Gamestop, Wall Street and Reddit.

[Vanz_007]

[koralis]

hmm, what is the break down approximately, what about 1 week or 1 month or 1 year... is there a link for this break down or is it case by case?

I thought for short selling if you promise to buy it back at a later date you pay that amount and make or lose the amount per what you paid, so how does it become less profitable over time?

Just in principle...


The owner of the stock (for selling a covered call, for example) decides how much it's worth to them to sell the buyer of the option the right to buy/sell it at a later time at certain trigger values. Different options have different scenarios, but basically it's still a deal between two people.


The option itself has value which is a factor of the triggers and the dates. The less likely it is for the option to make money, the cheaper it is because who wants to buy an option that will not generate income? A quick expiration date means that the option is more likely to expire worthless, so those options are sold cheaper than ones with longer horizons.

If you bought a call option, and never exercised the option, you lost the cost of the option but never bought any stock. The guy that sold you that option made the cost of the option, but kept his stock.

I was thinking about selling covered call options back in the day when I had a fair amount of low-value AMD stock as a way to generate revenue without selling the stock itself. Never actually did it, but did the research. I figured either I'd generate a little money "for free" or I'd sell the stock for a price I was ok with... I'm sacrificing the possibility that the stock doubles in value in exchange for the guaranteed income. The person that buys that call is sacrificing a little money for the potential to buy at the strike price instead of what they hope is a much higher price.


The stuff the hedge fund is into is orders of magnitudes riskier. Note I haven't been in the weeds about the specifics of all this, so I might have things wrong. If so, sorry. I believe that they're selling the right to buy stock from them if it stays above a certain value at a certain date, FOR STOCK THEY DO NOT OWN. So, if someone redeems that option, they have to actually buy the stock at current value (call it $300) so that someone else can buy that stock from them at $20, or whatever the strike price is. You can see how they could lose a fortune in that scenario.. the higher the stock goes the more they lose.

If it's not exactly that, it's something similar in principle.

[Vanz_007]

so it sounds like hedge funds are going bankrupt, what happens if the stock keeps going up and no one can pay back the shorts?

[koralis]

so it sounds like hedge funds are going bankrupt, what happens if the stock keeps going up and no one can pay back the shorts?

Apparently right now a lot of the shorters are selling off long positions in other companies to get out of their previous short positions and/or stake out new short positions to capitalize on the inevitable fall.



https://arstechnica.com/tech-policy/...ary-investors/

There's just one problem: the billions of dollars in new "wealth" people have supposedly gained is mostly in the form of inflated GameStop stock. Before they can actually use that wealth, they need to convert it to cash. And if a lot of people start selling their shares, the stock will crash. Most of that GameStop "wealth" will evaporate, with many shareholders getting a fraction of the value they expected.

Meanwhile, if GameStop's stock price starts to fall, short sellers will start to make money. Any short sellers who maintained their short positions through the bubble will make back most of what they lost.

Sooner or later, GameStop's stock is going to return to normal levels. And when it does, we are likely to find that little wealth was actually transferred from wealthy hedge fund investors to the general public. Short losses as the stock appreciated will be largely balanced out by short gains as the stock falls. The gains of GameStop shareholders as the stock appreciates will be balanced by losses as the stock declines.

[Jay20016]

so it sounds like hedge funds are going bankrupt, what happens if the stock keeps going up and no one can pay back the shorts?

Then those open shorts fall back to the broker who issued them. If the broker cannot do them, then they go back to the banks. If the banks can't underwrite then, well... maybe they shouldn't have over leveraged themselves and ought to pick themselves up by their bootstraps.

I honestly don't want to see the market collapse, but if this is all it took, why are we talking about investigating a ****ing message board? Isn't the issue that the message board could be used to expose the absolute tom ****ery that is the stock market?

As I said earlier, they're sad that they're looking at losing money, but those who don't have "real" skin in the game (these other funds collapsing will affect other stocks, we're already seeing that as they liquidate their other positions) are more pissed that the curtain will have been pulled back to all paying attention and the Wall St. guys are no more than two bit Wizards of Oz.

[Jay20016]

And another thing. Each of these sell offs are not convincing many people to move. The volume is just not that high to seemingly be effective.

They've started the day by limiting how many shares you were allowed to purchase. As they rolled out the first laddering, they shrunk it, another ladder, another shrink, to the point that they've seemingly unleashed what looks to be their big gun, and now if you're using some of the more popular retail trading platforms you can hold either 1 or 2 shares.

They're still manipulating the market via access. Oh, we can "buy", but they kettled us into a position where they know that some of us still have funds available and could buy the dips.... and yet, we're not allowed.

[Higgy10]

I have little understanding of the job market but Amazon did add more jobs in 2020 than anyone else. Whether they were high paying or not but they did add jobs. I think if you survived 2020 with a job intact then you had a good year.

for a guy who demands a 6 figure salary and stock options, you have little understanding of basis economics. McJobs are a net drain on the economy, they add nothing of value other than to make rich ppl even richer. In plain english that means they take more of government aid then the taxes they pay.

[Higgy10]

Well, what do you want, the good paying job that will mean you pay more than $5 for a toaster at Wal-Mart or Amazon, or do you want a $5 toaster?

thats the wrong way of looking at it Jay. I would rather pay a few extra dollars for something if that meant a well paying job for someone that could turn around and actually hire me and my employees to fix up there house. A walmart or amazon worker cant afford to hire me(or even buy a house) Same goes for autos, i would be ok paying an extra 5-10k every 4 years on my truck if it meant a local unionized worker had a well paying job. Again all it takes is one or 2 of those people to paint there house and ive broken even. Someone from mexico or mobil or dearborn aint gonna hire me and my ppl.

[Jay20016]

thats the wrong way of looking at it Jay. I would rather pay a few extra dollars for something if that meant a well paying job for someone that could turn around and actually hire me and my employees to fix up there house. A walmart or amazon worker cant afford to hire me(or even buy a house) Same goes for autos, i would be ok paying an extra 5-10k every 4 years on my truck if it meant a local unionized worker had a well paying job. Again all it takes is one or 2 of those people to paint there house and ive broken even. Someone from mexico or mobil or dearborn aint gonna hire me and my ppl.

I'm completely in agreement, my point is more that we as a society value faster, cheaper, better while simultaneously saying that we need to buy American. They're somewhat mutually exclusive because if we're to buy American, it will cost more than what Wal-Mart or Amazon junk is rebranded. It will take a shift in our collective minds, something that some might not be able to shake...

[Higgy10]

I'm completely in agreement, my point is more that we as a society value faster, cheaper, better while simultaneously saying that we need to buy American. They're somewhat mutually exclusive because if we're to buy American, it will cost more than what Wal-Mart or Amazon junk is rebranded. It will take a shift in our collective minds, something that some might not be able to shake...

even that isnt necessarily true jay. I remember the days(you should too i think) When our car/truck was either made in canada or the states(both really) I bet if we went back and compared pre and post with the dirt cheap mexican labour, price isnt all that much better now. Both of our nations have lost 1m+ good paying jobs, while wages have stagnated but the big3's profits have soared. Not to mention you and I had to bail them out in 09

[Vanz_007]

[dodger]

https://www.polygon.com/movies/2021/...ebt-conversion

‘Meme stock’ rally rescues AMC theaters from $600M debt

That’s because, on Wednesday, a private equity firm named Silver Lake — and private equity firms are popularly considered the “bad guys” in this snobs-versus-slobs drama — elected to convert the corporate bonds it held into AMC Entertainment Holdings stock. Although the theater chain’s stock price has tumbled and soared since the move, the debt relief is permanent.

Well, seems like some good has come of this.

[KAC]

CNBC was saying that GameStop can get rid of 2 billion debt by just selling 10% of their stock. Not sure if they already did it. If not then they are truly stupid.

[Sundance Kid V2]

CNBC was saying that GameStop can get rid of 2 billion debt by just selling 10% of their stock. Not sure if they already did it. If not then they are truly stupid.

[koralis]

CNBC was saying that GameStop can get rid of 2 billion debt by just selling 10% of their stock. Not sure if they already did it. If not then they are truly stupid.

If they do that, share price is going to collapse suddenly. Be careful out there.

[AllexxisF1]

I sold my stock of Nokia yesterday and moved it all over to AMC.

[MNB4800]

So uhhh, HOLDING and uhhh DIAMOND HANDS!


GME, AMC and BB. I think I know what I am doing but I aint so sure...


Power to the people!

[KAC]

I lost 1 G on Tesla and Nvidia yesterday. So people with GME can suck it.

[bill dennison]

[MyTMouse]

I wish I was a lot more familiar with this sort of stuff...I could have fairly easily put in $30-40k and let it sit for a month or two if necessary

[0091/2]

Start asking questions
Do people here w/gme expect a huge profit? Whoever sells at right time will make a profit?

[Trunks0]

I wish I was a lot more familiar with this sort of stuff...I could have fairly easily put in $30-40k and let it sit for a month or two if necessary

In Canada, You setup an account with something like QuestTrade or WealthSimple. You then transfer money to your account and buy whatever you like.

Personally I don't have allot of money to throw at this. But I put $300cdn into AMC when this started just to stick it to the hedge funds. But I've done that knowing I'm likely to loose on that investment of $300 bux. Not because I intend to make money on it.

[0091/2]

In Canada, You setup an account with something like QuestTrade or WealthSimple. You then transfer money to your account and buy whatever you like.

Personally I don't have allot of money to throw at this. But I put $300cdn into AMC when this started just to stick it to the hedge funds. But I've done that knowing I'm likely to loose on that investment of $300 bux. Not because I intend to make money on it.

Why AMC instead of the GME? The knife goes on in deeper at hedge funds, no?

[Trunks0]

fair, but I think GME was too expensive at the time I bought if I remember right.

[bob saget]

Start asking questions
Do people here w/gme expect a huge profit? Whoever sells at right time will make a profit?

as i understand all the "HOLD" and "diamond hands" memes basically mean that at some point, the hedge funds will have to start buying stock at this incredible price, which will make the price explode.

the reddit nerds basically need to outlast the hedge funds, and not panic sell.

[bob saget]

Start asking questions
Do people here w/gme expect a huge profit? Whoever sells at right time will make a profit?

yes but then when everyone starts mass selling, obviously the price will collapse.

[KAC]

How much you made on this bob?

[Jay20016]

How much you made on this bob?

Not as much as someone with diamond hands...



It will be interesting to see what transpires on Monday or whether the markets even allow the squeeze to take place. Considering the wholesale limits on buying, or limiting stock purchases only helped the hedge funds with the expiration of calls some had, I don't put it past the system to save itself with some more shady ****.

[bill dennison]

AMD Caught In WallStreetBets Drama As Shady Robinhood Dares To Limit Trading

But one company that was caught up in this short selling/WallStreetBets counterattack has been AMD. AMD is a company that is seemingly unrelated to the whole GME drama (other than it making the CPUs and GPUs that go into game consoles), but it too was placed on Robinhood's restricted stock list.

https://hothardware.com/news/amd-rob...wallstreetbets



everyone need to stop using Robinhood and put them out of business

[Nunz]

When I tried to use Robinhood over a year ago, I couldn't even find AMD or NVIDIA; it's why I lasted 5 minutes on it.

[Shapeshifter]

[yt]XaKgRe6GuUQ[/yt]

[Jay20016]

Lots of stock have experienced downturn as the funds liquidate other holdings to cover their GameStop blunder. If this doesn't start the ball rolling on why a fund who provides no other value than betting a stock will rise or fall, and then using your vast means to ensure that it happens, shouldn't exist, then I don't know what will.

I get the speculation going into GameStop now, but shouldn't we want capital investment to be about what a company or business does, instead of a group of people circling like vultures who they can pick of for their meal?

[somewon]

They get interest paid out on the loan. So when the stock goes up up up the longer the borrower waits to buy it back the more interest is paid to the original holder. They eventually have to give it back to the borrower with the interest on top the longer they hold on too it.

Got it, thanks for the knowledge share.

[bill dennison]

craps in Vegas is a lot more fun and has better scenery

[bob saget]

How much you made on this bob?

none. i do have some money to throw around though...

i guess we'll see what monday holds. it really is a casino at this point. i might drop $50 on roulette but even that is pushing it. as long as you don't gamble with more than you can afford to lose you're good.

[t3hl33td4rg0n]

💎🙌🚀🚀🚀🚀🚀🌑

I threw some $$$ at GME because **** short sellers trying to sabotage companies. Also threw some $$$ at AMC, simply because I think they can bounce back if they survive the pandemic, so possibly a good LT investment.

[bob saget]

god the memes alone are so brilliant

[bob saget]

💎🙌🚀🚀🚀🚀🚀🌑

I threw some $$$ at GME because **** short sellers trying to sabotage companies. Also threw some $$$ at AMC, simply because I think they can bounce back if they survive the pandemic, so possibly a good LT investment.

APES TOGETHER STRONG

[MaxSt]

Who's pushing silver? Same mob? Crazy stuff...

[AllexxisF1]

WSB is against silver. They think it's a ploy by Hedge funds to get Reddit to get out of GME.

They're not buying it. They're holding.

Meanwhile my AMC is up.