're not the big buyers) and their responsibility (they're not the ones who came up with 140% of float short)- but it would also lead you to saying that all momentum trading or all commenting on your positions or planned positions is wrong. It's just the way the market exists today: offer and demand, and people hoping that others will join in with them so that their trades go their way.
> 
> Maybe you're saying the above is altogether wrong and market movements should only reflect fundamentals...but then there wouldn't be any edge or markets in the first place, and everyone would get the same returns, so things like Hedge funds wouldn't even exist. Not saying I'm against a utopia with less finance and more fairness...but while it's not there, why is it a problem that_ for once_, _some (not even a lot) _small players have been able to make a buck?



1. Whether what someone does is right or wrong isn't affected by the scale of their influence or by what was happening before it. 
2. Buying into a stock because its price is rising strongly (in the hope that the trend continues) is very different from encouraging people to buy it in order to make that happen.
3. I didn't say I had a problem with people making profit, not sure where you got that from

Once again: I'm not on either side, just an interested observer.


----------



## BenjaminW

philkilla said:


> According to WSB, today is the day to go to the fucking next galaxy lmao


To the moon baby!


----------



## mbardu

chinnybob said:


> 1. Whether what someone does is right or wrong isn't affected by the scale of their influence or by what was happening before it.



It can _totally _be affected by what was happening before. Ironically (considering what the aptly-named app is doing), take an imaginary Robin Hood figure. If the rich fleece and mistreat the common folk and then that Robin Hood swoops in to take back what rightfully belongs to the people - that's right. If Robin hood swoops in and randomly fleeces innocent people just because they're a bit more wealthy, that's wrong. So context matters.

Now obviously that's all romanticized.
Here, in a context where hedge funds are trying to fleece the market and take a lot of uncovered risk, they did something wrong and kinda deserve what's coming for them.
As for WSB, it's like an investment club deciding to invest and hold a stock collectively to try and stick it to the big guys by showing that they too can make money. Obviously we all know that's a pipe dream (WSB making money), but I don't think that's fundamentally wrong.
You _may _be able to frame it as "technically wrong market manipulation" with some narrow reading of regulation if you manage to show that WSB is somehow that united market-manipulating entity. But in real life, either the regulators do just that, proving again how the system is RIGGED (because those rules never applied to others, and WSB is far from that united entity), or it just continues on its current path.


----------



## Forkface

stonks gonna hit $69,420.00 next week im sure.


----------



## Randy




----------



## mbardu

Randy said:


> View attachment 89589



Lol this is funny, but if they're trying to push a fake article, at least the "author" should use real tools instead of MS paint.


----------



## spudmunkey




----------



## Steinmetzify

spudmunkey said:


>





This shit killed me IRL


----------



## Drew

mbardu said:


> Again- that's flipping the problem on its head.
> When big bois jump into momo trades or short squeezes, nobody bats an eye, but if it's Reddit and individuals doing it, then suddenly it's market abuse?
> WSB folks are not charity, they're in it to make money, and they're vocal about it. Taking down a hedge fund (not going to happen) would be a nice icing on the cake, sure.
> 
> When funds, also in it to make money sell 140% of the float and are very vocally shouting it from the rooftops it's OK, but not WSB shouting their buying? Are the funds not doing what they're doing "_for the purpose of driving the price of a security_"? Wow! Much market manipulation! Such Market Abuse! Except it's institutions doing it so it's OK? They're also happy to fleece competing hedge funds or the retail investors, you know .
> 
> What kind of selective reverse logic is that?



So, what r/wsb is doing is _more likely than not_ _legal _(more on that later), a couple minor nitpicks here.

1) This may not be what you're saying above (the phrasing is a little unclear, you could be talking about them publicly talking their books, which I agree is shady and SHOULD be illegal), but short selling isn't a strategy intended to drive down a stock's price. It's intended to profit if the price DOES fall, which may seem like a subtle difference, but isn't. It also, like it or not, does promote better market efficiency since it allows you to take an active view of a belief that a stock is overvalued. For comparison, look at markets where you _can't_ short sell - muni bonds, for example - where prices (yields, in this case) do occasionally get a little sticky in rapidly moving news environments.

2) I've probably said this before, but the hedge funds' major mistake here wasn't shorting GME, but rather so many of them getting into such a crowded trade. With 140% short interest, they're definitely at risk of a short squeeze occuring.

3) Price action, and the amount of volume we've seen, suggest that this is no longer a short squeeze. Simply, daily volume has been well in advance of short interest for most of this week. Every time someone buys a share, someone must have sold a share. Arguing that the price is rising because short sellers are trying to buy and everyone else is holding doesn't make sense, because that would result in abnormally _low_ volume, not record high.

4) That _strongly_ suggests that retail investors are making the same mistake hedge funds made, and all piling into a crowded trade. If so, then if it's fair for hedge funds to take it on the chin during a short squeeze, I hope we all agree that it's fair for retail investors to take it on the chin when they buy a security that they know isn't worth what they paid, simply because they're hiping it'll go up before it goes down.

5) I guarantee you that there's a lot of NEW short positions that were opened in the $250-400 range. Long-short managers look for overvalued securities, and I don't think anyone is arguing that GME is appropriately valued right now. The pain point of someone who sold the stock short at $350 is a LOT higher than that of someone who sold it short at $35, and it's going to be awfully hard to move this one materially higher with even _more_ retail trading.

5) Brokerages restricting trading in certain names, at least trading on a cash basis and not margin, IMO are in the wrong here, and will probably see consequences from that, at a minimum lost business.

6) this is a pretty compelling argument that it should be a lot harder to be approved to trade on margin than it is - didn't we learn anything in the 1920s? 

EDIT - oh year, re: legality. If r/wsb was a group of traders who looked at the high short interest and low volume and said, "hey, if GME's price were to start moving up, that could likely trigger a short squeeze," they're in the clear. If they then started talking up the name as a short squeeze candidate to try to get other people people to pile in to push the price up, that's shady but they're still *probably* in the clear - no different than what some of the shadier hedge fund managers do. If they started talking up the stock, but in ways where it wasn't clear they owned shares, or for fundamental and not technical reasons that they didn't think were true but because they wanted more people to buy to drive up the stock price to trigger a short squeeze so they could sell at a profit, that's fraud, that's a classic pump-and-dump, that's illegal no matter who you are, and they're going to be hearing from the SEC.


----------



## mbardu

I wo't reply on most things since we agree by and large but



Drew said:


> So, what r/wsb is doing is _more likely than not_ _legal _(more on that later), a couple minor nitpicks here.
> 
> 1) This may not be what you're saying above (the phrasing is a little unclear, you could be talking about them publicly talking their books, which I agree is shady and SHOULD be illegal), but short selling isn't a strategy intended to drive down a stock's price. It's intended to profit if the price DOES fall, which may seem like a subtle difference, but isn't. It also, like it or not, does promote better market efficiency since it allows you to take an active view of a belief that a stock is overvalued. For comparison, look at markets where you _can't_ short sell - muni bonds, for example - where prices (yields, in this case) do occasionally get a little sticky in rapidly moving news environments.



Although I agree it's good to be able to short, what hedge funds are selling is not strictly what you describe.
They don't strictly borrow to short. They also paint their shorts in a negative light, leverage players like Citron to hype up their trade, participate with priority exposure in the media conversation etc. So the actual _positions _they take are shorts, yes- but their _strategy _is definitely to ensure that those shorts will be profitable, hence making the price fall any way they can.



Drew said:


> So, what r/wsb is doing is _more likely than not_ _legal _(more on that later), a couple minor nitpicks here.
> 
> 3) Price action, and the amount of volume we've seen, suggest that this is no longer a short squeeze. Simply, daily volume has been well in advance of short interest for most of this week. Every time someone buys a share, someone must have sold a share. Arguing that the price is rising because short sellers are trying to buy and everyone else is holding doesn't make sense, because that would result in abnormally _low_ volume, not record high.



Of course there's strictly enough volume daily this week to cover 100% of the shorts _if shorts had infinite money_. Doesn't mean all shorts _have _covered.
Depends entirely what their short basis was- which we don't know. If large players had mass-shorted say at 100$ (which looked _very _tempting), then it would have been pretty nasty for them to exit at ~300$ - which has been give or take the median price for the last 3 days. I suspect we'd have heard about that type of loss like we heard about Melvin's bailout.
That in and of itself doesn't absolutely mean that there are plenty of shorts left. They could have slowly exited over the last 2 weeks, that's for sure.

I just don't know what to make of data from things like Ortex or S3 which still points to significant open shorts as of _today_. Significant as in, sure it's no longer 70M anymore, but it still about 60M, but with a much much higher price on the share now. Maybe those have zero reliability and we'll see in the next few days (and confirm on Feb 9th) that all shorts have already been out since forever. Or maybe all those shorts have 400$ entries and will pay handsomely. But in the meantime it's curious!

As for WSB, for sure a lot of people are going to lose their shirt once it's back to 15$. But I'm surprised the stock is still up 70% today and holding aftermarket. Indicates to me that it could still be a few more days. In that scenario, if new shorts entered Monday/Tuesday around 100$ or below, then they're already hurting. Of course if most shorts entered at 400$, then they're just fine and dandy and the bleeding starts early next session. Did anyone there illegally mislead people in a serious way though? Not that I've seen. Of course if you take at face value something like "buy now, it's going to 69,420" then it's misleading . But most of what I've seen, although 100% on the technical side of the technical<>fundamental spectrum (and it was _definitely _on the spectrum), has been publicly available true information (a short squeeze is likely considering those indicators). So not even getting into the subject of how you'd go after all those users in a 7M subreddit, I just don't believe they've done anything wrong, really.


----------



## Mathemagician

@Drew always enjoy reading your posts man. 

I agree on all the main points.

I agree that shorting isn’t inherently evil. Same way saying “that business sucks” isn’t evil. 

Ex: Anyone that shorted Enron was right, fuck that company right?

But then telling everyone a hurting business is doomed to fail when they are still solvent and limping along in the hopes of restricting their access to capital markets and making them fail is absolutely a dick move. (Can’t issue shares to raise cash if the markets think you’re worth zero). 

So the short trade got crowded. And I think you mean people shorting at $35 are worse off than those shorting at $350? As it rises the loss grows, maybe I’m misreading it. 

The short trade goal was never sharing info, just manipulating the price downward for the short trade to be profitable. If it goes up a week later no skin off the shorts back. 

The brokerages straight up caving to protect hedge funds and clearing houses that didn’t have the liquidity to deliver assets is a much larger issue. “Failure to Deliver” leads to massive fines. 

But outside of making shorts “illegal” - which I don’t support, they will need to regulate the naked shorting and seemingly infinite margin credit HF’s had that shouldn’t have been possible. 

As far as the “narrative” of David vs. Goliath: The hedge fund managers are still going to talk to each other at dinner and talk their books to the institutional money. Leaving retail to park their shit $ from their minimum wage jobs (that don’t even match inflation) in index funds. There is a reason a lot of idiots said “fuck it heres $20” with their cigarette money. So if HF’s can pile on a name discussed privately, then retail idiots can pile on a name discussed publicly. 

Key: Not one of them ever hyped false fundamentals, it was a volume trade. 

What I think is hard for some people to believe/accept is that there are hundreds of funds whose sole job is to fish out momentum/squeeze/volume trades. Their white papers are all about how good they are at momentum trading, etc. That’s a real thing that clients pay 2%/20% for. (2% annual management fee, then 20% of gains).


----------



## mbardu

spudmunkey said:


>


----------



## Drew

mbardu said:


> I wo't reply on most things since we agree by and large but
> 
> 
> 
> Although I agree it's good to be able to short, what hedge funds are selling is not strictly what you describe.
> *1) They don't strictly borrow to short. *They also paint their shorts in a negative light, leverage players like Citron to hype up their trade, participate with priority exposure in the media conversation etc. So the actual _positions _they take are shorts, yes- *but their strategy is definitely to ensure that those shorts will be profitable,* hence making the price fall any way they can.
> 
> 
> 
> *2) Of course there's strictly enough volume daily this week to cover 100% of the shorts if shorts had infinite money.* Doesn't mean all shorts _have _covered.
> Depends entirely what their short basis was- which we don't know. If large players had mass-shorted say at 100$ (which looked _very _tempting), then it would have been pretty nasty for them to exit at ~300$ - which has been give or take the median price for the last 3 days. I suspect we'd have heard about that type of loss like we heard about Melvin's bailout.
> That in and of itself doesn't absolutely mean that there are plenty of shorts left. They could have slowly exited over the last 2 weeks, that's for sure.
> 
> *3) I just don't know what to make of data from things like Ortex or S3 which still points to significant open shorts as of today. Significant as in, sure it's no longer 70M anymore, but it still about 60M,* but with a much much higher price on the share now. Maybe those have zero reliability and we'll see in the next few days (and confirm on Feb 9th) that all shorts have already been out since forever. Or maybe all those shorts have 400$ entries and will pay handsomely. But in the meantime it's curious!
> 
> As for WSB, for sure a lot of people are going to lose their shirt once it's back to 15$. *4) But I'm surprised the stock is still up 70% today and holding aftermarket. Indicates to me that it could still be a few more days.* In that scenario, if new shorts entered Monday/Tuesday around 100$ or below, then they're already hurting. Of course if most shorts entered at 400$, then they're just fine and dandy and the bleeding starts early next session. Did anyone there illegally mislead people in a serious way though? Not that I've seen. Of course if you take at face value something like "buy now, it's going to 69,420" then it's misleading . But most of what I've seen, although 100% on the technical side of the technical<>fundamental spectrum, has been publicly available true information (a short squeeze is likely considering those indicators). So not even getting into the subject of how you'd go after all those users in a 7M subreddit, I just don't believe they've done anything wrong, really.



Ok, but a couple quick hit observations:

1) first paragraph - if they're not borrowing shares to short them, what ARE they doing? Also, in what world is someone's strategy, whether short or long, NOT to be profitable?

2) So, you think there are funds out there with short positions that they opened at much lower prices, that are trying to ride this out, because they can't _afford_ to cover? The window of position sizes where someone could be short, not afford to cover, but be able to make margin calls to keep their net position positive is very, very, very small. (EDIT - this isn't the time for sarcasm or humor, I suppose - there's no way you can maintain a position you can't afford to close overnight. Retail, hedge fund, whatever - if your account balance starts approaching negative, you start getting margin calls, and if you can't meet them, whether you're you or me or a famous hedge fund manager, your position _will_ be closed).

3) I keep telling you, while they supplement that with filing updates, that's still based off exchange data, exchange data is only published every two weeks, on an additional week lag, and accordingly trying to monitor a _rapidly_ moving picture with short interest data is like trying to drive a car on a highway by watching your rear view. It does't tell you anything about what the short positions ARE, and anyone who opened a short position on Wednesday or Thursday morning i very likely at a net profit right now.

4) This is what would concern me the most, if I was trading GME right now. After some exchange/brokerage pushback on Thursday, where the stock dropped on a decline in retail volume, it was off to the races again today... and GME basically just treaded water, bounced around a lot but didn't really move in a pronounced manner all day. If the price of the stock spent most of the day moving sideways, that implies buyers and sellers are pretty closely balanced.

Serious question, for anyone who disagrees with me on this, that this is no longer a short squeeze - do you really see any further upside in GME?



Mathemagician said:


> But then telling everyone a hurting business is doomed to fail when they are still solvent and limping along in the hopes of restricting their access to capital markets and making them fail is absolutely a dick move. (Can’t issue shares to raise cash if the markets think you’re worth zero).
> 
> So the short trade got crowded. And I think you mean people shorting at $35 are worse off than those shorting at $350? As it rises the loss grows, maybe I’m misreading it.


In reverse order - yeah, someone who shorted at $35/share is in a world of hurt night now, whereas someone who shorted at $350 share is, ex financing at least, up $25/share right now.

I also don't know if I agree with you on the capital markets access thing - cost of capital is, well, an insanely complex subject, but at the end of the day, is a firm _worse_ off if someone publishes a research note saying they appear to be approaching insolvency and, say, estimating recovery value on debt, vs taking a short position and selling their stock short? If you think the answer is yes, and I'd say, sure, at the margins, the second person is showing more conviction, is that enough to offset the fact that the former is only risking their reputation, while the latter is risking potentially a LOT of capital?

In a healthy, functioning market, yu get better price discovery when people can short positions they feel are over-valued, rather than simply opting not to hold them and their "bet" is capped at the weight that security holds in that manager's benchmark. For a large cap equity manager benchmarked against the S&P500, your average position size in the index is going to be about 0.2%, so if you really don't like a name, the best you can do is not buy it, giving you a max active weight of about -0.2% on average. Allowing managers to short tends to lead to fewer overvalued companies simply because it's difficult to take a meaningful (at the level of your portfolio) position against a name otherwise.

By the same token, in a healthy, functioning market, you get better price discovery yet again if managers who short a name and are wrong, take it on the chin and lose money, potentially a lot of money. It provides a strong incentive to make sure you're right.

Now, I've noted, repeatedly, that I think the funds in question mostly fucked up by overcrowding the trade. But, is Gamestop _as a company_ in any better position today than they were two months ago? Has their business turned around in any material way? Are they likely to be more profitable than expected, in any fundamental, intrinsic way? Or is this just purely a product of market technicals, unmoored from the economic fundamentals of the company itself?

I think the answer here is pretty clear, and hey, that may not be "fair" to hedge funds getting whacked by Reddit right now... but the markets never claimed to be fair, other funds I'm sure are positioning to take advantage of the inevitable price collapse here, and I mostly just feel bad that a whole lot of retail investors are going to get hosed here. And, selfishly - while i'm a bond professional, not a stock professional - I don't like the fact that they're ultimately going to blame "Wall Street" for the fact they lost money, even though no one involved really thinks Gamestop should be worth even remotely close to what it's trading at today.

So, the sole contribtion I wanted to make to this conversation, distilled down to a single sentence, is this - "Be _very_ cautious of the investment thesis that a short squeeze will push GME materially higher than it is today, because if you're looking at short interest data, you're looking at data that's both 1) lagged, and 2) aggregated with no information about the various position's open price, which means it's extremely difficult to use as a short term trading indicator in a rapidly moving market. "

Or, maybe put more simply, if you have an investment thesis, and you have a lot of money riding on it, be sure you're paying as much attention to evidence that you're _wrong,_ as well as that you're right.


----------



## Drew

Mathemagician said:


> [
> What I think is hard for some people to believe/accept is that there are hundreds of funds whose sole job is to fish out momentum/squeeze/volume trades. Their white papers are all about how good they are at momentum trading, etc. That’s a real thing that clients pay 2%/20% for. (2% annual management fee, then 20% of gains).


Also, yeah, I think there are three major themes going on I can see in trading right now: 

1) Retail investors piling in on what I guess I'll call a "meme" trade." 
2) technical/algo strategies making momentum trades
3) Long/short hedge funds taking either underlying or synthetic short positions, positioning to take advantage of a price decline.


----------



## Mathemagician

That’s what I’m saying in regards to shorting being allowed. It adds value to market price information and lets people who are willing risk capital on an idea be rewarded for being right. That’s very good. 

Also and I cannot stress this enough as a fourth point affecting pricing:

4) don’t forget the price obfuscation by Robinhood, Schwab, and others preventing retail purchases, while lowering retail sale orders but STILL allowing institutional investors to enter both purchases and sales. essentially clearing houses behind them demanded it. 

They turned down the demand faucet to allow small volume trades to fish lower. 

The heads of multiple brokerages and exchanges admitted directly that due to everyone’s inability to cover the losses they decided to cut retail off at the knees. 

2-5 share trade limits continued to hamper movement through Friday. 

That’s what really bothers me the most. If you don’t like a rules outcome, you can change it going forward. In this case the rules were changed mid-game. 

The long term issue: Integrity of markets comes into question when brokers and clearinghouse can screw/slow down your winning trade, and the head can just declare “GME is worth $17 and that when I’ll allow trading again”. 

Get the average person to believe it’s not a “casino/rigged” now. 

For now fallout won’t matter because the shorts got help that would not be afforded to a retail investor so it’ll be presented as a win. 

Really curious to see what kinds of updates to risk controls are required in the future.


----------



## mbardu

Drew said:


> Ok, but a couple quick hit observations:
> 
> 1) first paragraph - if they're not borrowing shares to short them, what ARE they doing? Also, in what world is someone's strategy, whether short or long, NOT to be profitable?



Of course they would borrow to short...that's the entire thing we're talking about.
You just literally said "their strategy is not intended to drive down a stock's price", while it clearly is. Just clarifying that point.
They're not waiting for the stock price to fall, they are actively lobbying for its fall through media, short hit pieces, or through the very act of shorting and putting pressure on the company and its stock- which in turn makes it impossible for the name in question to get funding (hence perpetuating a vicious circle).



Drew said:


> 2) So, you think there are funds out there with short positions that they opened at much lower prices, that are trying to ride this out, because they can't _afford_ to cover? The window of position sizes where someone could be short, not afford to cover, but be able to make margin calls to keep their net position positive is very, very, very small.
> 
> 3) I keep telling you, while they supplement that with filing updates, that's still based off exchange data, exchange data is only published every two weeks, on an additional week lag, and accordingly trying to monitor a _rapidly_ moving picture with short interest data is like trying to drive a car on a highway by watching your rear view. It does't tell you anything about what the short positions ARE, and anyone who opened a short position on Wednesday or Thursday morning i very likely at a net profit right now.
> 
> 4) This is what would concern me the most, if I was trading GME right now. After some exchange/brokerage pushback on Thursday, where the stock dropped on a decline in retail volume, it was off to the races again today... and GME basically just treaded water, bounced around a lot but didn't really move in a pronounced manner all day. If the price of the stock spent most of the day moving sideways, that implies buyers and sellers are pretty closely balanced.



Regarding shorts having covered already or not- we all see that the latest comprehensive exchange data is old. No need to reiterate.
People like S3 or Ortex do pretend that they are able to extrapolate that at a finer daily granularity with filings and whatever broker or clearing data they can get, and based on that they are still showing very significant short interest even now. You seem confident at 100% that they cannot know that, and that all shorts have covered. Fair enough. Maybe their methodology is junk (like looking in the rear-view mirror) and you know better. That's why I prefaced the above by saying I don't know what they're worth. And yeah, maybe it's moot anyway because maybe there are shorts, but those are shorts that entered at 400$. I said as much above.

On my end I just don't pretend I know 100% either way because I'm not in those funds' books; so I cannot know for sure.
Just interested in following what happens next.

Similarly, you seem entirely convinced that all large short actors are acting in a 100% rational and well risk-managed way.
That anyone with a large position would have exited their shorts in an orderly fashion. Again, you are free to be 100% convinced that way- up to you. Strange, considering the very current example of Melvin's poor risk management that required an emergency bailout of 3 Billion that would fly in the face of that generalization - but OK. As far as I'm concerned, I'm not pretending to know either way and just have the popcorn out for what happens next.

As for the rest, I am not pretending I know that GME necessarily has a lot of room to go higher from there. In fact I keep saying a lot of people are going to lose a bunch when it drops to 15$ relatively soon. That piece at least if fairly certain!

Just like your point about intrinsic fundamental value of $GME? What does that have to do with the discussion? There not a single dumb dumb on WSB who thinks $GME is worth over 20$ on a P/E basis. This entire price action is 100% a technical speculative move. So there's no debate there. But then again, there are very few names today who are worth anything close to their valuations if you look at their fundamentals (except $MU, amirite  ). It's just monopoly money at that point.

As far as I'm concerned, I'm just in there for the entertainment value, and I don't think we've necessarily seen everything yet- or know everything. Maybe it's just wishful thinking and liking fireworks, but we'll see!
Also, that chart is nice: https://pbs.twimg.com/media/Es2ABlnVoAQ3OTB?format=png&name=900x900


----------



## mbardu

Mathemagician said:


> Get the average person to believe it’s not a “casino/rigged” now.



It's not even a casino. Not even the lottery.
Even though majority of people lose in a casino, there are still _some_ winners in the casino, and they're allowed to take their money home.
Here it's like you said, the house is changing the rules mid game when they see those rare winner making money. It's just robbery.


----------



## Mathemagician

And that’s the exact kind of retail “fear” regulators are going to be looking at. And typically the smart money can look clean. But the smart money was “wrong” first. And then the retail money came in and “won” a very public information battle. 

So how do you apply blame in that scenario, while leaving HF’s alone to continue business as usual? Finance professors having a field day talking about “this is what gamma means” right now, lol.


----------



## mbardu

Mathemagician said:


> And that’s the exact kind of retail “fear” regulators are going to be looking at. And typically the smart money can look clean. But the smart money was “wrong” first. And then the retail money came in and “won” a very public information battle.
> 
> So *how do you apply blame in that scenario*, while leaving HF’s alone to continue business as usual? Finance professors having a field day talking about “this is what gamma means” right now, lol.



That's fairly straightforward.
Usually you apply blame to the little retail investors, because they're the ones who are not able to fight back that blame, contrary to billionaires managers.
I'm actually surprised that this time around _some parts_ of congress, _some _media and _some _billionaires (like Chamath) are actually taking the side of the longs this time around.


----------



## Drew

mbardu said:


> Regarding shorts having covered already or not- we all see that the latest comprehensive exchange data is old. No need to reiterate.
> People like S3 or Ortex do pretend that they are able to extrapolate that at a finer daily granularity with filings and whatever broker or clearing data they can get, and based on that they are still showing very significant short interest even now. You seem confident at 100% that they cannot know that, and that all shorts have covered. Fair enough. Maybe their methodology is junk and you know better. That's why I prefaced the above by saying I don't know what they're worth. And yeah, maybe it's moot anyway because maybe there are shorts, but those are shorts that entered at 400$. I said as much above.


No, the point I'm trying to make is a little more nuanced, and maybe I'm not getting it across cleanly. 

These third party aggregators can probably do a pretty good job monitoring short interest in between FINRA reporting filings, based on regulatory filings whenever a hedge fund takes or closes a reportably large position. As such, they're probably providing a service with some value. But that implies two things - one, even these intra-FINRA updates are going to be lagged, because the process of reporting to regulators, and those regulators then publishing it, is not instantaneous, and two, it doesn't tell you anything about positions that aren't large enough to require reporting. That's the first major caveat. 

The second, is the aggregate short interest position is useful from a long-term perspective, in a stable market. In a market for a security that's up 1,500% in one month, though, it's less useful without some information on how _seasoned_ those shorts are, how long theyve been open. Anyone who shorted at $19 a share is now down -1,500%. Anyone who shorted at $300 is down 8%. Anyone who shorted at $450 is _up _28%. Without knowing anything about the composition of those short positions, short interest alone, even if it was perfectly accurate, is not going to be a good predictor of investor behavior, because those three hypothetical positions would trigger radically different responses. 

When using data in an investment thesis, it's _incredibly_ important to know the limits of that data. 



mbardu said:


> Similarly, you seem entirely convinced that all large short actors are acting in a 100% rational and well risk-managed way.


There's something about having hundreds of millions of dollars at stake that very quickly weeds out irrationality. Melvin lost quite a lot on that trade. The flip side of their getting a $2.75 billion capital infusion, though, is an arms-length third party thought giving them $2.75 billion was a good investment, and that if that capital infusion happened on 1/25, when GME was trading between $80 and $140 a share, then they're pretty clearly no longer short, or they'd have needed further bail outs. 

I'm just saying, be VERY careful what information you're choosing to exclude from your investment thesis. 



Mathemagician said:


> And that’s the exact kind of retail “fear” regulators are going to be looking at. And typically the smart money can look clean. But the smart money was “wrong” first. And then the retail money came in and “won” a very public information battle.
> 
> So how do you apply blame in that scenario, while leaving HF’s alone to continue business as usual? Finance professors having a field day talking about “this is what gamma means” right now, lol.


Don't get me wrong, I agree wit you on Robinhood and Interntional brokers, though again, I think the evidence is pretty good that the known shorts were closed by then. 

But, I don't think it's fair to close the book on this "battle," until GME stabilizes again at something akin tp long term intrinsic value. And, if when everything is said and done, two hedge funds lost a couple billion when retail money pushed GME up to the stratosphere, but then a bunch of other funds came in and made billions more shorting GME at a wildly retail-inflated price, and retail investors by and large walked away with losses in the 95% range... That's kind of the outcome I'm seeing here, and I don't think ANY of us like it.


----------



## mbardu

Drew said:


> No, the point I'm trying to make is a little more nuanced, and maybe I'm not getting it across cleanly.
> 
> These third party aggregators can probably do a pretty good job monitoring short interest in between FINRA reporting filings, based on regulatory filings whenever a hedge fund takes or closes a reportably large position. As such, they're probably providing a service with some value. But that implies two things - one, even these intra-FINRA updates are going to be lagged, because the process of reporting to regulators, and those regulators then publishing it, is not instantaneous, and two, it doesn't tell you anything about positions that aren't large enough to require reporting. That's the first major caveat.
> 
> The second, is the aggregate short interest position is useful from a long-term perspective, in a stable market. In a market for a security that's up 1,500% in one month, though, it's less useful without some information on how _seasoned_ those shorts are, how long theyve been open. Anyone who shorted at $19 a share is now down -1,500%. Anyone who shorted at $300 is down 8%. Anyone who shorted at $450 is _up _28%. Without knowing anything about the composition of those short positions, short interest alone, even if it was perfectly accurate, is not going to be a good predictor of investor behavior, because those three hypothetical positions would trigger radically different responses.
> 
> When using data in an investment thesis, it's _incredibly_ important to know the limits of that data.



You're arguing a straw man here.
If you actually read my post that you quoted you'll see that I 100% acknowledge that before you even mention if, specifically by saying that all those shorts _could _be big winners with entries at 400$ for future exits at 15$. We just don't know.

You were the one arguing that all or most of the shorts were out of their positions and seemed pretty sure of that. If you are now taking that back and saying that there may still be a considerable amount of shorts...we just don't know when they were entered and if they're profitable, then fine by me. It's what I've been saying all along 



Drew said:


> There's something about having hundreds of millions of dollars at stake that very quickly weeds out irrationality. Melvin lost quite a lot on that trade. The flip side of their getting a $2.75 billion capital infusion, though, is an arms-length third party thought giving them $2.75 billion was a good investment, and that if that capital infusion happened on 1/25, when GME was trading between $80 and $140 a share, then they're pretty clearly no longer short, or they'd have needed further bail outs.
> 
> I'm just saying, be VERY careful what information you're choosing to exclude from your investment thesis.
> 
> 
> Don't get me wrong, I agree wit you on Robinhood and Interntional brokers, though again, I think the evidence is pretty good that the known shorts were closed by then.
> 
> But, I don't think it's fair to close the book on this "battle," until GME stabilizes again at something akin tp long term intrinsic value. And, if when everything is said and done, two hedge funds lost a couple billion when retail money pushed GME up to the stratosphere, but then a bunch of other funds came in and made billions more shorting GME at a wildly retail-inflated price, and retail investors by and large walked away with losses in the 95% range... That's kind of the outcome I'm seeing here, and I don't think ANY of us like it.



The thing is I'm not talking only about Melvin. I highly doubt that they were holding 140% short by themselves. I highly doubt they would have been the only ones, and it's much more likely there were a bunch of either copycats out there, or late-comers who saw that juicy 100$ price tag as a juicy opportunity to short (at what was seen as an even higher probability of win considering how far removed from reality the price has become).
I'm just using Melvin as an example. You are saying that funds have strict risk management practices and would never allow such egregious losses to occur, or to keep losing positions open for that long. Well it's just what Melvin did, and they disintegrated a quarter of their AUM on one trade.
Maybe Melvin learned their lessons? Maybe they couldn't have taken further shorts even if they wanted to? Sure.

But Melvin is hardly the only player who could have kept or entered shorts are they? You said it yourself. Shorting at 100$ looked like an _extremely _high R/R ratio at the time, and Melvin is not the only hedge fund out there.


----------



## Drew

mbardu said:


> You're arguing a straw man here.
> If you actually read my post that you quoted you'll see that I 100% acknowledge that before you even mention if, specifically by saying that all those shorts _could _be big winners with entries at 400$ for future exits at 15$. We just don't know.
> 
> You were the one arguing that all or most of the shorts were out of their positions and seemed pretty sure of that. If you are now taking that back and saying that there may still be a considerable amount of shorts...we just don't know when they were entered and if they're profitable, then fine by me. It's what I've been saying all along


No, I'm evidently still not making myself clear. 

The _aggregate_ short position is only useful when you have a pretty good indication of what price the shorts were opened AT. Do either of those services publish a weighted average price, to go with the total shares held short? That would be extremely useful to know right now. Someone who's been short 48 hours will have a very different response to a $100 spike in the share price at the open to someone who's been short five days, in a market moving this fast.

Also, I'm not asking you for hypotheticals here. I'm asking you what you _think_ is occurring. Yes, you admitted we don't know all those short positions were opened at $400. But, you clearly don't _think_ that, and you think that the high short interest you see reported is at least substantially composed of hedge funds freaking out at huge losses, and if Reddit can just keep the pressure up, there's more money to be made.

I meanwhile, am saying I don't think that's likely.

1) Melvin covered. They have filings that indicated they did, they had ivestors contribute additional caital who haven't had to follow up with further capital, and the day they closed their short was after the price of GME more than doubled over the weekend. It's doubled a couple times since then and they haven't sought more capital. The probability that they're still short, is extremely low.
2) No other hedge fund has had to seek additional capital, or reported substantial losses here, aside from the other prominent short that also reported closing their position down 100% whose name is eluding me at the moment and I don't care enough to look up. If there were a whole bunch of funds with badly underwater shorts, woefully underwater shorts, someone else would have imploded or phoned a proverbial friend.
3) We don't have a clear picture what short interest in GME currently _is_. My hunch is it dipped substantially, but by the 27th through today, came back on as GME stopped its exponential rise and firms became more willing to step in and take new postions. That's just a guess... But for someone opening at $350 to rack up a -100% loss, they'd need to close out at over $700. I could be dead wrong here, but I don't think there's enough depth in the market to push it that high.

All in, I think the original short squeeze is over, the current price action is on the back of retail traders, as the upwards momentum is stalling out I suspect more aggressive short-enabled funds are starting to take positions, and I'm not sure what could happen to push the price far enough up to hurt this new wave of positions. I don't _know_ all of this, but it's an educated guess based on pretty good information.

Now, rather than saying I very well could be right but we just don't know, what do you _think _is going to happen? If you don't have an opinion, you wouldn't have started this thread or be posting in it now.


----------



## Drew

In other news, Robinhood is being investigated by the SEC for restricting trading, and had to raise more than a billion in new capital from lines of credit and outside investors to meet clearinghouse requirements thanks to this surge. I've always thought they were shady as fuck - the first few years they were in existence they stayed afloat by selling customer orders to high frequency traders - so I'm not posting this feeling at all bad for them, but I think it could be a horserace for the next shoe to drop, between retail investors going long GME at ludicrously high levels, and the online brokerages who have been extending them credit.


----------



## mbardu

Drew said:


> No, I'm evidently still not making myself clear.
> 
> The _aggregate_ short position is only useful when you have a pretty good indication of what price the shorts were opened AT. Do either of those services publish a weighted average price, to go with the total shares held short? That would be extremely useful to know right now. Someone who's been short 48 hours will have a very different response to a $100 spike in the share price at the open to someone who's been short five days, in a market moving this fast.
> 
> Also, I'm not asking you for hypotheticals here. I'm asking you what you _think_ is occurring. Yes, you admitted we don't know all those short positions were opened at $400. But, you clearly don't _think_ that, and you think that the high short interest you see reported is at least substantially composed of hedge funds freaking out at huge losses, and if Reddit can just keep the pressure up, there's more money to be made.
> 
> I meanwhile, am saying I don't think that's likely.
> 
> 1) Melvin covered. They have filings that indicated they did, they had ivestors contribute additional caital who haven't had to follow up with further capital, and the day they closed their short was after the price of GME more than doubled over the weekend. It's doubled a couple times since then and they haven't sought more capital. The probability that they're still short, is extremely low.
> 2) No other hedge fund has had to seek additional capital, or reported substantial losses here, aside from the other prominent short that also reported closing their position down 100% whose name is eluding me at the moment and I don't care enough to look up. If there were a whole bunch of funds with badly underwater shorts, woefully underwater shorts, someone else would have imploded or phoned a proverbial friend.
> 3) We don't have a clear picture what short interest in GME currently _is_. My hunch is it dipped substantially, but by the 27th through today, came back on as GME stopped its exponential rise and firms became more willing to step in and take new postions. That's just a guess... But for someone opening at $350 to rack up a -100% loss, they'd need to close out at over $700. I could be dead wrong here, but I don't think there's enough depth in the market to push it that high.
> 
> All in, I think the original short squeeze is over, the current price action is on the back of retail traders, as the upwards momentum is stalling out I suspect more aggressive short-enabled funds are starting to take positions, and I'm not sure what could happen to push the price far enough up to hurt this new wave of positions. I don't _know_ all of this, but it's an educated guess based on pretty good information.
> 
> Now, rather than saying I very well could be right but we just don't know, what do you _think _is going to happen? If you don't have an opinion, you wouldn't have started this thread or be posting in it now.



Not sure I get your last point. I opened the thread because I think it's an interesting discussion. You're asking why I did it but like I replied earlier: I'm mostly here for the discussion + the popcorn value. One thing I'm not going to do is pretend which way it's going to go, because I just don't have enough data.

You say "But, you clearly don't _think_ that, and you think that the high short interest you see reported is at least substantially composed of hedge funds freaking out at huge losses, and if Reddit can just keep the pressure up, there's more money to be made.", but nope - your putting words in my mouth here. I don't think one way or the other and I acknowledge that today we _cannot _know. It's actually very likely most WSB users will have huge losses. At least /u/dfv was wise enough to cash out 14M of his 50M.

Your 1/2/3 scenario (itself being a hypothetical that you seem to be against...) is internally consistent true, and could match the evidence we're seeing. But you're making a lot of assumptions too that you're not acknowledging, and other scenarios could lead to the same observable evidence.

Say- It could be that Melvin is 100% out for sure.
That's actually likely.

But it could be that a bunch of other funds jumped into the short at 100$ (you said yourself it looked quite juicy) and are now starting to feel the pain at 300$. Let's say some of them having to liquidate some of their other positions (like Melvin did BABA) to fund their short losses, somehow contributing to today's counterintuitive market drop? It's not guaranteed they would have to go to a third party like Citadel. Maybe they're bigger, maybe they have enough other positions to sell I don't know. Even if some others were to seek support, maybe - but even for Melvin it was not reported instantly either when they did. maybe they're struggling to find such a bailout? So there's really no reason to think we have a comprehensive idea of who's short just because there no public information of significant loss or bailout out there just yet. Who would go ahead and volunteer info about their losses if not absolutely forced to? Nobody likes to show losses in this industry.

It could be that someone opened a short ~250 today when it looked like it was definitely tanking. It definitely looked like repeat of yesterday that may not have stopped at 100 this time. Yet the stock finished at 320 and may very well be at 500 after 1 hour of trading on Monday. After all, it was at 500$ 30 hours ago, there will be media blitz on the topic this weekend, it's end of month paychecks plus stimmy, so many people can find 400/500$ to drop on a stock. 2020 has shown us the ridiculous amount of random retail volume you can get nowadays. Those 250$ would also start to hurt if that were the case. And from what we observe, it's just as possible as your scenario.

We know there's short interest, we just don't know what it's composed of - at least now we agree on that; and that's obviously the big driver of what happens next.
What I find interesting is that you keep saying things that amount to "no fund would get in such a bad position", yet acknowledge that:

already 2 funds (that we're aware of) + Citron have done just that and paid the price
you yourself would have thought it a good idea to short after the GME spike
there was up to 140% short (and likely still over 100% even _today_), so it's not like the idea of shorting was limited in time, in scope, or in who played/plays the short game
Again, your scenario is possible, but is not the only one possible.
If it does happen like you said, I'll acknowledge the good hunch 

As far as I'm concerned, I'm not going to say I know for sure. Again- here for the entertainment value, and sitting on a grand total of one share purchased at about 100$ (I mean you gotta do it...it's history in the making!).

Regardless of which way it goes though, I think it's eye opening to see some of the blatant double standards in the industry brought to light as part of that rare event.


----------



## mbardu

Drew said:


> In other news, Robinhood is being investigated by the SEC for restricting trading, and had to raise more than a billion in new capital from lines of credit and outside investors to meet clearinghouse requirements thanks to this surge. I've always thought they were shady as fuck - the first few years they were in existence they stayed afloat by selling customer orders to high frequency traders - so I'm not posting this feeling at all bad for them, but I think it could be a horserace for the next shoe to drop, between retail investors going long GME at ludicrously high levels, and the online brokerages who have been extending them credit.



Oh yeah RobinHood is Ded.
I'm half of a mind to personally lobby for people to leave the platform just out of spite 

Their app sucks and you can get free trades elsewhere anyway.


----------



## Forkface

in any case, i bought 13 shares of GME last week, mainly for the memes. but if this shit actually hits as hard as some people are saying, I'm getting myself a Private Stock PRS fuck it.


----------



## jaxadam

Forkface said:


> I'm getting myself a Private Stock PRS fuck it.



I think you should just do that anyway.


----------



## Xaios

So, turns out one of my coworkers bought 256 shares of GME at $30/share. Yeah, if he plays this smart, he's gonna make a boatload. Heck, if he got out now, he'd still have made one.


----------



## BenjaminW

Me: Wants to start investing because my brother and our friends are all in on it

Also me: Too much of a bitch to invest and possibly lose money despite me lurking WSB on the regular and enjoying all the risky moves


----------



## mbardu

Xaios said:


> So, turns out one of my coworkers bought 256 shares of GME at $30/share. Yeah, if he plays this smart, he's gonna make a boatload. Heck, if he got out now, he'd still have made one.


----------



## Forkface

Xaios said:


> So, turns out one of my coworkers bought 256 shares of GME at $30/share. Yeah, if he plays this smart, he's gonna make a boatload. Heck, if he got out now, he'd still have made one.


that is aproximately 9 to 10 private stock prs's depending on how pimp you go with specs.


----------



## narad

Xaios said:


> So, turns out one of my coworkers bought 256 shares of GME at $30/share. Yeah, if he plays this smart, he's gonna make a boatload. Heck, if he got out now, he'd still have made one.



Though how much does he have to pay in tax if he has to dump that in the near future, as presumably he will? I don't do short term bets so I'm not familiar the capital gains tax structure.


----------



## spudmunkey

https://i.imgur.com/0ERrDyG.gifv


----------



## TimSE

I'm all in on GME. $9k

Just hold brothers, hold! The longer the masses hold, the more this will go up when the squeeze starts getting squoze. 

This could see insane spikes next week, BUT it might take longer! Its a game of chicken now. Whoever blinks first, loses.

DIAMOND HANDS HOLD


----------



## MrWulf

Everyone is buying truckload of shares and im like "i hope i get a decent return with my 2 shares"


----------



## r3tr0sp3ct1v3

I bought 32 shares Monday at a dip and am just watching. 

My accountant brother keeps trying to tell me to sell and I am like

APE TOGETHER STRONK and spam him with emojis. He has since stopped wanting to talk about it.


----------



## MrWulf

I might try to buy one more share or two during next week via WeBull or Merrill Edge but that's probably it for me. It is an exciting time for sure. I have no delusion of becoming a millionaire (and in fact I'm bracing for loss) but in the end i hope i can get some decent return to fund some stuffs. Dont have to be a lot.


----------



## ikarus

Is it still worth to buy into this? Also where do you guys buy?


----------



## jaxadam

This could revolutionize everything... imagine a GameStop on every corner, selling used games, Mocha Lattes, CBD oil, and cell phones. The future is here!


----------



## Shoeless_jose

Correct me if I'm wrong but are hedge funds still not just other peoples money these guys are losing??


----------



## Avedas

I got into GME during a stretch of boredom at work late last year.

Let's just say if I sold right now, Rick Toone could fill my guitar rack.

But I'm not fucking selling. My cost basis is quite low so I don't really care if this thing drops back to $17 like that ass from Interactive Brokers said it should (yes, this entire thing could still blow up, oh well). I'm only disappointed that I'm forced to use his brokerage.


----------



## Demiurge

jaxadam said:


> This could revolutionize everything... imagine a GameStop on every corner, selling used games, Mocha Lattes, CBD oil, and cell phones. The future is here!



While I know that people say that this technically does not save GameStop from their eventual fate, if the company can't find a way to leverage all of this national attention into _something, _then they kind of deserve the humiliation.


----------



## budda

Dineley said:


> Correct me if I'm wrong but are hedge funds still not just other peoples money these guys are losing??



Good question.


----------



## narad

Avedas said:


> I got into GME during a stretch of boredom at work late last year.
> 
> Let's just say if I sold right now, Rick Toone could fill my guitar rack.
> 
> But I'm not fucking selling. My cost basis is quite low so I don't really care if this thing drops back to $17 like that ass from Interactive Brokers said it should (yes, this entire thing could still blow up, oh well). I'm only disappointed that I'm forced to use his brokerage.



C'mon. I want to see a Rick Toone double neck NGD here.


----------



## r3tr0sp3ct1v3

I think the whole thing is very interesting and glad to be a part of it. 2008 was a bad year for my parents. Hedgies can eat my bunghole.


----------



## mbardu

budda said:


> Good question.





Dineley said:


> Correct me if I'm wrong but are hedge funds still not just other peoples money these guys are losing??



Correct, but typically not small retail investor's money.
Not only do you need a pretty sizeable $$$ to buy-in, funds like Melvin even have "competition" to be able to get in.
Plus the people owning (and to lesser extent working for) the fund have $$$ to gain if the fund succeeds of course.


----------



## mbardu

r3tr0sp3ct1v3 said:


> I bought 32 shares Monday at a dip and am just watching.
> 
> My accountant brother keeps trying to tell me to sell and I am like
> 
> APE TOGETHER STRONK and spam him with emojis. He has since stopped wanting to talk about it.



What emojis exactly?
Did you spam a bunch of rockets and diamond hands?
If not maybe he didn't get the message? 
Worse came to worse maybe try a couple of WSB meme gifs?
If that doesn't work, I guess he's too far gone.


----------



## penguin_316

I’m in $5k, it it goes boom...it’s all good. I’m really just out for blood. The things that have been done for years unchecked need to come to an end.

They aren’t just naked shorting one stock, this is a process repeated over and over in markets across the globe. Destroying businesses/economies and their employees livelihoods.

I find their tears laughable, and honestly I fully expect them to continue using every form of manipulation available to avoid the incoming squeeze.

I think I might just hold a few days or so, maybe years. I have time.

Not financial advice, never trade with emotions and all that jazz.


----------



## TimSE

ikarus said:


> Is it still worth to buy into this? Also where do you guys buy?



You could, but I wouldn't unless youre willing to do a lot of homework this weekend about whats really going on here, and what everyone is expecting this coming week. Things will be CRAZY and you are definitely more are risk of losing than gaining, if you don't know what is happening.


----------



## ikarus

TimSE said:


> You could, but I wouldn't unless youre willing to do a lot of homework this weekend about whats really going on here, and what everyone is expecting this coming week. Things will be CRAZY and you are definitely more are risk of losing than gaining, if you don't know what is happening.



ok thanks that i stick to magic the gathering...


----------



## penguin_316

I just want everyone to understand the entire concept is based on these over leveraged hedge funds short positions. They are paying probably hundreds of millions(cumulatively billions) a day to keep them open...some of their positions were short around $10 and still open.

The stock is currently at $312 in aftermarket price. Just keep in mind they are billionaires and calling in every favor to not lose. Buying off news outlets and literally coming up with commercials saying they are not in a position anymore.

It’s all fake news, keep holding them by the balls. Time is on our side, also remember the Reddit thing is kind of just a front.

The majority of the shares of the stock are not owned by people on reddit. This is billionaire vs billionaire warfare, Reddit is just fuel to the fire.

Also, do not feel sorry for hedge fund investors at all. The average cost to even become a client is more than you could ever imagine. This is the top 1% pushing around markets to make the top 1% even more money.

This whole thing gets me so pissed.


----------



## Xaios

ikarus said:


> ok thanks that i stick to magic the gathering...


I checked recently, my old Omnath EDH deck has a retail value of over $6k.


----------



## Necris

Xaios said:


> I checked recently, my old Omnath EDH deck has a retail value of over $6k.


Stonks!


----------



## Seabeast2000

Xaios said:


> I checked recently, my old Omnath EDH deck has a retail value of over $6k.



Scrye is out of print, what is the new valuation standard?


----------



## Jonathan20022

The people online goading others into investing at any point post 100 are super scummy, people are going to be massively hurt over the fallout from this. 

Especially since the narrative of sticking it to the man is just to rally every person who missed every single viable wave on GME to pump the numbers up. I'm literally reading /WSB and that there are people with all of their finances dumped into this, a percentage of that group is going to be ravaged because of a late completely irresponsible financial decision under the guise of standing up to the rich.


----------



## Xaios

Seabeast2000 said:


> Scrye is out of print, what is the new valuation standard?


Heck if I know. I got out of Standard during BfZ block.


----------



## Avedas

Jonathan20022 said:


> I'm literally reading /WSB and that there are people with all of their finances dumped into this, a percentage of that group is going to be ravaged because of a late completely irresponsible financial decision under the guise of standing up to the rich.


That's par for the course for WSB, but there are a lot of new people yoloing in who don't even know what a margin call is or that you have to pay taxes on your gains lmao


----------



## mbardu

Avedas said:


> That's par for the course for WSB, but there are a lot of new people yoloing in who don't even know what a margin call is or that you have to pay taxes on your gains lmao



That's OK for WSB. 
You only have to pay taxes on your _gains_.


----------



## Avedas

mbardu said:


> That's OK for WSB.
> You only have to pay taxes on your _gains_.


Let's be real, these new people are only going to buy GME and then disappear forever. And that's fine. But they'll need to pay some significant cap gains on GME 

Regular WSB monkeys will just offset the gains with their next OTM weeklies play.


----------



## Jonathan20022

Yeah problem is the flood of newbies to the sum of what? 3 Million new people being fed anti establishment memes to feed the GME bust?


----------



## mbardu

Avedas said:


> Let's be real, these new people are only going to buy GME and then disappear forever. And that's fine. But they'll need to pay some significant cap gains on GME
> 
> Regular WSB monkeys will just offset the gains with their next OTM weeklies play.



A.K.A FD YOLOs


----------



## Shoeless_jose




----------



## r3tr0sp3ct1v3

Just want to throw out the millions of members now consist of millions of Reddit bots trying to shill people into nvesting in dumb shit like doge and Slv as a diversion.

Are we also glossing over the posts of people of donating gains? 

For those of us who can’t read.


----------



## penguin_316

People putting in mortgage loans and all of that are going to do that on some kind of gamble regardless of what it happens to be.

Gamblers gonna gamble. First rule of any type of investment is to only invest what you can afford to lose AND do not borrow to invest.

What people need to talk about more is the fact that there are no secure low risk means to beat inflation currently. You are forced into riskier and riskier assets by default. Ultimately, it is one big yolo anyway.


----------



## penguin_316

And yea, for sure the people promoting any stock beside GME either are scammers or don’t understand what’s happening with GMEs situation.


----------



## Jonathan20022

r3tr0sp3ct1v3 said:


> Just want to throw out the millions of members now consist of millions of Reddit bots trying to shill people into nvesting in dumb shit like doge and Slv as a diversion.
> 
> Are we also glossing over the posts of people of donating gains?
> 
> For those of us who can’t read.



For those of us that can't *read *

Where are your stats on the percentage of users that are bots to back that up? I'm sure Reddit would pay top dollar for you to help them weed their platform out of our scripted pals. And just so we aren't being circular, I don't deny that bots constitute a portion of the now massive user base, but bots also aren't investing in GME, real people are. It's lovely that people are posting about donating the proceeds of their gains, not everyone will be so lucky to have those gains.


----------



## X1X

I haven't watched this but Tim Dillon is a pretty hilarious guy sometimes so that's a bonus


----------



## Demiurge

penguin_316 said:


> Gamblers gonna gamble. First rule of any type of investment is to only invest what you can afford to lose AND do not borrow to invest.
> 
> What people need to talk about more is the fact that there are no secure low risk means to beat inflation currently. You are forced into riskier and riskier assets by default. Ultimately, it is one big yolo anyway.



These are important points, especially considering that the most common investment by the population is retirement savings. People drop a few percentages into a 401(k) with a vanilla selection of funds (and maybe some limited brokerage features) and are told they need some eye-watering, impossible-seeming sum of money to retire. Then, whenever investing is discussed in the news or pop culture it's always about scandal or crazy volatility. They know they need to up their risk tolerance and may be compelled to go for something riskier because even diligent savings might not be enough.


----------



## r3tr0sp3ct1v3

Jonathan20022 said:


> For those of us that can't *read *
> 
> Where are your stats on the percentage of users that are bots to back that up? I'm sure Reddit would pay top dollar for you to help them weed their platform out of our scripted pals. And just so we aren't being circular, I don't deny that bots constitute a portion of the now massive user base, but bots also aren't investing in GME, real people are. It's lovely that people are posting about donating the proceeds of their gains, not everyone will be so lucky to have those gains.



oh my emojis didn’t go through. I put a bunch of rockets and diamonds. That’s what I was referring too.


----------



## TedEH

penguin_316 said:


> People putting in mortgage loans and all of that


I tend to be very skeptical of people saying things like this on reddit. I'm sure some have actually put more into this than they should have, but I think it's equally plausible that a bunch of people have _claimed_ to take much bigger risks than they really did just for the lolz.


----------



## Forkface

TedEH said:


> I tend to be very skeptical of people saying things like this on reddit. I'm sure some have actually put more into this than they should have, but I think it's equally plausible that a bunch of people have _claimed_ to take much bigger risks than they really did just for the lolz.


i can tell you after hanging in that sub for the past couple of years, your assessment is mostly true. these people love their screenshots so if they DID take a 2nd mortgage on their houses or whatever, they would post that shit. 
people constantly post how much they win/lose/bet, but its very hard to tell what percentage of their net worth that amount actually represents.

Then again, saying stuff like "yeah i put in 20k im not gonna miss them" or "money i can afford to lose" or whatever, is ALSO normalized in the sub, so people making mortgage claims have on reason to do so imho, so it could go both ways.


----------



## TedEH

Forkface said:


> but its very hard to tell what percentage of their net worth that amount actually represents.


Or just strait up lying with the hopes of egging on other people.


----------



## Demiurge

Perhaps more people should invest in this bank that's capable of closing on 2nd mortgages instantly as to fund huge impulse investments.


----------



## MrWulf

I invest like, a grand or so. Trying to get my hand on a 3rd stock but it has been challenging at least. If it panned out i'd have a decent gain but nothing outstanding, which is fine. I already incurred losses in bitcoin for being too rushed and loss at least 200 bucks already. But i was bound to lose some before i gain in there either way. If the loss is too high i will just fold my hands and work my way back, i know that much before trying. However, i see some fucks who invest in like, 65k in their dental school LOC. Of course, this being the internet you dont know if it is true or not but if it is true...oh boy


----------



## penguin_316

I believe a lot of the GME yolks are real, it’s probably 50-50 half real and half fake. Either way, I bought in knowing it was unlikely to profit but the odds are slightly in wallstreetbets favor. I’d give it a solid 60% wsb vs. 30% hedge funds. If you’re at a casino those are unheard of odds...

Bitcoin has never given an investor a negative profit if you have a 4 year timeline. You went in too hard and too fast, as a true bitcoiner I have to urge you to step back in(slowly and do more research).

Also, future you will be very upset that you sold you bitcoin. I’ve cost myself literally hundreds of thousands in present day value and it is now burned into my mind that selling Bitcoin is generally a mistake.


----------



## MrWulf

penguin_316 said:


> I believe a lot of the GME yolks are real, it’s probably 50-50 half real and half fake. Either way, I bought in knowing it was unlikely to profit but the odds are slightly in wallstreetbets favor. I’d give it a solid 60% wsb vs. 30% hedge funds. If you’re at a casino those are unheard of odds...
> 
> Bitcoin has never given an investor a negative profit if you have a 4 year timeline. You went in too hard and too fast, as a true bitcoiner I have to urge you to step back in(slowly and do more research).
> 
> Also, future you will be very upset that you sold you bitcoin. I’ve cost myself literally hundreds of thousands in present day value and it is now burned into my mind that selling Bitcoin is generally a mistake.



oh don't get me wrong I've invest like more than a grand into bitcoin. And I still have around that much. It just that I brought it during when it was surging when Elon Musk changed his twitter profile. So now it has settled back down so obviously, there's some loss. I'll continue to invest in bitcoin and bide my time. It is a long term kinda thing and I'm ok with that. The focus right now is obviously this GME thing. WSB is aiming for a pretty likely 1k or so mark. At that point I think it is also safe for me to disengage instead of just holding it further and possibly losing all of it.


----------



## Drew

mbardu said:


> Not sure I get your last point. I opened the thread because I think it's an interesting discussion. You're asking why I did it but like I replied earlier: I'm mostly here for the discussion + the popcorn value. One thing I'm not going to do is pretend which way it's going to go, because I just don't have enough data.


Ok, but when you're putting this much effort into arguing _against_ a position, especially when - disclaimer, if there's anything I've learned about the markets in the 15+ years I've been doing this is no one knows anything for _sure_, and the best you can have is a pretty reasonable idea - this is something I know a fair amount about, have studied at _length_ and have professional tools at my disposal for research - then saying "Oh, I'm not taking a position, I'm just saying we just don't know." 

Again, I'd be an idiot to make any guarantees... but everything I'm seeing says that this stopped being a short squeeze early last week. 

That last point - a stock price will rise if there are more people willing to transact over the last traded price than under the last traded price. It will fall if there are more people willing to transact under the last traded price than over the last traded price. And it'll move sideways, neither rising nor falling, but staying range-bound - if people willing to transact above the last price are roughly balanced with people willing to transact below the last price. Basic market dynamics. So, if GME rose exponentially at the start of the week, that's consistent with far more people being willing to transact - buy or sell - at a higher price than the prevailing one in the market. Some of that was probably short covering, some of that was frenzied speculative or non-economic buying on the part of r/wsb or piggyback retail traders chasing them. The fact that that meteoric rise has stalled and that for the most part GME has stayed within a $250-350 channel the last three and a half days, on _extremely _high volume, tells me that people willing to transact over the current price are roughly balanced with people willing to transact below the current price. 

Considering we know that r/wsb is still trying to bid the price up, and they're failing, that would concern me if I was long GME right now.


----------



## Drew

Jonathan20022 said:


> The people online goading others into investing at any point post 100 are super scummy, people are going to be massively hurt over the fallout from this.
> 
> Especially since the narrative of sticking it to the man is just to rally every person who missed every single viable wave on GME to pump the numbers up. I'm literally reading /WSB and that there are people with all of their finances dumped into this, a percentage of that group is going to be ravaged because of a late completely irresponsible financial decision under the guise of standing up to the rich.


This is a HUGE concern of mine. That's why I keep stressing in this thread - in case anyone reading this is long GME - that everything I've seen is telling me that the price action of the last few days is NOT a short squeeze, and we've moved into pure speculative bubble.



penguin_316 said:


> I just want everyone to understand the entire concept is based on these over leveraged hedge funds short positions. They are paying probably hundreds of millions(cumulatively billions) a day to keep them open...some of their positions were short around $10 and still open.
> 
> The stock is currently at $312 in aftermarket price. Just keep in mind they are billionaires and calling in every favor to not lose. Buying off news outlets and literally coming up with commercials saying they are not in a position anymore.
> 
> It’s all fake news, keep holding them by the balls. Time is on our side, also remember the Reddit thing is kind of just a front.
> 
> The majority of the shares of the stock are not owned by people on reddit. This is billionaire vs billionaire warfare, Reddit is just fuel to the fire.
> 
> Also, do not feel sorry for hedge fund investors at all. The average cost to even become a client is more than you could ever imagine. This is the top 1% pushing around markets to make the top 1% even more money.
> 
> This whole thing gets me so pissed.


You don't have to feel sorry for hedge fund investors, but please go back and read some of my posts in this thread, especially if you have $5k riding on GME right now. There's a lot of evidence out there - not the least of which the fact that the two large short positions that triggered this whole thing haven't had to call additional capital since last Monday when GME closed $100-250 lower than it's traded since - that strongly suggests all the original shorts have closed, and this is no longer a short squeeze but rather massive retail investor (aka - guys like you) speculative buying keeping a huge bubble in the price of GME artificially inflated.


----------



## SpaceDock

I find it strange that so many people are willing to throw their money into these gimmicks because in the world of stocks there are generally two arm chair investor ways to make money. Throw some cash into what you think is going to make a high quick turn, then sell at what you think will be the peak. This is GME stock to me, but if you are still in it you might have already missed that chance. Second way is to slowly invest over years into a variety of stocks so some go up and some go down but you hope that the money accrues more than a savings account, this is how most retirement accounts work. 

The problem I see with even being a moment late to the GME, Dogecoin, or silver party is that you only make small amount of money if you are very lucky and the only way to really profit is to dump into it, then cash out really fast. Not too many people are good at that. It has been statistically shown that ducks can pick stocks as good as pro traders, but the pros know when to sell. Laymen tend to hold on for too long waiting for the tip of the profit climb that might not ever happen.

If anyone wants my advice on how to make money in stocks, slowly put your money into companies you believe in and not these flash in the pan news stories. I personally make around 3-5k a day in stocks but last Thursday lost 10k, the normal market has enough volatility for my tastes. But the real way I “make” that money is by not cashing it out.


----------



## jaxadam

SpaceDock said:


> I personally make around 3-5k a day in stocks but last Thursday lost 10k, the normal market has enough volatility for my tastes. But the real way I “make” that money is by not cashing it out.



You make between $1M and $2M per year in stocks? That is impressive.


----------



## BenjaminW

SpaceDock said:


> I personally make around 3-5k a day in stocks but last Thursday lost 10k, the normal market has enough volatility for my tastes. But the real way I “make” that money is by not cashing it out.


Since @jaxadam says you make a 1 to 2 million dollars a year in stock, wanna slide me some of that?


----------



## SpaceDock

jaxadam said:


> You make between $1M and $2M per year in stocks? That is impressive.



only on days the stock market is open, so not 365 days a year. Also, like I also said some days I will lose 10k easy. I did make three times my salary last year in stocks but I can’t start pulling out because then the returns diminish greatly, that is the damning part about stock investment.


----------



## Drew

SpaceDock said:


> only on days the stock market is open, so not 365 days a year. Also, like I also said some days I will lose 10k easy. I did make three times my salary last year in stocks but I can’t start pulling out because then the returns diminish greatly, that is the damning part about stock investment.


What was your portfolio total return last year?


----------



## SpaceDock

Drew said:


> What was your portfolio total return last year?



sent DM


----------



## SpaceDock

Btw, I am not rich or make a ton of money in my day job. I think I have been very diligent in investing here and there, all of this could be wiped out if the market crashes.


----------



## jaxadam

SpaceDock said:


> Btw, I am not rich or make a ton of money in my day job. I think I have been very diligent in investing here and there, all of this could be wiped out if the market crashes.



Well, they always say, don't quit your day job, but I think in this case maybe you could!


----------



## SpaceDock

jaxadam said:


> Well, they always say, don't quit your day job, but I think in this case maybe you could!



Let’s see how good Yellen treats me!


----------



## Drew

penguin_316 said:


> What people need to talk about more is the fact that there are no secure low risk means to beat inflation currently. You are forced into riskier and riskier assets by default. Ultimately, it is one big yolo anyway.


Also, missed this earlier. Man, I could write a book on this.

I mean, first, there's risk, and then there's risk. A large cap stock EFT is "risky," in that it's not guaranteed, can fluctuate substantially in short periods of time, and it's possible to lose upwards of 30% of the value of the fund in a month or two, if you happen to catch the wrong month or two. However, it's not going to crash to $0 (or, rather, the sort of total civilization failure that would cause the S&P500 to hit zero is the kind of thing there's no point in having money for, anyway), I think the worst decline we've ever seen was in the ballpark of -40% peak to valley, and even if you'd bought at that peak, in late 2007, you'd still be up about 150% today. There are not many 10-year windows where the return on (bigger picture, relatively conservative US large cap equities hasn't exceeded inflation, and even fewer where they haven't been at least positive - too lazy to run the numbers, but I think there hasn't been a trailing ten year period where you wouldn't have made money simply holding the large cap market. 

On the other side of the coin, there's something like Gamestop, which fell -30% today alone, and is arguably still overpriced by, oh, call it -98% if it would drop back to $20. Yes, beating inflation means moving out of risk-free assets like savings accounts or Treasury notes, and taking some investment risk like owning equities. It doesn't mean you have to then move to the investment equivalent of russian roulette if you want to one day retire. 

Second... I mean, much longer post, but if beating inflation is your concern (and there's a lot more to investment than this, but bear with me), then it's more a matter of understanding how various parts of your portfolio respond to various stimuli. From a portfolio immunization standpoint, equity is generally a pretty _good_ hedge for inflation, since rising inflation tends to result in higher stock prices (both directly, from the dollar weakening with respect to the tangible value of owning one share of a business, and indirectly, from the way inflation tends to reduce fixed-dollar-cost expenses like debt service and the book value of liabilities). If we got an unexpected surge in inflation, bonds would do rather poorly, but the stock market would surge. On the other hand, generally during periods where stocks do poorly, the "flight to quality" pushes investors into low-risk assets like high quality bonds, so a bond component to a portfolio is designed not to provide total return in and of itself (especially in the current rate environment), but rather to cushion the portfolio in case of a sudden decline in equities (a growing concern, with stretched equity valuations and a pandemic still raging) as well as capital to use to "buy the dip" if the market does trade off. 

Idunno. It's not hard to build an investment portfolio that will almost certainly outperform inflation, as well as offer some downside protection during market corrections, and that's before even getting into stuff like option hedging or more esoteric approaches than "buy stock ETFs, but also hold a bit of cash in bond ETFs to derisk a bit and have some dry powder on hand for tactical opportunities." I don't think the answer here is putting it all on black, exactly.


----------



## TedEH

SpaceDock said:


> I am not rich


Rich is really relative though. To me, someone who has ever had control of a million dollars "feels rich". I'll be lucky if I make that in my lifetime total, let alone have it all at once. To a lot of the people I know who just never really found their way into a comfortable financial situation, they see _me_ as rich just because having no kids or responsibilities means living in my means isn't much of a challenge. Any time I talk about money, someone throws at me "but what about the people who make minimum wage? What about people with kids who can't make ends meet? How is it fair that you're comfortable and they're not?" Nobody said life is easy or fair. If you so much as pay your rent on time, someone somewhere would use you as the yardstick for financial success.


----------



## MrWulf

https://www.zerohedge.com/markets/gamestop-slides-after-short-interest-said-collapse

TLDR: "And with both short interest and borrow fees tumbling, the main catalyst behind the squeeze - namely GME being the most shorted Russell 3000 stock - is now gone.

Which begs the question: is the party finally over, and how long before GME trades back near its true value."

I backed out immediately once I read this. Lost like 500$ amidst all the chaos. But i was willing to lose a fair bit more so I'm good. Next I'll just pivot to bitcoin instead. Can't really say the same for folks who plunges 5 digits or 6 digits or even 7 digits worth of cash to this. r/WSB is going to be a bloodbath


----------



## Drew

MrWulf said:


> https://www.zerohedge.com/markets/gamestop-slides-after-short-interest-said-collapse
> 
> TLDR: "And with both short interest and borrow fees tumbling, the main catalyst behind the squeeze - namely GME being the most shorted Russell 3000 stock - is now gone.
> 
> Which begs the question: is the party finally over, and how long before GME trades back near its true value."
> 
> I backed out immediately once I read this. Lost like 500$ amidst all the chaos. But i was willing to lose a fair bit more so I'm good. Next I'll just pivot to bitcoin instead. Can't really say the same for folks who plunges 5 digits or 6 digits or even 7 digits worth of cash to this. r/WSB is going to be a bloodbath



You guys believe it when you see it in ZeroHedge, but not when I've been saying it for the better part of a week.   

Not only are most of the initial shorts closed, I'd bet heavily that there's a lot of not-yet-disclosed short positions that are coming on now, and you're going to have to move the share price _significantly_ higher than the $225 it closed at today, if you want to inflict the sort of pain on a trader short at $20 who saw the stock price break over $80 and towards a $145 close.


----------



## MrWulf

Drew said:


> You guys believe it when you see it in ZeroHedge, but not when I've been saying it for the better part of a week.
> 
> Not only are most of the initial shorts closed, I'd bet heavily that there's a lot of not-yet-disclosed short positions that are coming on now, and you're going to have to move the share price _significantly_ higher than the $225 it closed at today, if you want to inflict the sort of pain on a trader short at $20 who saw the stock price break over $80 and towards a $145 close.



In my defense i only stumbled into this thread like last weekend. And im completely out anyway. But this scenario was in my expectation so no worry. 

Those who mortgage their future tho...


----------



## Steinmetzify

Drew said:


> You guys believe it when you see it in ZeroHedge, but not when I've been saying it for the better part of a week.
> 
> Not only are most of the initial shorts closed, I'd bet heavily that there's a lot of not-yet-disclosed short positions that are coming on now, and you're going to have to move the share price _significantly_ higher than the $225 it closed at today, if you want to inflict the sort of pain on a trader short at $20 who saw the stock price break over $80 and towards a $145 close.



Dude I remember the forum for you on MG.org lol.....never didn't believe you.

Got out the second you started talking about it, got my brother out too.


----------



## mbardu

Drew said:


> You guys believe it when you see it in ZeroHedge, but not when I've been saying it for the better part of a week.
> 
> Not only are most of the initial shorts closed, I'd bet heavily that there's a lot of not-yet-disclosed short positions that are coming on now, and you're going to have to move the share price _significantly_ higher than the $225 it closed at today, if you want to inflict the sort of pain on a trader short at $20 who saw the stock price break over $80 and towards a $145 close.



Like before, I do agree the scenario you describe is quite likely, but just as a note on that part specifically. 

Although it's obviously an order of magnitude of difference in terms of pure covering costs for someone who entered the short in the hundreds vs in the tens, the borrowing costs however are going to be significantly higher nowadays. Even if the remaining shorts count is much lower (say a third of what it was), it's now on the market cap of a company that is still (until the share falls back to 15$ obviously) more than 10 times more expensive than what it used to be.


----------



## penguin_316

I won’t bother quoting everyone but I will toss a few points out there.

1.These hedge funds are not fully out of the trade yet, there was a failure to deliver on nearly 6 million shares of gme for the first 2 weeks of Jan, we don’t have the numbers for the second half yet.

We can only be certain that all news articles and tactics are simply scare tactics. These people corrupt everything, they do not play by the rules. I jumped in fully understanding the roulette game presented.


2. Define what you think inflation is, I define it as a basket of goods that I actually want to buy in the future or need to buy to survive. CPI is a bullshit metric and always has been. They change the basket of goods to suit their narrative, meanwhile it isn’t hard to see prices already skyrocketing in day to day life.

Wages have remained relatively unchanged in 50 years while the dollars continued to lose value. Did I mention the parabolic monetary supply? Calculate that into your inflation estimates...

People talk about diversifying like we are in the same scenario of previous generations. How did a diversified portfolio do in March of 2020? A liquidity crisis doesn’t generally care if you are diversified or not. So you are left with the question, what is something with value that is on the cusp of changing the way we live. Invest in that...do you think millennials and younger are going to be buying stocks? Especially after this fiasco? The majority will go elsewhere.

I could go on and on, but wall of text...tldr.


----------



## penguin_316

MrWulf said:


> https://www.zerohedge.com/markets/gamestop-slides-after-short-interest-said-collapse
> 
> TLDR: "And with both short interest and borrow fees tumbling, the main catalyst behind the squeeze - namely GME being the most shorted Russell 3000 stock - is now gone.
> 
> Which begs the question: is the party finally over, and how long before GME trades back near its true value."
> 
> I backed out immediately once I read this. Lost like 500$ amidst all the chaos. But i was willing to lose a fair bit more so I'm good. Next I'll just pivot to bitcoin instead. Can't really say the same for folks who plunges 5 digits or 6 digits or even 7 digits worth of cash to this. r/WSB is going to be a bloodbath



If you want to focus on Bitcoin I can’t recommend it enough, but you will be told the world is ending daily. Learn and be rewarded.


----------



## MrWulf

penguin_316 said:


> If you want to focus on Bitcoin I can’t recommend it enough, but you will be told the world is ending daily. Learn and be rewarded.



Oh yeah im playing the long game for sure.


----------



## MrWulf

Glimpsing over r/wsb, they are still holding. I have to say, their balls are pretty fucking big to be able to tell each other to hold despite the freefall.


----------



## Demiurge

I've been checking on that sub sporadically and the energy there sure is interesting. There seem to be a lot of true believers there, but it's questionable whether there are enough of 'em out there to stave-off what feels like is inevitable. Self-preservation's gotta kick-in at some point, right?


----------



## MrWulf

In theory yes but in reality....it is less so.


----------



## Shoeless_jose

I feel like it's a lot harder to get people on board when the price is so high right now too.


----------



## mbardu

Dineley said:


> I feel like it's a lot harder to get people on board when the price is *so high right now* too.



I mean...not anymore


----------



## Xaios

mbardu said:


> I mean...not anymore


Swingy as hell. Yeah, it dropped a LOT, but it's also gone up by about $40 from its lowest point in the past half an hour.

EDIT: AAAAAAAND it's on its way down again.


----------



## MrWulf

Mark Cuban encouraged ppl to hold their stocks for as long as possible and $GME is on the upswing after dropping to 70$ lmao


----------



## Forkface

following this is the most fun i've had in years of wimpy "investing".
*Sure, we will most likely lose our money*. But if this works, regular people will effectively restructure the way the market is used. Wall St will be more careful not to purposefully try and send companies to the grave. 
Unless, of course, regulators step in and basically "sorry no you cant do that anymore, it hurts the people upstairs"... which I definitely see happening after this.


----------



## Demiurge

Maybe this is an interesting question for somebody who follows the investing world better can answer: what WSB is trying to do to these hedge funds, do institutional investors do this to each other often? Do they try to blow up each other's shorts like this?


----------



## Steinmetzify

Went back in for one more share for fun. 

Got the day off, it’s interesting to watch this lol


----------



## mbardu

MrWulf said:


> Mark Cuban encouraged ppl to hold their stocks for as long as possible and $GME is on the upswing after dropping to 70$ lmao



Pretty shitty thing for him to do TBH.


----------



## Forkface

mbardu said:


> Pretty shitty thing for him to do TBH.


to be fair, he said to hold IF YOU CAN AFFORD IT. 
and, to be fairer, if you CANT afford it you got nothin to be doin on wsb in the first place.


----------



## SpaceDock

If people weren’t in the on the ground floor, forget about it!


----------



## Drew

mbardu said:


> Like before, I do agree the scenario you describe is quite likely, but just as a note on that part specifically.
> 
> Although it's obviously an order of magnitude of difference in terms of pure covering costs for someone who entered the short in the hundreds vs in the tens, the borrowing costs however are going to be significantly higher nowadays. Even if the remaining shorts count is much lower (say a third of what it was), it's now on the market cap of a company that is still (until the share falls back to 15$ obviously) more than 10 times more expensive than what it used to be.


Stop trying to play both sides.  You were all rocket ships and "the system is R I G G E D!" on the way up, and now that it's crashing, after I've been saying it's GOING to crash for about a week now, you're trying to backpedal and agree that "the scenario is quite likely" without agreeing with me. 

To your note - that's also exactly offset by the fact that retail buyers had to pay 10 times as much to go long a share, if they wanted to try to push the price up. IF everyone involved is taking smaller share counts to get to the same market value (and total market value, not number of shares, is how you gauge portfolio position size), then the math hasn't actually changed. 



penguin_316 said:


> We can only be certain that all news articles and tactics are simply scare tactics. These people corrupt everything, they do not play by the rules. I jumped in fully understanding the roulette game presented.


Questioning basic facts is the last defense of losing an argument. FWIW, I agree with you on wages, and how the return on labor has badly lagged the return on capital for the last 20 or so years.


----------



## mbardu

Drew said:


> Stop trying to play both sides.  You were all rocket ships and "the system is R I G G E D!" on the way up, and now that it's crashing, after I've been saying it's GOING to crash for about a week now, you're trying to backpedal and agree that "the scenario is quite likely" without agreeing with me.
> 
> To your note - that's also exactly offset by the fact that retail buyers had to pay 10 times as much to go long a share, if they wanted to try to push the price up. IF everyone involved is taking smaller share counts to get to the same market value (and total market value, not number of shares, is how you gauge portfolio position size), then the math hasn't actually changed.
> 
> 
> Questioning basic facts is the last defense of losing an argument. FWIW, I agree with you on wages, and how the return on labor has badly lagged the return on capital for the last 20 or so years.



I don't know why you take it so seriously. As I told you, I'm here #1 for the discussion and entertainment value, not to "win" a discussion on behalf of the HFs like you  . Maybe you couldn't read the rocketship in the OP as an ironic joke sprinkled with memes, but in that case I'll let you read the text and you'll see I've said from the start and multiple times that the stock will likely be at 15$ soon - so not sure what strawman you are debating here.

As for the R I G G E D part, I stand by it 100%.
The double standards from the media tolerating behavior from HF but berating WSB. The finger pointing to retail longs but sweeping under the rug the 140% short that caused the whole thing. IBKR dude literally selling he doesn't want to allow buying if _he _doesn't think the price is fair. The unethical to downright illegal tools used by the HFs (from naked shorting to sell ladders to targeted restrictions on buy orders). R I G G E D , no doubt about it. And it's not because it's working that it's not rigged. Quite the opposite, it's just all the more infuriating.

And although you're fixated on solely debating with yourself that the stock will go down (which nobody has doubted here or elsewhere) by bringing strawmen into the discussion (I mean- who even wanted to debate about fundamentals before you brought it up ), you really don't mind or have anything to say of the "rigged" part of it all. Maybe you feel all is fair game for the big players, but it's apparent that many people feel the opposite.

Finally re: short borrowing costs, as before, you try to patronize while glossing over the actual argument. Of course it's short market value that matters. Which is exactly what I've said. And for example if the short count is divided by 3, while price is multiplied by 9, it's not flat, it's still 3 times as much. We just don't know since we don't have the data.

And of course, the scenario that you describe is the most likely - we've said it multiple times already. We know the house wins in the end. For example, the first manufactured drop to 100 last week was the perfect opportunity to exist most painful shorts, and I called it as much. Doesn't mean it's not interesting to look at other scenarios too. Your general arguments for "it's over" were the same arguments everyone used after the jump to 35. Or to 65. Or to 120. Or to 300. Or to 500. The arguments are bound to be right _eventually_, because the stock has to go down to its value. You're taking 0 risk in backing that horse and nobody said otherwise. It was just interesting to look at when, and what shenanigans would be involved.


----------



## Drew

BTW, some basic data on the 10yr return of the S&P500, took a few minutes to run monthly historical price levels as far back as I have access to the total return price series. 

Through 1/31/2021...
*there are 278 months (slightly more than 23 years) where there's a calculatable 10-year total return for the S&P500 (history back to 1/11988). 
*There are 23 months, all falling inside the Great Recession of 07-09, when the trailing 10yr return is not positive. That's about 8.3%. 91.7% of the trailing ten year periods are positive.
*the worst trailing ten year period was -32.2%, in February 2009, height of the great recession. The best trailing 10 year return was 523.7%, in August of 2000. 
*the average 10yr return was 168.4%, or about 10.4% a year. 

Unless you expect inflation to exceed, on average, 10% a year over a 10 year horizon, you can _absolutely _exceed inflation with an extremely high confidence level (greater than 90%) by investing in diversified equities rather than concentrated high risk highly speculative assets or stock. And this is just looking at historical performance data, and ignoring the fact that stock performance correlates pretty strongly with inflation, so that inflationary periods tend to exhibit stronger stock performance. 

This whole idea that participating in a GME bubble is somehow smart investing rather than speculative gambling doesn't hold up to scrutiny and is going to cost a LOT of people a lot of money.


----------



## Drew

mbardu said:


> I don't know why you take it so seriously. As I told you, I'm here #1 for the discussion and entertainment value, not to "win" a discussion on behalf of the HFs like you  . Maybe you couldn't read the rocketship in the OP as an ironic joke sprinkled with memes, but in that case I'll let you read the text and you'll see I've said from the start and multiple times that the stock will likely be at 15$ soon - so not sure what strawman you are debating here.
> 
> As for the R I G G E D part, I stand by it 100%.
> The double standards from the media tolerating behavior from HF but berating WSB. The finger pointing to retail longs but sweeping under the rug the 140% short that caused the whole thing. IBKR dude literally selling he doesn't want to allow buying if _he _doesn't think the price is fair. The unethical to downright illegal tools used by the HFs (from naked shorting to sell ladders to targeted restrictions on buy orders). R I G G E D , no doubt about it. And it's not because it's working that it's not rigged. Quite the opposite, it's just all the more infuriating.
> 
> And although you're fixated on solely debating with yourself that the stock will go down (which nobody has doubted here or elsewhere) by bringing strawmen into the discussion (*I mean- who even wanted to debate about fundamentals before you brought it up *), you really don't mind or have anything to say of the "rigged" part of it all. Maybe you feel all is fair game for the big players, but it's apparent that many people feel the opposite.
> 
> Finally re: short borrowing costs, as before, you try to patronize while glossing over the actual argument. Of course it's short market value that matters. Which is exactly what I've said. And for example if the short count is divided by 3, while price is multiplied by 9, it's not flat, it's still 3 times as much. We just don't know since we don't have the data.
> 
> And of course, the scenario that you describe is the most likely - we've said it multiple times already. We know the house wins in the end. For example, the first manufactured drop to 100 last week was the perfect opportunity to exist most painful shorts, and I called it as much. Doesn't mean it's not interesting to look at other scenarios too. Your general arguments for "it's over" were the same arguments everyone used after the jump to 35. Or to 65. Or to 120. Or to 300. Or to 500. The arguments are bound to be right _eventually_, because the stock has to go down to its value. It was just interesting to look at when, and what shenanigans would be involved.


Idunno, this looks like you're taking it pretty seriously to me.

Also, come on, the bolded bit - how the fuck do you even talk about stock valuation without any reference at all to business fundamentals? 

I'm not patronizing you in the least. If the stock price increases 10-fold, then shorting the same share count takes 10x as much capital... but buying the same share count also does too. Market value is far more useful than share count here, and the buying power of both longs and shorts with finite capital proportionally decreases as market cap increases. If that seems like an awfully obvious thing to say, it's no less so than pointing out that it takes 10x as much capital to short the same number of shares if the price has increased 10x.

Also, we DO have the data. A whole bunch more people who estimate short interest are coming out and saying it's way down, likely early last week. It wasn't a short squeeze that turned GME into a $350 stock. It was retail buying speculation once the price DID start moving, and trying to pin that on "wall street" and not owning it as the direct buyproduct of bidding up a worthless stock to speculative heights is just irresponsible passing the buck. 

Reason I care? Evidently a lot of people on this board piled into this trade. If at all possible I'd rather see as few people in this community as possible turn $5k into $500. As it stands I have a buddy who's currently beating himself up because all his AMC paper gains just evaporated, though thankfully at current pricing he's probably still doubled his money, if has the good sense to get out soon.


----------



## mbardu

Drew said:


> This whole idea that participating in a GME bubble is somehow smart investing rather than speculative gambling doesn't hold up to scrutiny and is going to cost a LOT of people a lot of money.



Nobody said buying $GME was smart investing, come on.
Where did you see that 
Why do you need to make stuff up, just for the pleasure to argue against?

Everyone from the start has called it for what it is. An opportunity to squeeze some $$$ through a technical short squeeze from some overextended HFs.
And I bet plenty of people did just that.


----------



## jaxadam

Drew said:


> If at all possible I'd rather see as few people in this community as possible turn $5k into $500.



What about another Black Friday run?


----------



## Drew

mbardu said:


> Nobody said buying $GME was smart investing, come on.
> Where did you see that
> Why do you need to make stuff up, just for the pleasure to argue against?
> 
> Everyone from the start has called it for what it is. An opportunity to squeeze some $$$ through a technical short squeeze from some overextended HFs.
> And I bet plenty of people did just that.


Then why have you been dissagreeing with me all along?

"this is a bubble. Short interest has evaporated."

"well, actually, we just don't know."

Yes we do know. A short squeeze isn't a 1,600% trade. This isn't the first time there's ever been forced covering in a stock that's been popular to short.

EDIT - beyond that, I think my _broader _point was that by Tuesday of last week, buying GME was also not an effective way of hurting hedge funds.


----------



## Drew

jaxadam said:


> What about another Black Friday run?


That's now the _second_ most effective way to lose thousands of dollars all at once I've seen discussed on this board!


----------



## mbardu

Drew said:


> Then why have you been dissagreeing with me all along?
> 
> "this is a bubble. Short interest has evaporated."
> 
> "well, actually, we just don't know."
> 
> Yes we do know. A short squeeze isn't a 1,600% trade. This isn't the first time there's ever been forced covering in a stock that's been popular to short.
> 
> EDIT - beyond that, I think my _broader _point was that by Tuesday of last week, buying GME was also not an effective way of hurting hedge funds.



Very funny- You were the one pushing and pushing that supposedly _we don't know_ what short interest actually is for real until the 9th, but when it supports your argument, suddenly you know 100%. All those people doing the estimates, you discard their numbers when they're against your argument - yet they're 100% on point when they "support" it. Do you not seriously see the irony? It's a bit the same double standards as you not caring that people short at 140%, yet being upset that WSB would pound on the squeeze. Ironically too btw, I've been saying your scenario is the most likely all along. You are just incapable of accepting "most likely" vs "only possible", whereas at least I'm willing to say that there are some things we don't know.

Again, I feel like I could copy paste what I said above, but there is no merit to your debate here. Everybody knows it's going to go down, and that the whole thing is just a short term mechanical move on the price. _Literally _everybody knows that. Precise fundamentals (is it fair valued at 5 or 15 or 30 based on intrinsic metrics) is irrelevant. Just say it's 30 if you think 15 is too low, that's a blip. You have the same arguments that everyone else had at 35, then 65, then 100, then 200, then 400, and yes they're bound to be right _eventually_, we all know that. It's like being proud of predicting that when throwing a ball up, it's going to fall back to the ground eventually. The only discussion was how long it's going to take and how high it's going to go, not whether gravity will do it's job.

What do you even mean "a short squeeze isn't a 1,600% trade" ? It's already been that and more for many people, and could have been more, and to more people, had it not been obviously rigged. Clearly, _you _don't mind that it is rigged. But some people do.


----------



## TedEH

Drew said:


> Evidently a lot of people on this board piled into this trade.


I've never seen this kind of attention given to stock trading before - people at work are in on it, people here are in on it, random youtubers are in on it, etc. To be honest, I'm kinda in that same boat of hoping nobody gets too seriously burned by this.



mbardu said:


> Nobody said buying $GME was smart investing, come on.


I think the huge visibility has put this on the radar of a lot of people who plainly don't understand the risk, and might be convinced it's a smart move. A lot of people are talking about trading when they didn't know anything about it before. People are buying in because it's the cool reddit thing to do, not knowing what "shorting" means, and not having any way to know when or how this is going to blow up in their faces - which it totally won't because something something to the moon diamond hands.



mbardu said:


> The double standards from the media tolerating behavior from HF but berating WSB.


Every place I've seen any news about this has been praising WSB for "sticking it to the man", so I'm not sure what double standard you're seeing.


----------



## mbardu

Drew said:


> This whole idea that participating in a GME bubble is somehow smart investing rather than speculative gambling doesn't hold up to scrutiny and is going to cost a LOT of people a lot of money.



Who are you debating? Does that look like people looking for reasonable smart investing based on fundamentals to you:

https://www.reddit.com/r/wallstreet...mond_hands_vs_the_world_see_yall_on_the_moon/

https://www.reddit.com/r/wallstreetbets/comments/lb0nnm/wsb_headquarters/

https://www.reddit.com/r/wallstreetbets/comments/lb108v/this_is_the_way/


Edit: and it is _clearly _gambling. Nobody went to GME for investing purposes. And nobody should do it unless they're willing to lose the money they're putting in.

Most people lose in gambling, but some people do win. Absolute weighted value of potential returns for any given person is negative, yet some people do gamble, and some people get rich out of it. That's fine and those are the rules.

When Melvin is playing the game, they are making even dumber moves (shorting a stock at 4/5 dollars when a conservative view of the company's current balance sheet is already worth double that market cap), then strong arming the media and their buddies in order to torpedo the company they're shorting - trying to still win despite making dumb moves. And when they're still losing, they get 3B bailouts, and papa Citadel gets to change the rules against those few who are winning some $$$ despite all odds.

*R I G G E D
*
Rigged investing? No of course. Although we could speak at length about how even investing is rigged too, but that's not the discussion here- nobody talked about investing. Rigged _gambling _yes, but rigged regardless.


----------



## TedEH

mbardu said:


> Nobody went to GME for investing purposes.


I would be VERY surprised if there wasn't at least a small number of people who saw this in the news, saw dollar signs, and risked more than they should have. One mans "gamble" is anothers "investment".


----------



## Drew

mbardu said:


> Very funny- You were the one pushing and pushing that supposedly _we don't know_ what short interest actually is for real until the 9th, but when it supports your argument, suddenly you know 100%. All those people doing the estimates, you discard their numbers when they're against your argument - yet they're 100% on point when they "support" it. Do you not seriously see the irony? It's a bit the same double standards as you not caring that people short at 140%, yet being upset that WSB would pound on the squeeze. Ironically too btw, I've been saying your scenario is the most likely all along. You are just incapable of accepting "most likely" vs "only possible", whereas at least I'm willing to say that there are some things we don't know.
> 
> Again, I feel like I could copy paste what I said above, but there is no merit to your debate here. Everybody knows it's going to go down, and that the whole thing is just a short term mechanical move on the price. _Literally _everybody knows that. Precise fundamentals (is it fair valued at 5 or 15 or 30 based on intrinsic metrics) is irrelevant. Just say it's 30 if you think 15 is too low, that's a blip. You have the same arguments that everyone else had at 35, then 65, then 100, then 200, then 400, and yes they're bound to be right _eventually_, we all know that. It's like being proud of predicting that when throwing a ball up, it's going to fall back to the ground eventually. The only discussion was how long it's going to take and how high it's going to go, not whether gravity will do it's job.
> 
> What do you even mean "a short squeeze isn't a 1,600% trade" ? It's already been that and more for many people, and could have been more, and to more people, had it not been obviously rigged. Clearly, _you _don't mind that it is rigged. But some people do.


Sigh. This isn't even a debate, this is you refusing to stand by anything you've said. 

I said, in response to your stating that short interest was still 120%, that that data point is stale, gave you the FINRA data on it tying those numbers back to the 1/15 filing date, and then pointed to some anecdotal, some non-anecdotal evidence (including Melvin's current holdings no longer including GME, the fact they hadn't required an additional capital infusion, the fact no one else had despite the share price doubling again, the fact that no hedge fund other than Melvin has thus far reported a monthly loss of more than roughly 10%) that led me to believe short's had closed significantly since 1/15. At that point you continued to say "true, you could be right..." but then kept looking for excuses why those shorts had to be open. 

You then pointed to a couple firms who attempt to updated reported short interest in real time by using (still lagged, but less so) hedge fund regulatory filings to adjust FINRA numbers. And, guess what? They're estimating short interest is now down to about 30% of float, a fairly normal, even low, value. 

Now, I don't pretend to believe those numbers are accurate either. I suspect it's higher, but again because of new short positions coming on, and not because I think there are funds riding out a short thats exploded 1600% to the upside. But, that's one _more_ reason why it's hard to see any more room to run on a short squeeze. 

Also, this may seem like nit-picking to you... but, again, my main point here wasn't a call that GME was going to go down, immediately, but rather that the _factors _driving price movement appeared to have changed, and that what was happening was no longer a short squeeze. I still stand by that. Short squeezes generally are good for 10-20% upside. 50% would be massive. The biggest prior short squeeze, a total outlier, was Volkswagen quadrupling in 2008, and even then I'd suspect some of that was performance chasing rather than forced covering. Gamestop's 1600% gain was simply too big to be driven entirely by people covering shorts, and if this is retail investors chasing performance rather than nefarious hedge funds betting against a company, well, that leads to very different conclusions.


----------



## Drew

TedEH said:


> I would be VERY surprised if there wasn't at least a small number of people who saw this in the news, saw dollar signs, and risked more than they should have. One mans "gamble" is anothers "investment".


There were absolutely people _in this thread _who thought it was a savvy buy. And again if I'm coming across all doom and gloom and as a bit of a broken record here, it's because from my first post I thought it was pretty clear that a whole lot of people were reading the situation wrong, in ways that would cause them to lose a _lot_ of money.


----------



## mbardu

TedEH said:


> I would be VERY surprised if there wasn't at least a small number of people who saw this in the news, saw dollar signs, and risked more than they should have. One mans "gamble" is anothers "investment".



Maybe. Just like on TLRY or a bunch of others in the past I suppose.

That said, I'm still making a distinction here. If you know the rules and you decide to gamble anyway, and then you lose, fair enough. At least to some extent, that's on you. If you gamble, but someone changes the rules, or secretly plays by different rules, and then you are more likely to lose than is disclosed, or you lose more so that the cheaters get more $$$, then it's a different game. A rigged game.


----------



## penguin_316

Drew, normally you make decent arguments, but I really have to push back on a lot of these points. 

You are correct there was no short squeeze on the hedge funds(yet), there were gamma squeezes though caused by the inability to find shares for ITM call options. That is why Melvin needed a $3+billion bailout from Citadel.

The stocks price is widely irrelevant at this point and can go to let’s say $20...it won’t change the stalemate that is in play. They doubled down on their shorts, then bought call options to hedge. The latest data will show that as a net bust rail position, but that isn’t the reality. They need SHARES at the end of the day, no matter the price.

Of the millions in GME shares, how many do you really think redditors own. 20%? 50% It’s probably a lot less than you think, these stocks are in portfolios across the globe. Additionally, once sharks smelled blood they got in as well. It’s not just Reddit vs Wall Street, that’s far too simple.

That’s the gamble, when shares must be covered how high does the price go? This will likely take until March to play out, if it does at all.


----------



## TedEH

mbardu said:


> If you know the rules and you decide to gamble anyway, and then you lose, fair enough.


I mean, the same is true of an investment. The line is very fuzzy. Not every gamble is an investment, but any investment generally is a gamble.


----------



## mbardu

Drew said:


> Sigh. This isn't even a debate, this is you refusing to stand by anything you've said.
> 
> I said, in response to your stating that short interest was still 120%, that that data point is stale, gave you the FINRA data on it tying those numbers back to the 1/15 filing date, and then pointed to some anecdotal, some non-anecdotal evidence (including Melvin's current holdings no longer including GME, the fact they hadn't required an additional capital infusion, the fact no one else had despite the share price doubling again, the fact that no hedge fund other than Melvin has thus far reported a monthly loss of more than roughly 10%) that led me to believe short's had closed significantly since 1/15. At that point you continued to say "true, you could be right..." but then kept looking for excuses why those shorts had to be open.
> 
> You then pointed to a couple firms who attempt to updated reported short interest in real time by using (still lagged, but less so) hedge fund regulatory filings to adjust FINRA numbers. And, guess what? They're estimating short interest is now down to about 30% of float, a fairly normal, even low, value.
> 
> Now, I don't pretend to believe those numbers are accurate either. I suspect it's higher, but again because of new short positions coming on, and not because I think there are funds riding out a short thats exploded 1600% to the upside. But, that's one _more_ reason why it's hard to see any more room to run on a short squeeze.
> 
> Also, this may seem like nit-picking to you... but, again, my main point here wasn't a call that GME was going to go down, immediately, but rather that the _factors _driving price movement appeared to have changed, and that what was happening was no longer a short squeeze. I still stand by that. Short squeezes generally are good for 10-20% upside. 50% would be massive. The biggest prior short squeeze, a total outlier, was Volkswagen quadrupling in 2008, and even then I'd suspect some of that was performance chasing rather than forced covering. Gamestop's 1600% gain was simply too big to be driven entirely by people covering shorts, and if this is retail investors chasing performance rather than nefarious hedge funds betting against a company, well, that leads to very different conclusions.



Yes at least we agree, what you are doing is nitpicking.
Choose to put the arbitrary distinction of where the short squeeze ended in your mind (if it happened at all), and when supposedly the "rest" of the price action played out in order to argue on a technicality, I hardly see the point, but up to you. Cool, you're quoting the example of VW now, where they quadrupled in 2008. And that was in an era where the market was waaay less gamma-heavy, and didn't move nearly as quickly as it does today. And you know what, at 140% short, GME was still way more shorted than VW. And they will hold that record for a while. But somehow despite being in an absolutely unprecedented situation, we should believe that we would have seen a short squeeze that should just have led to a 10-20 or even 50% upside? Just like your arguments on "HFs would never take such a risk and lose that much on a trade" after seeing 2 funds doing exactly that literally days ago. Do you believe your own arguments?

No matter, I don't even care what technically drove the price higher. It's certainly not fundamentals, despite how you want to bring that in the discussion  . It is clearly technical price action and gambling. But that's fine in my book. Do you know a single market where price is solely based on fundamentals? Hedge funds wouldn't even exist. What is just particularly shitty in that situation is that as the situation unfolded, it became apparent that even the gambling was super rigged, and that if you try to play the same game as the HFs, they won't tolerate it and change the rules. Clearly you don't mind, but again- many people do mind, and that's my only real point here.


----------



## StevenC

Drew said:


> Sigh. This isn't even a debate, this is you refusing to stand by anything you've said.


You should read the "Kiesel Never Again" thread.


----------



## penguin_316

In regards to the investments, you ignored to acknowledge the fact that the US dollar is in a general death spiral and has been for 50 years.

On top of that inflation of valuable assets are skyrocketing, your marginal yield over 10 years is irrelevant. It will buy marginally more than it did 10 years ago, if that...


----------



## Drew

mbardu said:


> Yes at least we agree, what you are doing is nitpicking.
> Choose to put the arbitrary distinction of where the short squeeze ended in your mind (if it happened at all), and when supposedly the "rest" of the price action played out in order to argue on a technicality, I hardly see the point, but up to you.


I mean, if your investment thesis is "this is a short squeeze," it matters HUGELY if the short squeeze was over on Monday, or on Wednesday. Doubly so if you bought on or after Monday

Or, taking it a step further, if it doesn't matter _why_ the price was increasing, so much that it _was_ increasing, why have an investment thesis at all? Why target heavily shorted stocks in the first place, if what's driving it higher doesn't matter, just that the price IS going higher?


----------



## Drew

penguin_316 said:


> In regards to the investments, you ignored to acknowledge the fact that the US dollar is in a general death spiral and has been for 50 years.
> 
> On top of that inflation of valuable assets are skyrocketing, your marginal yield over 10 years is irrelevant. It will buy marginally more than it did 10 years ago, if that...


Nah, I didn't ignore it, I just don't agree with you that the US dollar "is in a general death spiral."



StevenC said:


> You should read the "Kiesel Never Again" thread.


I've read parts. Next time I have a shred of hope for humanity I need to debase, though...


----------



## Drew

mbardu said:


> What is just particularly shitty in that situation is that as the situation unfolded, it became apparent that even the gambling was super rigged, and that if you try to play the same game as the HFs, they won't tolerate it and change the rules. Clearly you don't mind, but again- many people do mind, and that's my only real point here.


Actually, here's something I can dig in a little on. 

I disagree that GME collapsed because "HFs wouldn't tolerate it and change the rules." That collapse was inevitable. What might surprise you a little, is I think the intial short squeeze was actually a _good_ thing for market efficiency. It was a crowded trade, there are risks for being in a crowded trade, those funds didn't adequately account for those risks, and they took it on the chin for it. The flip side, of course, is that the run-up in GME's price was _also_ an extremely crowded trade, and while arguably it's good for market efficiency that retail buyers are now seeing the risks (at least, I hope they are) of piling in on a crowded trade, it was a pretty avoidable risk and a lot of small investors are paying for that now. 

tl;dr - hedge funds should know better than to be a naked short with 120-140% short interest without _some_ sort of hedge, but retail investors should also know better than to trade on "YOLO! Stonks => up! To the moon! Aboard the rocket ship!" and some sort of equilibrium where both parties think twice before doing that would be a good thing, IMO. 

I'm just glad I got one guy in this thread out of GME while he was ahead.


----------



## mbardu

Drew said:


> I mean, if your investment thesis is "this is a short squeeze," it matters HUGELY if the short squeeze was over on Monday, or on Wednesday. Doubly so if you bought on or after Monday
> 
> Or, taking it a step further, if it doesn't matter _why_ the price was increasing, so much that it _was_ increasing, why have an investment thesis at all? Why target heavily shorted stocks in the first place, if what's driving it higher doesn't matter, just that the price IS going higher?



Two answers to that:

Although it's easy to refer to it like that for brevity, it's not a literal strict short squeeze, as it's combined with a gamma squeeze. Shorts were hurting all the same.
Momentum is a thing and momentum was _clearly _there until the blatant manipulations.
One more example of rigged system here. There are plenty of funds who specialize in only momentum trading. People much more wealthy than either of us pay them big $$$ for their work. Nobody cares and nobody is implying (like you do) that they don't have an "investment thesis". Again, double standards. It's not fundamentals-driven investment we're talking about, it's just capitalizing on market price action. That's fine for hedge funds, but WSB-driven momentum though, we immediately have to shut it down because Citadel is hurting and IBKR thinks it should be worth 17$? Or demean it because it's not a hedge fund doing it?

Again... R I G G E D.


----------



## TedEH

What I got out of all of this is that now my phone autocorrects TO stonks instead of the correct word.


----------



## mbardu

Drew said:


> Actually, here's something I can dig in a little on.
> 
> I disagree that GME collapsed because "HFs wouldn't tolerate it and change the rules." That collapse was inevitable. What might surprise you a little, is I think the intial short squeeze was actually a _good_ thing for market efficiency. It was a crowded trade, there are risks for being in a crowded trade, those funds didn't adequately account for those risks, and they took it on the chin for it. The flip side, of course, is that the run-up in GME's price was _also_ an extremely crowded trade, and while arguably it's good for market efficiency that retail buyers are now seeing the risks (at least, I hope they are) of piling in on a crowded trade, it was a pretty avoidable risk and a lot of small investors are paying for that now.
> 
> tl;dr - hedge funds should know better than to be a naked short with 120-140% short interest without _some_ sort of hedge, but retail investors should also know better than to trade on "YOLO! Stonks => up! To the moon! Aboard the rocket ship!" and some sort of equilibrium where both parties think twice before doing that would be a good thing, IMO.
> 
> I'm just glad I got one guy in this thread out of GME while he was ahead.



Again, nobody argued that the collapse wouldn't come. Why continue with the strawman? Of course it was inevitable at some point, the stock price belongs below 30$ long term. 

But just check the 28th price action, exactly at 7 Pacific / 10 Eastern, exactly as retail and buying were being suppressed. Perfect 5 minute candles. Zero green, multiple gaps, a full -75% off within 2 hours. Tell me if this looks organic to you. Tell me if you can call that anything but rigged or manipulated.


----------



## mbardu

TedEH said:


> What I got out of all of this is that now my phone autocorrects TO stonks instead of the correct word.



Should hopefully also autocomplete to "stonks _only go up brrp brrp_" for completeness sake.


----------



## Drew

mbardu said:


> Again, nobody argued that the collapse wouldn't come. Why continue with the strawman? Of course it was inevitable at some point, the stock price belongs below 30$ long term.


What straw man?



mbardu said:


> That's fine for hedge funds, but WSB-driven momentum though, we immediately have to shut it down because Citadel is hurting and IBKR thinks it should be worth 17$? Or demean it because it's not a hedge fund doing it?


Hey, again, I have no problem with hedge funds losing money. What you're calling momentum is what I'm calling chasing past performance, but hey, plenty of retail investors do that too. Thing is, though, momentum is a thing until it isn't, and if you want to make money trading momentum, then you kinda have to know when to get out of a trade. 

But, again, you're saying that this wasn't a short squeeze after all, now, but a momentum trade. That's kind of the point I've been making all along, this stopped being a short squeeze _well_ before we started talking about it, and continuing to hold on while talking about short positions as justifications is a recipe to get hit just as hard as the hedge funds you're going after.


----------



## mbardu

Drew said:


> What straw man?
> 
> 
> Hey, again, I have no problem with hedge funds losing money. What you're calling momentum is what I'm calling chasing past performance, but hey, plenty of retail investors do that too. Thing is, though, momentum is a thing until it isn't, and if you want to make money trading momentum, then you kinda have to know when to get out of a trade.
> 
> But, again, you're saying that this wasn't a short squeeze after all, now, but a momentum trade. That's kind of the point I've been making all along, this stopped being a short squeeze _well_ before we started talking about it, and continuing to hold on while talking about short positions as justifications is a recipe to get hit just as hard as the hedge funds you're going after.



The straw man is that the stock was going to stay high obviously...
Every reply, you keep arguing against an imagined case that somehow the stock was _not_ going to collapse at some point. Everybody knows it was about to collapse at some point. The question was "how high is it going to go in the meantime with exponential retail buying added to the pile?".

As for the meat of your reply, now you are arguing semantics. People started to call it a "short squeeze" because even though it didn't match the strict definition, there were too many shares short, and the price was rising sharply as a result. It had components of gamma squeeze, it had a lot of momentum, both intrinsic, and due to the hype surrounding it. Nothing is all black and white. But everyone started calling it a short squeeze so that's the term that stuck. Call it what you want though, but it was on a pretty uninterrupted trend until the blatant manipulation and retail buy suppression.

If you want to look at the chart and see if it looks like organic price action to you, or for that matter any other rigged aspect of that whole debacle, please feel free to do so. Doesn't sound like any HF shenanigan bothers you though...only retail investors are somehow in the wrong. Otherwise, just arguing names for the sake of pedantry is beating around the bush and not changing what happened.

Edit: and btw I'm not arguing the GME trade was a smart one, that should have had guaranteed returns for entrants at 100$+. Again, it was gambling. So the point about "that was not a great investment thesis" is pretty much moot. That's not the issue. My problem would be that it became a fundamentally _unfair _one because the only way for it to succeed (retail buying) was stopped halfway through by people with an interest in preventing the stock from going up, with no way for the longs to do anything about it. That's the rigged part. You may think a game with 1/10 chances of winning is a dumb move, and that's your call - but people who like to gamble and take those odds are right to be pissed if the dealer makes those odds 0/10 the moment it looks like they're winning.


----------



## TedEH

mbardu said:


> any other rigged aspect





mbardu said:


> blatant manipulation





mbardu said:


> Doesn't sound like any HF shenanigan bothers you though...only retail investors are somehow in the wrong


If I'm following this, it kinda sounds like you're arguing against a point that Drew never made. It looks (to me) like you're arguing against this idea that Drew is somehow in favour of HFs "winning" and manipulating some unseen/unknown "rules" - but I don't think he ever made that point, or implied it. Nobody at any point said that investors were in the wrong. 

I know there was a block put on trading GME through some apps for a short while, but that's the fault of Robinhood/etc, not necessarily the funds themselves, isn't it? And as far as I'm aware, that was reversed shortly anyway. What manipulation or cheating etc. is otherwise going on? I'm asking that legitimately, 'cause I don't follow what about this situation makes it "rigged".


----------



## mbardu

TedEH said:


> If I'm following this, it kinda sounds like you're arguing against a point that Drew never made. It looks (to me) like you're arguing against this idea that Drew is somehow in favour of HFs "winning" and manipulating some unseen/unknown "rules" - but I don't think he ever made that point, or implied it. Nobody at any point said that investors were in the wrong.
> 
> I know there was a block put on trading GME through some apps for a short while, but that's the fault of Robinhood/etc, not necessarily the funds themselves, isn't it? And as far as I'm aware, that was reversed shortly anyway. What manipulation or cheating etc. is otherwise going on? I'm asking that legitimately, 'cause I don't follow what about this situation makes it "rigged".



No it's more that Drew is arguing over and over against a point I didn't make so I keep re-emphasizing my position.
(this is keeping aside for a minute the side conversation and his flip-flopping on things like "we know the daily short interest if it serves my point, but we don't know if it serves yours", because anyway, that's only speculation on things we don't know for sure - and it doesn't change the core of the issue, only the minutiae).

My point has never been "GME is a sound investment guaranteed to give you good returns" like it's being protrayed. That was impossible to say one way or the other for sure last week, and is looking less likely to "moon" by the day.
My point instead is that it's a fun gamble (not investment) to watch, that has already been quite profitable to some, and could have been more profitable to more; but that above all and no matter which way it goes, it does show how that system is rigged.

On that part, I've mentioned a few things already, and I'll leave aside the media bias (some have now changed their tone, but last week was extremely demeaning to retail until some people like Chamath pushed back), the explicit admission that some higher ups won't allow trading unless they personally feel its fair in their opinion, the fact that nobody actually denounces the reason of that whole mess (excessive to likely illegal shorting), and myriad other examples, but I'll just point you to the same data point I mentioned above.

January 28th 7 Pacific / 10 Eastern.

Just as the stock was mooning to 500$. RH and other brokers abruptly stop the buying of GME outright, essentially stopping the momentum and retail.
For the next two hours, without _any buying_, there is a systematic orchestrated sale that make the stock lose 75% of its value (400+ to about 100) with no counter move whatsoever. As soon as it reaches 110, RH liquidates GME positions of large stock holder (and only GME stock, even for people with large accounts and other holdings). No possibility to buy back of course. Even including the positions of people who were not trading on margin. Only GME? Even on non-margin? Come on...
As this happens and completes- which _should _send the price mechanically even lower (selling more and more at market value as in liquidation pushes the price down), instead the price shoots right back up again, so that all those shares bought for cheap (~100) without the consent of their holder triple in value back to 300$, without any way for retail to participate in the "rally" (they're now locked out of buying, remember). Again, without any counter move whatsoever
This just doesn't happen. Lose 75% of its value, then gain +200%, without any resistance whatsoever? In ~3 hours? Never seen it happen before, but happy to see similar ones if anyone has examples that come even close.

As for "how is that related to RH", well maybe not directly, or at least that would be hard to prove. And RH was not even the only broker involved, nor do they need to actively participate if the suspected ladder attacks are done well. Just interesting tidbit about RH is that they are essentially owned under the same parent company (Citadel) that is set to lose the 3B they gave Melvin Capital if that fund was to go under. So there's certainly incentive there. And that was a very real possibility considering that the fund was down 53% in January.


----------



## MrWulf

A cursory look in r/wsb shows that they are still holding and some are anticipate a short squeeze 2.0

Idk how they can keep that level of confidence and i kind of admire that


----------



## Demiurge

^Sometimes people forget that their online communities don't have as much influence in the outside world as they think. In other news, I'm still shocked that Ibanez hasn't folded from failing to produce that $599 Prestige line with fanned SS frets, Fluences AND BKPs together, and Evertune Edge.


----------



## Avedas

I think GME is very bullish overall and a great long term play. They just announced their new CTO which was an excellent move. I think Ryan Cohen will effectively take over the company within 2-3 years.

However anyone who bought in the triple digit prices and is still holding is certifiably insane lol. I'd love to be proved wrong on that, but I just don't see it. There is no way that company is even worth $40 based on fundamentals without seeing tangible changes and delivery from the company. I think they'll do really well once short attention moves away from them. I wish I sold earlier but I still made multiple times my investment so I can't complain too much! Learned a lot about trading and my own tolerances and biases.

I'm only slightly disappointed that what I thought was a great stock pick that I got into early enough turned into a total meme parade. I wanted to feel smart for once.


----------



## penguin_316

Drew said:


> Nah, I didn't ignore it, I just don't agree with you that the US dollar "is in a general death spiral."
> 
> 
> I've read parts. Next time I have a shred of hope for humanity I need to debase, though...



Here is the DXY and it goes back to 1986 on the monthly. Zoom out and use monthly candles. Homie that’s a death spiral, I can’t even take you seriously anymore. Also, if we go a hair lower we will be in a legitimate point of no return down to the levels last seen in May of 2008.

The dollar is indeed in a death spiral, relative to other currencies and is easily verified via the DXY index. Now, it still retains value as the worlds reserve currency....but for how long.


----------



## mbardu

Avedas said:


> I think GME is very bullish overall and a great long term play. They just announced their new CTO which was an excellent move. I think Ryan Cohen will effectively take over the company within 2-3 years.
> 
> However anyone who bought in the triple digit prices and is still holding is certifiably insane lol. I'd love to be proved wrong on that, but I just don't see it. There is no way that company is even worth $40 based on fundamentals without seeing tangible changes and delivery from the company. I think they'll do really well once short attention moves away from them. I wish I sold earlier but I still made multiple times my investment so I can't complain too much! Learned a lot about trading and my own tolerances and biases.
> 
> I'm only slightly disappointed that what I thought was a great stock pick that I got into early enough turned into a total meme parade. I wanted to feel smart for once.



Nobody has attempted to, or will try to prove you wrong on fundamentals. Even 40$ is quite aggressive indeed.

How big of a millionaire are you if you got into early  ? Meme or not meme, those who got in at the same time as Burry / DFV made absolute bank.


----------



## spudmunkey

I have been seeing some really perplexing chatter from my right wing family members on social media. They keep sharing memes and podcasts videos talking about how the left is responsible for the fall out from Wall Street bets.

One meme starts with "they stopped counting 5 states when it wasn't going their way. They stopped free speech when it wasn't going their way" which is...*sigh*, whatever...but then it continues, "they shut down stock drawing when it wasn't going their way".

Is this actually a narrative from right-wing media that the shit show following the GME rally was liberals and 'big tech'?


----------



## Drew

mbardu said:


> No it's more that Drew is arguing over and over against a point I didn't make so I keep re-emphasizing my position.
> (this is keeping aside for a minute the side conversation and his flip-flopping on things like "we know the daily short interest if it serves my point, but we don't know if it serves yours", because anyway, that's only speculation on things we don't know for sure - and it doesn't change the core of the issue, only the minutiae).


No, my point from day one, which you keep side stepping, is it looks an awful lot like most of the shorts that predated the run-up in GME's price were closed by Monday, and reported short interest numbers are suspect in real time so continuing to point to the 140% short interest at the start of the week which fell to 120% by the end of the week as evidence of a ton of short interest misses the fact that those numbers are on a two week lag. Some of the very sources you posted to trying to argue with me are the ones now saying short interest has fallen into the 50s. 

Devil's advocate, then - what do you think would have happened to GME's stock price had Robinhood not restricted margin purchases and then opening new positions?


----------



## Drew

penguin_316 said:


> Drew, normally you make decent arguments, but I really have to push back on a lot of these points.
> 
> You are correct there was no short squeeze on the hedge funds(yet), there were gamma squeezes though caused by the inability to find shares for ITM call options. That is why Melvin needed a $3+billion bailout from Citadel.


Sorry man, missed this earlier. Two quick points, my understanding was Melvin was short the stock, not options in the stock, but hypothetically, say they were short calls in GME, and say those were physical delivery and no cash settlement calls, they could have closed easily enough in two other ways, by selling the call, or by purchasing an offsetting long call in GME at the same strike price and expiration date and offsetting them at the exchange level.

EDIT - and moot point anyway, as both Melvin and Citron have confirmed that they closed their positions earlier that week, Melvin on Tuesday when the stock traded from $80-140, and Citron "at a price of around $90 a share," which would _also_ imply they closed Tuesday, which is pretty much what I've been saying all along.  Wednesday and Thursday weren't a short squeeze or a "gamma squeeze," and if options were the culprit I believe Friday was the expiration day so that's when you would have seen some fireworks, instead of a ~50% decline in the share price. 

Broken record here, but if the goal here was to hurt hedge funds, then right on, but that trade was done before the stock broke $140 a share. Everything else appears to be retail buyers bidding the stock up in a bubble, thinking shorts would still have to cover at some point. 

End Edit



penguin_316 said:


> Here is the DXY and it goes back to 1986 on the monthly. Zoom out and use monthly candles. Homie that’s a death spiral, I can’t even take you seriously anymore. Also, if we go a hair lower we will be in a legitimate point of no return down to the levels last seen in May of 2008.
> 
> The dollar is indeed in a death spiral, relative to other currencies and is easily verified via the DXY index. Now, it still retains value as the worlds reserve currency....but for how long.


I'd love to see that chart, frankly. I'm looking at DXY since 1/1/1966, and barring a spike in the early 80s when Volker went to war against double-digit inflation (and the dollar strengthened as short term rates ratcheted higher), DXY has been pretty consistently range-bound between 80 and 120. If you're seeing something different, I'd appreciate it if you could point me to it.


----------



## Mathemagician

The entire thread Drew has just been saying “whoever holds this too long is likely going to end up a bag holder, and it’s impossible to promise to know when to exit”. 

That’s it, man has just been trying to not hype shit up for the sake of hyping it. 

I don’t know how that is a doom & gloom prediction?


----------



## Drew

Mathemagician said:


> The entire thread Drew has just been saying “whoever holds this too long is likely going to end up a bag holder, and it’s impossible to promise to know when to exit”.
> 
> That’s it, man has just been trying to not hype shit up for the sake of hyping it.
> 
> I don’t know how that is a doom & gloom prediction?


Thanks man. I guess silly me, should have just gotten on the damned rocket ship.


----------



## mbardu

Drew said:


> No, my point from day one, which you keep side stepping, is it looks an awful lot like most of the shorts that predated the run-up in GME's price were closed by Monday, and reported short interest numbers are suspect in real time so continuing to point to the 140% short interest at the start of the week which fell to 120% by the end of the week as evidence of a ton of short interest misses the fact that those numbers are on a two week lag. Some of the very sources you posted to trying to argue with me are the ones now saying short interest has fallen into the 50s.
> 
> Devil's advocate, then - what do you think would have happened to GME's stock price had Robinhood not restricted margin purchases and then opening new positions?



I actually do agree a lot of shorts probably exited at 100$, so no disagreeing here. Never said shorts from 4$ were still there when the stock was at 400  .
I however also think it's likely that plenty of others jumped _back in _at 200/300, like you said _yourself _looked like a good move. I wouldn't even be surprised if Melvin would have been among them. And it clearly looks like _those _had a golden opportunity to exit on the manufactured drop to 100$ once the shit was hitting the fan towards 500$. Whew, what a lucky coincidence 

I don't present S3/Ortex as gospel. Just as a data point among others point to be open to and think about the implications.
You're the one flip-flopping on them, only liking them when you think they serve your point, demeaning them otherwise (like a rear view mirror to drive on the highway amirite, except when they serve your argument)  . I don't have any reason to doubt them a priori when they say the short has now dropped for example, but then again, I don't pretend I know for sure.

What would or could have happened? Just check the momentum early January 28th. A bit of a battle sure, but still heavy upwards momentum. We were at the top of the hype, and it was almost at 500$. It could certainly have doubled again. Who are we to say otherwise, it had doubled a couple of times already the week before. If you _now _trust S3/Ortex apparently, then short at that point was still reported at over 100% - with the stock doubled in price compared to the day prior. 1000$ would have certainly hurt for those 100% of shorts.

Do I _know for sure _it could have reached 1000$? No, unlike some people, I don't pretend to know for sure and use some sources to selectively justify my bias only when it suits me  . But it's a possibility. We won't know for sure anyway, because it was blatantly manipulated (which still doesn't concern you), so that did not happen.

Now, does this mean it would have gone to 1000$ and stayed there? Of course not. We all know the company and the share's worths. It's going to 15$ one way or another.
But for a bit, it could definitely have killed a few short whales while putting some $$$ in WSB's pockets.



Mathemagician said:


> The entire thread Drew has just been saying “whoever holds this too long is likely going to end up a bag holder, and it’s impossible to promise to know when to exit”.
> 
> That’s it, man has just been trying to not hype shit up for the sake of hyping it.
> 
> I don’t know how that is a doom & gloom prediction?



No doom and gloom, and definitely anyone going long on GME was doing dangerous gambling for sure.
To cut off even that gambling by changing the rules mid-game while the gambler happens to be winning just rubs some people the wrong way though.


----------



## Mathemagician

I agree with that. Robinhood/Citadel/clearing houses/other HF’s should NOT have gotten a life preserver that allowed them to flip positions after changing the rules mid game. 

But given that Janet Yellen has allegedly received massive speaking fees from Citadel I don’t see regulators punishing anyone who strong-armed retailers and ruined their winning trade.


----------



## Demiurge

spudmunkey said:


> One meme starts with "they stopped counting 5 states when it wasn't going their way. They stopped free speech when it wasn't going their way" which is...*sigh*, whatever...but then it continues, "they shut down stock drawing when it wasn't going their way".
> 
> Is this actually a narrative from right-wing media that the shit show following the GME rally was liberals and 'big tech'?



All those goddamned socialist hippies in the world of high finance . I guess when you're a hammer, everything is a nail, and liberal conspiracies are the thing now. It's actually impressive at WSB that even though there certainly an air of conspiracy bandied-about, the members seem good at keeping politics out of it.


----------



## mbardu

Mathemagician said:


> I agree with that. Robinhood/Citadel/clearing houses/other HF’s should NOT have gotten a life preserver that allowed them to flip positions after changing the rules mid game.
> 
> But given that Janet Yellen has allegedly received massive speaking fees from Citadel I don’t see regulators punishing anyone who strong-armed retailers and ruined their winning trade.



Regulatory capture. 
Riggers gonna rig'


----------



## Drew

Mathemagician said:


> I agree with that. Robinhood/Citadel/clearing houses/other HF’s should NOT have gotten a life preserver that allowed them to flip positions after changing the rules mid game.
> 
> But given that Janet Yellen has allegedly received massive speaking fees from Citadel I don’t see regulators punishing anyone who strong-armed retailers and ruined their winning trade.


SEC is looking into it. That said, considering Robinhood tapped about $1.1b in lines of credit and then took capital infusions of $2.3B to help them meet exchange margin requirements, I think the more likely story here is they simply couldn't afford to keep opening long positions. They're a shoddily run company, remember these are the same guys who got nailed by the SEC for selling client orders to high frequency traders for execution, which would be shady even if they were disclosing it.



mbardu said:


> I actually do agree a lot of shorts probably exited at 100$, so no disagreeing here. Never said shorts from 4$ were still there when the stock was at 400  .
> I however also think it's likely that plenty of others jumped _back in _at 200/300, like you said _yourself _looked like a good move. I wouldn't even be surprised if Melvin would have been among them. And it clearly looks like _those _had a golden opportunity to exit on the manufactured drop to 100$ once the shit was hitting the fan towards 500$. Whew, what a lucky coincidence
> 
> I don't present S3/Ortex as gospel. Just as a data point among others point to be open to and think about the implications.
> You're the one flip-flopping on them, only liking them when you think they serve your point, demeaning them otherwise (like a rear view mirror to drive on the highway amirite, except when they serve your argument)  . I don't have any reason to doubt them a priori when they say the short has now dropped for example, but then again, I don't pretend I know for sure.
> 
> What would or could have happened? Just check the momentum early January 28th. A bit of a battle sure, but still heavy upwards momentum. We were at the top of the hype, and it was almost at 500$. It could certainly have doubled again. Who are we to say otherwise, it had doubled a couple of times already the week before. If you _now _trust S3/Ortex apparently, then short at that point was still reported at over 100% - with the stock doubled in price compared to the day prior. 1000$ would have certainly hurt for those 100% of shorts.
> 
> Do I _know for sure _it could have reached 1000$? No, unlike some people, I don't pretend to know for sure and use some sources to selectively justify my bias only when it suits me  . But it's a possibility. We won't know for sure anyway, because it was blatantly manipulated (which still doesn't concern you), so that did not happen.
> 
> Now, does this mean it would have gone to 1000$ and stayed there? Of course not. We all know the company and the share's worths. It's going to 15$ one way or another.
> But for a bit, it could definitely have killed a few short whales while putting some $$$ in WSB's pockets.
> 
> 
> 
> No doom and gloom, and definitely anyone going long on GME was doing dangerous gambling for sure.
> To cut off even that gambling by changing the rules mid-game while the gambler happens to be winning just rubs some people the wrong way though.


Ok, real quick, three things.

1) I've been very clear that we don't know what short interest is in a name in _real time_. That's a very different story than saying we don't know what it was _historically_. If it was unclear when I said that we now have a pretty good picture of what was happening to short interest at the start of last week, and that came across as my saying we have a good idea what short interest is _today, _then I apologize for the confusion, but I was absolutely talking about last week and not real time data.

2) Frankly I'd never even heard of S2 and Ortex before you pointed them out to me, but you pointed to them as sources that were saying short interest was _still_ around 120%, back on Friday. They's now both saying that short interest fell heavily week over week, aka pretty much what I'd been saying.

3) You realize that Robinhood was only one trading platform, and a rather small one at that, right? And that most other trading platforms and brokerages, including the one I use, still allowed users to transact in GME, though on mine margin requirements were increased 50% (which makes sense, anyone buying GME this week on margin is an idiot, and losses would quickly become the platform's problem if it was bought on margin). And beyond that, when Robinhood allowed unrestricted cash basis purchases again on Friday, it merely bounced to the ballpark of Wednesday's levels before trading off the rest of the day and Friday? Suggesting it would have continued to rise defies all the evidence we have. Demand wasn't there. Short interest had evaporated. End of story.

Also:



mbardu said:


> Do I _know for sure _it could have reached 1000$? No, unlike some people, I don't pretend to know for sure and use some sources to selectively justify my bias only when it suits me  .


Geting snide here REALLY doesn't suit you.


----------



## mbardu

Drew said:


> SEC is looking into it. That said, considering Robinhood tapped about $1.1b in lines of credit and then took capital infusions of $2.3B to help them meet exchange margin requirements, I think the more likely story here is they simply couldn't afford to keep opening long positions. They're a shoddily run company, remember these are the same guys who got nailed by the SEC for selling client orders to high frequency traders for execution, which would be shady even if they were disclosing it.
> 
> 
> Ok, real quick, three things.
> 
> 1) I've been very clear that we don't know what short interest is in a name in _real time_. That's a very different story than saying we don't know what it was _historically_. If it was unclear when I said that we now have a pretty good picture of what was happening to short interest at the start of last week, and that came across as my saying we have a good idea what short interest is _today, _then I apologize for the confusion, but I was absolutely talking about last week and not real time data.
> 
> 2) Frankly I'd never even heard of S2 and Ortex before you pointed them out to me, but you pointed to them as sources that were saying short interest was _still_ around 120%, back on Friday. They's now both saying that short interest fell heavily week over week, aka pretty much what I'd been saying.



This is still the same selective argument. You can't have your cake and it eat too.
Either we _can _know short interest with a small lag (nobody said real time, stop with the strawman arguments), or we _cannot_.

If you believe we _can_, then reporting on the 29/30 was still showing very elevated interest, so that would have still meant very elevated interest during the 28th situation (that you kept avoiding any reply to). Reporting now shows short interest more than half- which again, I have no reason to doubt in principle.

If you believe we _cannot_, then you have no way to know, not today, not last week, not until the 9th, and you can't selectively say "I know it was down last week" , and "we know it's down 50% today haha look I was right all along". Most likely that's true TBH, especially now after last week's fiasco, but we would have to wait for the 9th to know per your own argument.

Make your call- can't have it both ways.



Drew said:


> 3) You realize that Robinhood was only one trading platform, and a rather small one at that, right? And that most other trading platforms and brokerages, including the one I use, still allowed users to transact in GME, though on mine margin requirements were increased 50% (which makes sense, anyone buying GME this week on margin is an idiot, and losses would quickly become the platform's problem if it was bought on margin). And beyond that, when Robinhood allowed unrestricted cash basis purchases again on Friday, it merely bounced to the ballpark of Wednesday's levels before trading off the rest of the day and Friday? Suggesting it would have continued to rise defies all the evidence we have. Demand wasn't there. Short interest had evaporated. End of story.
> 
> Also:
> 
> 
> Geting snide here REALLY doesn't suit you.



Sure sure, as before it's technically true. But it's just a tad surprising that RH liquidated GME, and specifically GME. Specifically at the right time at the very bottom too! Even for people who had larger holdings in other names. Even including people who were not trading on margin. Why not liquidate other names of those GME holders who no longer had enough margin? Why go and sell GME from other holders instead - even those without margin? Specifically after a -75% drop and just before a +200% increase too? Nothing suspicious at all here I guess?

It's useless to say "look, buying didn't resume on friday", that's a moot point. 1-Once momentum is gone, it's gone. 2-Once those shorts exited at 100$ at RH users' expense on that magical drop to 100, they're out, they no longer feel the pressure. So of course it was done on Friday. It was done after those 3 hours of unprecedented manipulated action. Worst is, you know very well that this argument is moot. You know very well that killing momentum would kill such a trade. You don't have to bring up a bad faith argument just to muddy the waters, that's just A+ level of dishonest.

Also, I specifically didn't single out RH. They are not the only participants for sure, they were not the only ones with restrictions, and you know how momentum is easy to stop. As far as they are concerned, I just wanted to show a few tidbits of how they could be even more suspicious than the others. Not problematic or suspicious to you, fair enough.



Drew said:


> Geting snide here REALLY doesn't suit you.



I don't want to be snide, but it's infuriating. You don't have to beat the dead horse with the same strawman arguments, patronization, bad faith arguments, and then picking supporting data to make your case then discarding the same exact data when it actually turns against you.

Again, yeah a lot of things you say are technically true. A lot of your speculation is likely what happened too. Including the fact that going short at 200/300 would have appeared to be a good move at the time and it's likely a lot of people made just that move (to exit on that magical 100$ drop for a nice profit at retail's expense...isn't that just sweet and dandy). Much like the stock going back to 15$, we didn't question that. Same as agreeing that nobody should go in a GME trade expecting to be a sound investment. Nobody argued that. Literally it was a gamble.
Those points are irrelevant and there's no merit in those arguments because they were the same exact arguments that everybody made before the three prior +100% jumps, yet it did double time and time again. There was simply no telling whether it could double once more...until the momentum was artificially broken by brokers/clearing houses/HFs/take your pick. So instead of liquidating a hungry over-leveraged HF, it's those RH margin users who were liquidated in the course of a few minutes, and saw their shares sold for 110$ when they were worth triple that an hour earlier or later.

The way all of it unfolded is as usual a great example of how the whole thing is rigged, and there's no two ways about it.


----------



## TedEH

This is now basically the "Drew says some things that sound reasonable to me but I don't fully understand them, and mbardu shouts that everyone is wrong and everything is rigged" thread.


----------



## MaxOfMetal

TedEH said:


> This is now basically the "Drew says some things that sound reasonable to me but I don't fully understand them, and mbardu shouts that everyone is wrong and everything is rigged" thread.



What you have to understand is that he's in it just for the argument. Not to win/lose or change opinions or better express a view, but just the act of the back and forth. That's the endgame. 

You just have to let go. That's what I've gotten better at. Still gets me sometimes. The dude is _good_.


----------



## TedEH

It's nice for it not to be me doing it this time .


----------



## MaxOfMetal

TedEH said:


> It's nice for it not to be me doing it this time .



Fool me once...


----------



## mbardu

MaxOfMetal said:


> You just have to let go. That's what I've gotten better at. Still gets me sometimes. *The dude is good.*



I appreciate the compliment, but I gotta be humble here. 
I just learned from the best


----------



## Drew

TedEH said:


> This is now basically the "Drew says some things that sound reasonable to me but I don't fully understand them, and mbardu shouts that everyone is wrong and everything is rigged" thread.


Yeah, you know, honestly, I'm wasting my time here. I'm out. I'm arguing with a guy who says he AGREES most of the shorts were out by $100/share, yet telling me I'm "being inconsistent" when I say that the shorts were out by a day when the stock traded between $80 and $140. I've got better things to do with my free time. You all have fun with him.


----------



## mbardu

Drew said:


> Yeah, you know, honestly, I'm wasting my time here. I'm out. I'm arguing with a guy who says he AGREES most of the shorts were out by $100/share, yet telling me I'm "being inconsistent" when I say that the shorts were out by a day when the stock traded between $80 and $140. I've got better things to do with my free time. You all have fun with him.



Cheers to you if you're done!
No need to voluntarily mischaracterize what I said on the way out just to get a cheap "ha ha!", because you don't want to answer. That's just bad faith.

I keep saying _other shorts_ likely came in at 200/300, like _you_ were the first to suggest was a good idea at the time. So those are obviously two entirely different things.
And you know it. So trying to pretend otherwise is just admitting 100% you were not even _trying _to be genuine, even in your last post.

Anyway, bye!


----------



## Drew

mbardu said:


> Cheers to you if you're done!
> No need to voluntarily mischaracterize what I said on the way out just to get a cheap "ha ha!", because you don't want to answer. That's just bad faith.
> 
> I keep saying _other shorts_ likely came in at 200/300, like _you_ were the first to suggest was a good idea at the time. So those are obviously two entirely different things.
> And you know it. So trying to pretend otherwise is just admitting 100% you were not even _trying _to be genuine, even in your last post.
> 
> Anyway, bye!


Sigh. There are two sorts of people in this world; those who can extrapolate from incomplete data. Later!


----------



## Avedas

mbardu said:


> Nobody has attempted to, or will try to prove you wrong on fundamentals. Even 40$ is quite aggressive indeed.
> 
> How big of a millionaire are you if you got into early  ? Meme or not meme, those who got in at the same time as Burry / DFV made absolute bank.


I was in a few months ago, so certainly not that early  Definitely didn't yolo in either, just threw a bit of play money at it. I was going to sell at earnings call to cash in on the new console cycle, but we never made it there.


----------



## Demiurge

So Elon Musk tweeted something weird and some people on the sub think that it's signaling that he's going to buy GameStop. It's kinda-sorta approaching QAnons watching the inauguration & waiting for the mass arrest level of delusion but who knows- the stock market has nothing on reality when it comes to volatility.


----------



## mbardu

Demiurge said:


> So Elon Musk tweeted something weird and some people on the sub think that it's signaling that he's going to buy GameStop. It's kinda-sorta approaching QAnons watching the inauguration & waiting for the mass arrest level of delusion but who knows- the stock market has nothing on reality when it comes to volatility.



Yeah it's sad now. GME has been dead since last week, time to let it go back down to where it belongs.
Even the original guy, u/DFV is stopping his posts now.


----------



## Avedas

I hope some of those people hedged with puts (they didn't).


----------



## fantom

Drew said:


> You realize that Robinhood was only one trading platform, and a rather small one at that, right? And that most other trading platforms and brokerages, including the one I use, still allowed users to transact in GME



It was not only Robinhood. TD Ameritrade, Vanguard, E*trade, and several other major brokers blocked transactions as well. Just because your broker allowed trading doesn't mean that the situation was fine. If people using Robinhood tried to create accounts on other platforms, transfer cash, then wait for a 3 day holding period on their wire transfer, just to find out that the new platform also blocked trading GME, it would have been silly.

And in the event people opened accounts on other platforms, you have to remember that the IRS charges taxes on a FIFO policy. So you would have to guarantee to sell the stocks across multiple brokerages in the right order or to avoid tax mess. Overriding the cost basis on stock transactions is probably a red flag for audits.

So no, people really didn't have an option to find a brokerage allowing GME and transfer funds easily.


----------



## mbardu

Avedas said:


> I hope some of those people hedged with puts (they didn't).



Very much doubt so considering the IV and the price of those puts.
You could have hedged by selling calls...except of course that was forbidden for retail, even covered calls.
All allowed for institutions of course


----------



## Avedas

mbardu said:


> Very much doubt so considering the IV and the price of those puts.
> You could have hedged by selling calls...except of course that was forbidden for retail, even covered calls.
> All allowed for institutions of course


Puts definitely printed the last couple days. Made some lunch money on the way down. I'll see how Friday premarket goes to see if it's worth scraping some more change out of the stragglers. I think it'll blow past 40 by next week but not sure if the recent news will have the price settle at 20 or 30.


----------



## narad

Avedas said:


> Puts definitely printed the last couple days. Made some lunch money on the way down. I'll see how Friday premarket goes to see if it's worth scraping some more change out of the stragglers. I think it'll blow past 40 by next week but not sure if the recent news will have the price settle at 20 or 30.



So are those Toones coming to Japan or what?


----------



## Avedas

narad said:


> So are those Toones coming to Japan or what?


I try not to yolo things that won't increase the numbers in my account


----------



## narad

Avedas said:


> I try not to yolo things that won't increase the numbers in my account



But a diversified portfolio is one that includes such liquid assets, as well as social assets, like SSO likes.


----------



## nightflameauto

RE: the Musk comments on GME - anybody taking anything he says about the situation seriously needs to temper themselves harshly. Dude's caused runs on Dogecoin so often that they've made him an officer of Dogecoin. And he flat out tells people he just does it for the LOLz because Dogecoin was such a silly concept. He's probably watching this GME shakeout and laughing his pot soaked brain out of his head over it.


----------



## Xaios

Time to admit it: I bought some Doge. Not a lot, just enough to have a little fun. I bought it fully expecting to lose money, because I know essentially fuck-all about investing. I bought at $0.044 CAD. Now it's $0.1023. I feel like the Earth has fallen off its axis.


----------



## TedEH

I've got some bitcoin around somewhere. Maybe $80 worth. Bought it when it was worth half of that. I'm clearly an investing pro now.


----------



## nightflameauto

TedEH said:


> I've got some bitcoin around somewhere. Maybe $80 worth. Bought it when it was worth half of that. I'm clearly an investing pro now.


I made ten bucks between Bitcoin and Ethereum in like a week. Clearly I'm ready to toss some coin at that Lamborghini I'd been eying.


----------



## SpaceDock

This all seems too much like the dot com or mortgage busts when it was seemingly too easy to make money then all the armchair investors start throwing in. Just don’t bet what ya can’t lose!


----------



## jaxadam

SpaceDock said:


> This all seems too much like the dot com or mortgage busts when it was seemingly too easy to make money then all the armchair investors start throwing in. Just don’t bet what ya can’t lose!



I just wish I could make 3 to 5k a day like you do. I mean, taking the average of 4k a day, and losses of 10k a week, that's a net gain of 10k a week, or about half a million a year. I need to get in on your investing strategies!


----------



## nightflameauto

SpaceDock said:


> This all seems too much like the dot com or mortgage busts when it was seemingly too easy to make money then all the armchair investors start throwing in. Just don’t bet what ya can’t lose!


Pretty much all my "investing," over the years I've viewed the same way I've viewed going to the casino with the family. It's fun to toss twenty bucks at the slots on the off chance you hit the jackpot. Just like it's fun to toss twenty at an investment (or shitcoin as the techies call the crypto currencies) on the off chance you can sell when they peak. It's amusing to me to watch the trends, and see the chicken littles running around screaming every time it peaks and falls.

I tried to buy twenty bucks of doge last week but couldn't get the exchange to process the request. Too bad as there was a point where they were up so high over the last few days that $20 initial would have been worth about $6k (with a $5k a day limit on sales I still would have been pretty happy with that). It's dropped again, but doge is one of the funnier ones. Buy when it's low and wait for Elon Musk or Snoop Dogg or somebody to say something silly about it, then sell before it falls again. Just don't be stupid and bet your life savings on it.

The only investment I currently have outside of 401ks and work related investing that's "serious money" was a buy in my dad got me into in a pharma company when they IPOed. He's been an accountant his whole life and involved in several other IPOs that made money, so I figured I'm safe following his lead. Even so I only bought what I wasn't afraid of losing. If they deliver as promised, I'll be able to retire on it in ten years. If they don't, it's been fun watching them climb from nothing in the beginning and thinking I have some stake in it.

To those dudes that play the game day in and day out? More power to ya. I wouldn't have the stomach for it. I'll check trends daily, but even when I've played imaginary games of where things could go I get queasy if I think of an initial buy-in over a grand. I'd rather gamble that grand on a guitar that may appreciate and have something useful in the meantime.


----------



## Xaios

...aaaaand Dogecoin has dropped like a brick in the past couple hours.


----------



## nightflameauto

Xaios said:


> ...aaaaand Dogecoin has dropped like a brick in the past couple hours.


Yup. Over the weekend they had Snoop and Musk trading memes about it and it climbed like absolutely crazy until about Monday morning. Musk plays with Doge the way a cat plays with a a ball of yarn and somehow it almost always pushes the price into the stratosphere for like a day. Then *BAM* back down it goes.


----------



## SpaceDock

I am really wondering when BTC is going to take a crap, I believe it got real pumped by Republicans who thought the dollar was going to crash/ market crash that Fox has been pushing for a while. I think US stocks are set to go even higher on US recovery. Thoughts?


----------



## nightflameauto

SpaceDock said:


> I am really wondering when BTC is going to take a crap, I believe it got real pumped by Republicans who thought the dollar was going to crash/ market crash that Fox has been pushing for a while. I think US stocks are set to go even higher on US recovery. Thoughts?


Tesla just bought into Bitcoin for 1.5 Billion, so I would say the crash is at least a few weeks out. The positive: more demand. The negative: more regulatory scrutiny. The regulatory scrutiny takes time to really have an adverse effect though.

I am enjoying watching my piddly little buy-in grow by a few dollars a day at this point. I honestly figured the second I tossed twenty in it would crash so hard it would essentially disappear. That's my usual buy-in luck. Instead we see a big investment from a tech bro company. That could float it for quite a while.

Or cause speculative selling due to fear. Either/or.


----------



## MrWulf

Bitcoin is going to blow up quite a bit more. It is cooling down from the Tesla announcement. But the balloon will inflate once other corps start following Tesla's footstep, for better or worst. I'm just here to enjoy the ride and get out before it pop. And dogecoin is lol. It is basically a pump and dump scam


----------



## penguin_316

Drew said:


> Sorry man, missed this earlier. Two quick points, my understanding was Melvin was short the stock, not options in the stock, but hypothetically, say they were short calls in GME, and say those were physical delivery and no cash settlement calls, they could have closed easily enough in two other ways, by selling the call, or by purchasing an offsetting long call in GME at the same strike price and expiration date and offsetting them at the exchange level.
> 
> EDIT - and moot point anyway, as both Melvin and Citron have confirmed that they closed their positions earlier that week, Melvin on Tuesday when the stock traded from $80-140, and Citron "at a price of around $90 a share," which would _also_ imply they closed Tuesday, which is pretty much what I've been saying all along.  Wednesday and Thursday weren't a short squeeze or a "gamma squeeze," and if options were the culprit I believe Friday was the expiration day so that's when you would have seen some fireworks, instead of a ~50% decline in the share price.
> 
> Broken record here, but if the goal here was to hurt hedge funds, then right on, but that trade was done before the stock broke $140 a share. Everything else appears to be retail buyers bidding the stock up in a bubble, thinking shorts would still have to cover at some point.
> 
> End Edit
> 
> 
> I'd love to see that chart, frankly. I'm looking at DXY since 1/1/1966, and barring a spike in the early 80s when Volker went to war against double-digit inflation (and the dollar strengthened as short term rates ratcheted higher), DXY has been pretty consistently range-bound between 80 and 120. If you're seeing something different, I'd appreciate it if you could point me to it.



I didn’t say that Melvin had the ITM call options, several in the Reddit army had massive amounts of ITM call options the day of the manipulation down to $100. The app literally said taking physical delivery was not allowed due to volitility or some type of garbage.

I forget their exact verbiage, but the point is people couldn’t get access to shares they legally had access to purchase. If you believe the liquidity of robinhood had anything to do with the manipulation that day, I can’t really remove the cloth over your eyes. Liquidity has nothing to do with restricting trading the second market opens causing a panic, simultaneously locking out Reddit discord, and flooding Reddit with bots causing a blackout of the website for those few hours.

Here let Jim Cramer explain it to you, this footage has been taken down so many times. But cats out of the bag Cramer...actually watch it and listen to the strategies. Sound familiar?
https://m.youtube.com/watch?v=AADRiRqdmZw


Now, In 1971, we left the gold standard and the dollar currently isn’t pegged to anything except the faith of the US government. It has been rapidly declining since, check the charts. Sorry, I assumed you were actually educated in the subject at hand, which is why I picked that timeline. Also, I was driving while doing it...so I could only expand it so far.

Still irrelevant, the dollar is crashing. People with a brain are ditching it as fast as possible for assets. You can buy grossly overinflated stocks with P/E ratios of 1400s, you can buy gold like a boomer, or you can buy Bitcoin.

Time has already shown the clear pick, when you come around you’re going to find you have tons of dollars. Everyone will, because they won’t have any value.


----------



## penguin_316

The current price of Bitcoin may go up and may go down (we’re in the middle of the bull market so I’m going to say up). You need to think about long term when you buy Bitcoin, it’s not a pump and dump. It also isn’t a get rich quick scheme. You need to ask yourself about the future of money, and whether you actually believe the US dollar is a sound base for your future.


----------



## nightflameauto

MrWulf said:


> Bitcoin is going to blow up quite a bit more. It is cooling down from the Tesla announcement. But the balloon will inflate once other corps start following Tesla's footstep, for better or worst. I'm just here to enjoy the ride and get out before it pop. And dogecoin is lol. It is basically a pump and dump scam


doge is a meme joke that celebrities use to bolster their self esteem and, most likely, their pockets. I don't find it hard to imagine Elon tossing a few bucks at it right before he posts a meme, watches it climb for twenty-four hours or so, then sells. And most likely tokes his way through the whole thing laughing his high as fuck ass off the whole way. Snoop and him probably had grand fun comparing strains while pumping it over the weekend.

I know some folks would scream bloody murder about it but I find the whole thing hilarious. Anybody that legit loses a ton of money due to doge is a freakin' idjit, but I'd have no trouble tossing twenty at it when it's tanked just to join in on the fun and wait for Musk's next round of chicanery. I've lost more with less potential several times over the years.


----------



## Xaios

Say what you will about Doge, it's holding up a lot better than GME.


----------



## mbardu

"There were no more shorts" they said.
"The price would never have gone any higher" they said.

https://www.reddit.com/r/wallstreet..._interactive_brokers_ceo_admits_that_without/



> “The brokers would have been obligated by the rules, as they are today to deliver to them *270 million shares* while *only 50 million shares existed*.



So both of the things above were lies and the halts were indeed there to fuck over the longs and save the shorts. Tell me that shit isn't rigged.


----------



## BlackSG91

;>)/


----------



## Demiurge

mbardu said:


> So both of the things above were lies and the halts were indeed there to fuck over the longs and save the shorts. Tell me that shit isn't rigged.



It will be interesting to see what comes out of it. By that I mean whether there will be restrictions on retail investors under the auspices of "consumer protections".


----------



## Steinmetzify

Fuckin back up to $168 AH, wth


----------



## philkilla

The moon is back on the menu.


----------



## SpaceDock

GME, Bitcoin, and Tesla are all being propelled by FOMO and emotion. Stocks are traditionally based on past growth and future projection, but GME being pumped by fanboi’s and not by the companies actually growth potential has no longevity. Bitcoin booming or busting just based on Elon’s latest tweet proves its value is all speculation. Tesla being worth more than Ford or GM while never turning a profit on cars is just FOMO for those wanting it to be the next Apple or Amazon. I have already seen two market crashes in my life, hoping all this nonsense doesn’t drag the rest of it down. Sell when it’s up and don’t hold too long guys!


----------



## fantom

SpaceDock said:


> Tesla being worth more than Ford or GM while never turning a profit on cars is just FOMO for those wanting it to be the next Apple or Amazon



GM and Ford would be bankrupt if they weren't bailed out by the US Government. GM lost $50 billion in 3 years before the government wrote them a $50 billion check, of which it wrote off $16 billion. Tesla is currently $2 billion in debt. So not sure your point here makes any sense.

Tesla is forward thinking. They aren't just selling cars, they are looking to disrupt the entire energy market. GM and Ford are still stuck selling oversized SUVs to Karens and guzzling pickups to middle America. If I had to buy and hold between these, I would pick Tesla and not even second guess the choice. And no, I'm not a Tesla fanboy. It is just considerably smarter to put your money into a company that isn't relying on congress to be successful.


----------



## Shoeless_jose

fantom said:


> GM and Ford would be bankrupt if they weren't bailed out by the US Government. GM lost $50 billion in 3 years before the government wrote them a $50 billion check, of which it wrote off $16 billion. Tesla is currently $2 billion in debt. So not sure your point here makes any sense.
> 
> Tesla is forward thinking. They aren't just selling cars, they are looking to disrupt the entire energy market. GM and Ford are still stuck selling oversized SUVs to Karens and guzzling pickups to middle America. If I had to buy and hold between these, I would pick Tesla and not even second guess the choice. And no, I'm not a Tesla fanboy. It is just considerably smarter to put your money into a company that isn't relying on congress to be successful.



For the record Ford didn't take any bailout money, and while overall buy and hold of Tesla isn't a terrible idea they are only making profit due to sales of regulatory credits. Which seems very dependent on Congress (or state lawmakers) to be successful.

Overall I am pro Tesla as a concept and company but the stock is incredibly over valued.


----------



## fantom

Dineley said:


> For the record Ford didn't take any bailout money, and while overall buy and hold of Tesla isn't a terrible idea they are only making profit due to sales of regulatory credits. Which seems very dependent on Congress (or state lawmakers) to be successful.
> 
> Overall I am pro Tesla as a concept and company but the stock is incredibly over valued.



I agree Tesla depends on selling credits. In 3 years they made $2.5 billion on credits. That is about the same amount GM makes in profit in a year. It isn't sustainable, but do they have a long term plan is the key.

Ford didn't file bankruptcy, but they took about $6 billion Government loan to build fuel efficient cars (haha) that helped it avoid bankruptcy.

I never said I didn't think Tesla is overvalued. I said I'd buy it over GM or Ford without a second thought.


----------



## Forkface

this is the most fun ive had related to the stock market in my few meager years of investing.
also, the amount of reading i've done directly because of this GME nonsense was worth the price of admission. buying gme shares has been the equivalent of paying for a finance class in college or something lmao.


----------



## SpaceDock

Bitcoin on the skid, wonder if this is repeat of 2018.


----------



## bulb

SpaceDock said:


> Bitcoin on the skid, wonder if this is repeat of 2018.


I'm just gonna DCA a bit on the way down as I think BTC has shown that it has promise as a long hold. Same (and perhaps even more so) with ETH, especially with NFT platforms using it as the blockchain.


----------



## nightflameauto

After the big fall from Elon and Gates both trash talking it a week or so ago, Bitcoin seems to have fallen back into its regular pattern of falling over the weekend and rising slowly come Monday. It doesn't appear to be in any form of free-fall, though who knows when Elon takes another hit off the bong and spouts off more nonsense about it what it'll do.

It was slightly troubling to me that the fall it did have was reflected in nearly all other crypto currencies in the same time period. Anybody banking on any non bitcoin crypto being more stable is probably going to be in for a rude awakening if Bitcoin does fall through the floor.


----------



## mbardu

Aaaaaand it's back over 200$


----------



## mbardu

mbardu said:


> Aaaaaand it's back over 200$



250$


----------



## TimSE

Ayyye bois
We still in this. End of the clearing cycle end of March. Been on a discord FULL of nerds dedicated to figuring out the real state behind GME and the info. The SEC released a new ruling last Friday saying the DTCC and clearing houses wont bail the Hedge funds (the shorters) out after theyve dug themselves in, instead of covering.

They didn't cover, they doubled and tripled down. That new ruling is the worst news going, for them. Not surprising to see constant more steady price increases from Monday this week.
Next couple weeks could be NUTS! they could still go mental with ITM Put Options again to bring the price down. Anyway, I ramble. Legit $1k very likely, but anything over 2-3k is very unrealistic. Other institutional owners will sell off before those prices happen. 100% my opinion though. I could be COMPLETELY wrong and this actually does go into $10k+


----------



## SpaceDock

What am I missing here? Stocks are a projection on future earnings of a company. I haven’t gone into a GameStop in 10 years (I think when Diablo 3 came out) and I can’t imagine too many people go either. Steam and Epic rule pc games, just order or download for consoles. How is this business growing or have any place in the future? Seems like Blockbuster fanboys to me, idk?


----------



## Demiurge

^I guess the plan is for the company to pivot to a more online model, but that offers no guarantee of success. GameStop had to deal with not just competition online but also other brick & mortar stores; plus, like you mention, physical media is on its way out, and, hell, if stuff like Stadia ever gains traction, consoles, too. It's a big ask for an underdog in their own territory to step into a tougher one and kick some ass. But, I guess right now it's all about wringing as much money out of every crumb of optimism.


----------



## ElysianGuitars

I've been deep in this debacle since January... First share bought at $334, averaged down to $220ish while the stock was on the way down to $39, then made the now genius move of doubling down at $43 per share a day before this thing shot back up, my average buy was $134 this morning.

And this morning, the stock hit $300 just long enough for my limit sell of 10 shares to go through and get my initial investment back. Now I still have 12 shares that I can let ride however high the stock goes and however high I feel comfortable with.


----------



## mbardu

SpaceDock said:


> What am I missing here? Stocks are a projection on future earnings of a company. I haven’t gone into a GameStop in 10 years (I think when Diablo 3 came out) and I can’t imagine too many people go either. Steam and Epic rule pc games, just order or download for consoles. How is this business growing or have any place in the future? Seems like Blockbuster fanboys to me, idk?





Demiurge said:


> ^I guess the plan is for the company to pivot to a more online model, but that offers no guarantee of success. GameStop had to deal with not just competition online but also other brick & mortar stores; plus, like you mention, physical media is on its way out, and, hell, if stuff like Stadia ever gains traction, consoles, too. It's a big ask for an underdog in their own territory to step into a tougher one and kick some ass. But, I guess right now it's all about wringing as much money out of every crumb of optimism.



Don't try to look for a reason in fundamentals. This is entirely stock price driven, and the reason for this whole thing was people aggressively shorting the company, precisely because of the arguments that you're giving - that it was a failing business model. That wasn't a secret to anyone, and it still isn't. The price at this point has nothing to do with earnings or growth.


----------



## mbardu

mbardu said:


> 250$



330$


----------



## philkilla

Paper hands here. I'd short if I had the liquidity to match the volatility.


----------



## Xaios

So yeah, Dogecoin went insane today. I sold enough at the peak to get back my initial investment, so anything now is gravy. Specifically, it broke 10 cents USD 2 days ago. Today, it broke 25 cents USD.

I am suspicious that this is likely just a big pump and dump, but hey, I'm at least guaranteed not to lose anymore, and the value is more than 600% what it was when I bought.


----------



## SpaceDock

I think it’s insane that Elon Musk is behind pumping Bitcoin and now Doge. If something really just needs the backing of someone like him to send it “to the moon” what happens when his interest wains? I just can’t image this still being a thing in five years. Best of luck to those who chose the right hype when it was low.


----------



## spudmunkey

SpaceDock said:


> I just can’t image this still being a thing in five years.



Believe it or not, it's already been around for 8 years.


----------



## Xaios

I changed my mind. Got out. What can I say, I multiplied the money I put in 7 times with a meme currency. At the end of the day, I won no matter what happens now.


----------



## nightflameauto

Every time I try tossing money at dogecoin it ends up being impossible to get money into the exchange. Ah well. I'll sail on my etherium for now.


----------



## possumkiller




----------



## fantom

SpaceDock said:


> What am I missing here? Stocks are a projection on future earnings of a company. I haven’t gone into a GameStop in 10 years (I think when Diablo 3 came out) and I can’t imagine too many people go either. Steam and Epic rule pc games, just order or download for consoles. How is this business growing or have any place in the future? Seems like Blockbuster fanboys to me, idk?


The stock price has nothing to do with the business. It's people trying to game automated systems.

That being said, my understanding is that GameStop is still relevant for used game market. Many people buy or trade used games. It's pretty much Blockbuster. People are willing to lose $15 to play a game one time and sell it back or trade it in. It Is far cheaper than $60 with no return policy like Steam and Epic force on users. Thank God for Summer Sales...


----------



## TedEH

fantom said:


> GameStop is still relevant [...] It's pretty much Blockbuster


You mean that company that died because it wasn't relevant anymore?


----------



## fantom

TedEH said:


> You mean that company that died because it wasn't relevant anymore?


Touche


----------



## Jonathan20022

fantom said:


> The stock price has nothing to do with the business. It's people trying to game automated systems.
> 
> That being said, my understanding is that GameStop is still relevant for used game market. Many people buy or trade used games. It's pretty much Blockbuster. People are willing to lose $15 to play a game one time and sell it back or trade it in. It Is far cheaper than $60 with no return policy like Steam and Epic force on users. Thank God for Summer Sales...



I mean unless you've completely abused the system, Steam should have a two hour/two week window where you can request a refund no questions asked.

It was hilarious seeing such nostalgia for Gamestop when this a trending topic. They nickel and dimed us and out of convenience we just let them take $300 in games for a new title and a bogo used purchase, *on a good day*. 

There's not really much excuse anymore for buying a game you dislike, there's countless people playing the games on livestream services, youtube reviews, enthusiast discussion forums. If you're "losing" money on a game like Cyberpunk because you somehow missed the gauntlet of negative press and gameplay videos that's on you, not really on any specific system.

I don't know if the Epic Store has a return policy though mind you, I just use them for the freebie alerts I get.


----------



## Drew

Jonathan20022 said:


> It was hilarious seeing such nostalgia for Gamestop when this a trending topic. They nickel and dimed us and out of convenience we just let them take $300 in games for a new title and a bogo used purchase, *on a good day*.


That was honestly my favorite part of watching this whole saga unfold, is suddenly after a decade of GameStop being the butt of memes for ripping off gamers, they were heroes taking part in a heroic fight against hedge funds trying to drive them out of existence by shorting their stock (which is nonsensical, but here we are. )

Evidently all the memers had never set foot in a GameStop, which as a shareholder should be cause for concern.


----------



## TimSE

Drew said:


> That was honestly my favorite part of watching this whole saga unfold, is suddenly after a decade of GameStop being the butt of memes for ripping off gamers, they were heroes taking part in a heroic fight against hedge funds trying to drive them out of existence by shorting their stock (which is nonsensical, but here we are. )
> 
> Evidently all the memers had never set foot in a GameStop, which as a shareholder should be cause for concern.



I'm still hanging on to my infinity shares. To keep *just in case if really does shit the bed*

I wonder how many people will definitely shop at Gamestop now...


----------



## TedEH

I wonder how retro shops generally fare compared to Gamestop. I can't remember the last time I bought something from a box store type new-games store, your GameStop/EBGames etc. Maybe 2 years ago? Maybe longer? I go into some smaller retro shops every once in a while though - as recently as this week. Makes me think stores like GameStop might fare better to pivot towards that same audience, if they haven't already.


----------



## mbardu

$GME back to within a hair of 300$ today.
$AMC higher market cap than $GME when it touched 70$.


----------



## TimSE

Watching both! These fuckos about to buy me ANOTHER guitar


----------

