Gamestop

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ask is now 257.

A lot of people made a lot of money. At some point it will end, but no-one knows where or when

At this point, people are buying a chance to stick it to the hedgefunds, not a chance to make money on the stock.

[Anonymous]

Could some explain in simple terms what is happening here? I've read several articles and at some point in each one I just end up lost. I just invest in mutual funds, for the long term. I'm not interested in trying to get in on this because I don't know enough to have a chance at making money. I'm just curious what is going on. I understand buying options is buying the right (but not the obligation) to buy stock at a certain price or on a certain date. But from there I get lost. Thank you to any kind soul willing to educate me a bit.

[Anonymous]

Anonymous wrote:Could some explain in simple terms what is happening here? I've read several articles and at some point in each one I just end up lost. I just invest in mutual funds, for the long term. I'm not interested in trying to get in on this because I don't know enough to have a chance at making money. I'm just curious what is going on. I understand buying options is buying the right (but not the obligation) to buy stock at a certain price or on a certain date. But from there I get lost. Thank you to any kind soul willing to educate me a bit.

from earlier in the thread:

Anonymous wrote:

Anonymous wrote:Does anyone actually know what to do with GME tomorrow? Will this thing hit >300?

No one knows where the top is...this is history making/unprecedented. GME is caught in a positive feedback loop. Dumb shorts got insanely greedy - they kept shorting a stock over 140% when it was $3 (seriously, how can a $3 stock go down?). They wanted to see GME go bankrupt and for many people to lose jobs. Shorts shorted while options buyers piled on. This is also a stock, btw, with a very small number of shares available for trading. It was complete powder keg ready to explode and all it took was the positive news that GME was overhauling its management to set it off.

All of the big market makers who are selling call options are now constantly having to buy shares of GME to reduce their risk, and because options keep going in the money. This is called a gamma squeeze. The latest options chains for GME are now ALL in the money, thus if the stock stays high, the sellers of calls will face massive risks that they'll be assigned and will have to deliver shares when the options expire this friday. It's going to be a huge gamma squeeze again.

On top of this, short interest is still massive. Shorts cannot get out of their positions easily because there are just very few shares available (low float). Shorts are losing their asses because they're paying something like 45% interest or something, so there's tremendous demand from shorts for shares to cover their positions, which is driving up the price for a lowly available stock.

It's basically a once in a century scenarios where there's a perfect alignment of the stars at the same time. $500 per share may even be bearish at this rate. The gamma squeeze is going to be massive tomorrow and on Friday if the stock price stays elevated.

So many in the media and those on Wall Street are crying foul. Too bad. They were greedy hogs who tried to short a $3 stock over 140% that also had a low float. They got caught with their pants down and are now paying the price. They knew well ahead of time that the risk was always infinite losses. That's a decision they freely made and they're paying dearly. Hogs get slaughtered. The media doesn't seem to complain when rich elitists and Wall Street wins, yet all of the sudden it is problem when the small guy figures out the game and starts winning accord

when people warn that there is no theoretical limit to exposure for naked shorts, this is what they are talking about

[Anonymous]

I bought amc yesterday at 4 and have had expr since it was 1.40. Come at me bros

[Anonymous]

Anonymous wrote:Could some explain in simple terms what is happening here? I've read several articles and at some point in each one I just end up lost. I just invest in mutual funds, for the long term. I'm not interested in trying to get in on this because I don't know enough to have a chance at making money. I'm just curious what is going on. I understand buying options is buying the right (but not the obligation) to buy stock at a certain price or on a certain date. But from there I get lost. Thank you to any kind soul willing to educate me a bit.

Gamestop has been going up slowly over the past year.. A lot of people bought the stock and call options (right to buy) at very low prices hoping for a win at some point. Along the way, some hedge funds started betting against the stock when it was <$10 to about $20. They do that by selling the stock without owning them (called shorting). In order to do this, their brokerages will have to borrow those shares from another account (someone who owns it for the long term) and loan it to the short sellers. The Short sellers pay interest. How do they make money? By buying the stock at a lower price and "returning" it to the brokerage.

However, Gamestop announced recently that new members were being added to the board of directors (from a company called Chewy) and people found out that some hedge funds were shorting the stock. The news started driving the stock up thanks to some traders on Reddit. The short interest is also in excess of 100%. Stock is now over $300! The Short Sellers now have to pay $300 per share to buy it back and return it to the brokerage or continue paying interest. If you shorted at $20, you take a $280 loss. As a result, there's huge buying pressure pushing the stock up.

Short sellers (Hedge funds and their enablers. i.e. mainstream financial media) are pissed and accusing the Reddit traders of market manipulation (which is what the hedge funds do all the time anyways..)..

[Anonymous]

NOK to the moon

[Anonymous]

BB to the moon

[Anonymous]

Congress has a chance to correct laws years ago but they’re so corrupt themselves they don’t do anything. Eat the rich.

[Anonymous]

I found this to be a helpful explanation. I see how the Reddit people are manipulating the market, but it seems clear they are doing it to people who were...manipulating the market. These investors aren’t just betting that a business will fail, they are engaging in behavior that makes it more likely to fail. Eff them.

[Anonymous]

https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html

Parts I thought were most interesting:
Melvin Capital closed out its short position in GameStop on Tuesday afternoon after taking a huge loss, the hedge fund’s manager told CNBC’s Andrew Ross Sorkin.

GameStop, hedge funds’ most-hated stock, was targeted by an army of retail investors who marshaled forces against short sellers in online chat rooms. In the Reddit forum “wallstreetbets” with more than 2 million subscribers, rookie investors encouraged each other to pile into GameStop’s shares and call options, creating massive short squeezes in the stock.

GameStop was the single most traded name in the U.S. stock market on Tuesday, topping Tesla and Apple, even though they are 81 and 233 times larger in market cap terms, according to Deutsche Bank strategist Jim Reid.

[Anonymous]

Anonymous wrote:I found this to be a helpful explanation. I see how the Reddit people are manipulating the market, but it seems clear they are doing it to people who were...manipulating the market. These investors aren’t just betting that a business will fail, they are engaging in behavior that makes it more likely to fail. Eff them.

Shorting a stock is not manipulating the market.

[Anonymous]

Shorting a stock generally is not manipulation but there was more than that happening here. Something like 140% of gme was shorted!

[Anonymous]

I think it is going to be hard to classify what the Reddit posters are doing as market manipulation because they are simply announcing an intention to purchase the stock rather than making false claims in order to pump up the price of the stock.

[Anonymous]

Anonymous wrote:I think it is going to be hard to classify what the Reddit posters are doing as market manipulation because they are simply announcing an intention to purchase the stock rather than making false claims in order to pump up the price of the stock.

Yup, it's not, and the handwringing is pathetic given what short sellers do all the time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think it is going to be hard to classify what the Reddit posters are doing as market manipulation because they are simply announcing an intention to purchase the stock rather than making false claims in order to pump up the price of the stock.

Yup, it's not, and the handwringing is pathetic given what short sellers do all the time.

I mean, the stock started at 3 bucks a share. I'm not too optimistic about Gamestop's future but it's almost certainly got a book value more than $3 a share and it's not out of business yet. It may last a lot longer than most expect because some major Internet providers (Time Warner) have caps on usage so that would make downloading of software less convenient.