It went up in premarket so I don't think it's retail hype.
I was reading that the gamma squeeze goes both ways. So on the downside all the MMs unwind all their hedging and the stock drops like a rock to the bottom as this causes a positive feedback loop regardless of how many diamond hands people have.
Kind of scary if you think options activity has lead to the speculative bubble in the market right now.
I wonder what the exit looks like though. Sounds like a bunch of people will think they're millionaires until they all try to sell at once and the price craters because once a few stock start being sold, the buyers of those can cover their shorts, and theyll be resold, etc
Theoretically just one stock could be used to cover every short and be resold over and over because the other side of the short doesnt want to hold the stock, no?
So am I thinking correctly that options are inspired by interests rate swaps which were designed to help firms manage their rate risk by limiting downside impact if their bets on rates were wrong (and buying these swaps actually lower their potential income if their bets are right)
And like rate swaps, options are a way to get in the market with low/no principle/capital to tie up...
So presumably options are a way for firms to hedge their built up positions, and because you don’t need existing funds to get in, people begin building up options positions on top of options positions to hedge for their previous options positions...
And then just like with rate swaps, options then begin trading as their own assets and market, creating another order of derivatives....so on....
And this market is several times larger than the GDP of the US....
And I believe unregulated outside of the licensing that brokers need to be able to sell them....
Meanwhile there’s firms in the middle getting rich off the vig....
It's all commission free
They are getting rich by selling (buying) order flows. The big dicks get to see the bids roll in before it hits market and they skim off the top.
Also, a lot of those bets are very bad. The NIO bet I mentioned is a good example. When it was at $57 a share people were spending 12.40 for the right to buy the share at $100 in one year. Let that sink in. You could have just bought the share with that money if you expect it to double. Or buy the shares and sell someone the right to buy it from you for 12.40 as soon as you get it and reinvest that 12.40 into anything else.
So am I thinking correctly that options are inspired by interests rate swaps which were designed to help firms manage their rate risk by limiting downside impact if their bets on rates were wrong (and buying these swaps actually lower their potential income if their bets are right)
And like rate swaps, options are a way to get in the market with low/no principle/capital to tie up...
So presumably options are a way for firms to hedge their built up positions, and because you don’t need existing funds to get in, people begin building up options positions on top of options positions to hedge for their previous options positions...
And then just like with rate swaps, options then begin trading as their own assets and market, creating another order of derivatives....so on....
And this market is several times larger than the GDP of the US....
And I believe unregulated outside of the licensing that brokers need to be able to sell them....
Options (and forwards) are thousands of years old. As old as "I expect a bumper harvest this Fall, let me lock in prices now."
I wanted to buy in Friday night and couldn't get the funds in place soon enough. I WOULD be kicking myself.... but I'm not going to get super hot and bothered over gambling.
I wanted to buy in Friday night and couldn't get the funds in place soon enough. I WOULD be kicking myself.... but I'm not going to get super hot and bothered over gambling.
Yeah, same. The problem here is you have no idea when it's going to crash and I'm not sophisticated or even knowledgeable enough to hazard a guess and risk some real money on it.
I can't see how anything illegal is going on though. No one is being tricked into buying a stock or lied to, and buying shares to cause a short squeeze is also legal.
It basically amounts to "Hey let's all do this and we get rich together!. As long as we work together and don't sell we get rich.' And then that gets repeated by everyone jumping in.
In a way it's actually wholesome.
Of course, I bet against them...
Yeah, it's basically the same as any random talking head on one of the finance channels talking their book. Except it's a bunch of randos instead of Very Serious Finance People, and it seems to be working. Both of which might get the SEC to pay attention.
Following a talking head and actually communicating en masse.
This is a really weird point in financial/stock market history.
Yeah this is like regretting I didn't buy the mega millions cause someone won it last week. Whatever, a bunch of people made a bunch of money while proving the stock market is basically bullshit.
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ButtersA glass of some milksRegistered Userregular
on the other, fuck goldman sachs this is a revolution.
Is it though? Is a handful of internet trolls making a quick buck by manipulating a small-time stock really going to put a dent into income inequality?
Yeah this is like regretting I didn't buy the mega millions cause someone won it last week. Whatever, a bunch of people made a bunch of money while proving the stock market is basically bullshit.
And the day isn't over yet, so while I'm sure some people have cashed out and realized their gains a lot of people are still letting it ride and going to be left empty handed.
Hindsight is 20/20. For every bet that would have paid off, there's another one where you would have lost your shirt and even if you get in / out at the right time on one doesn't mean it's anything but luck.
Edit - or even worse, the people trying to chase the trend who are just going to pump it up to get grifted.
zagdrob on
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firewaterwordSatchitanandaPais Vasco to San FranciscoRegistered Userregular
on the other, fuck goldman sachs this is a revolution.
Is it though? Is a handful of internet trolls making a quick buck by manipulating a small-time stock really going to put a dent into income inequality?
No of course not, but it's nice to dream sometimes.
on the other, fuck goldman sachs this is a revolution.
No it isn't. A revolution will hopefully come from a new paradigm in regulatory oversight with a new SEC, CFPB, and Congressional hearing chairs. This is just some day traders possibly getting rich.
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SummaryJudgmentGrab the hottest iron you can find, stride in the Tower’s front doorRegistered Userregular
edited January 2021
I honestly feel like this one is different because the buying isn't predicated on Gamestop's enterprise value
it's meta trading after realizing that shorts asked for 100 feet of rope to be sold to them so they could hang themselves with
Moreover, I don't think it's going to happen again soon, which goes to FOMO, because the big banks do not want to be in the position of holding the bag for an annihilated short
SummaryJudgment on
Some days Blue wonders why anyone ever bothered making numbers so small; other days she supposes even infinity needs to start somewhere.
I thought they'd keep it up until this friday to completely bury the end of month options. Hell at this point I'm wondering if the big guys pumped it to get all the retail to cash out before the end of the week.
I thought they'd keep it up until this friday to completely bury the end of month options. Hell at this point I'm wondering if the big guys pumped it to get all the retail to cash out before the end of the week.
I mean if you bought in Friday you've already doubled your money right? Selling now was the safe play. I'd have jumped out about an hour ago.
So like what does this do to game stop as a company? Does all this movement of their stock mean anything to them at an operational level? Does basically nothing change for them? Is this literally just rich people trading money around in a game that uses gamestop as a marker on a board?
So like what does this do to game stop as a company? Does all this movement of their stock mean anything to them at an operational level? Does basically nothing change for them? Is this literally just rich people trading money around in a game that uses gamestop as a marker on a board?
The last option. Stock prices have no direct impact on a company really. Or any actual relation to the company's value either, as this has demonstrated.
Yeah this is like regretting I didn't buy the mega millions cause someone won it last week. Whatever, a bunch of people made a bunch of money while proving the stock market is basically bullshit.
And the day isn't over yet, so while I'm sure some people have cashed out and realized their gains a lot of people are still letting it ride and going to be left empty handed.
Hindsight is 20/20. For every bet that would have paid off, there's another one where you would have lost your shirt and even if you get in / out at the right time on one doesn't mean it's anything but luck.
Edit - or even worse, the people trying to chase the trend who are just going to pump it up to get grifted.
Right, I mean I literally got an ad today that if I had bought 1k of marvel/netflix/amazon whenever this "expert" claimed I'd have 170k today.
I could have also sat on wework or theranos or whatever hot stock that cratered and lost it all. But that doesn't make for a good ad.
It's the same gambling, if faster, you'll only hear the winners brag after the fact, and nothing from the people who get hosed.
So like what does this do to game stop as a company? Does all this movement of their stock mean anything to them at an operational level? Does basically nothing change for them? Is this literally just rich people trading money around in a game that uses gamestop as a marker on a board?
The last option. Stock prices have no direct impact on a company really. Or any actual relation to the company's value either, as this has demonstrated.
It can severely change compensation amounts for any employees with stock options or stock grants. It can allow a company to raise capital cheaply if they're overinflated (see Tesla issuing more stock at peaks to take advantage). For Gamestop, this has likely wildly impacted executive comp, as that's mostly stock and some bonuses are stock performance based.
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HedgethornAssociate Professor of Historical Hobby HorsesIn the Lions' DenRegistered Userregular
I don't know how long it takes to issue new shares of stock, but if I were Gamestop's board of directors, I'd be working round the clock to try to issue new shares as soon as possible to raise a bunch of operating capital. That's one of the levers that's supposed to keep stock price broadly tied to fundamentals; if Gamestop's stock price is 10 times what it should be, that's a prime opportunity for the company to tap that equity.
I wonder what the exit looks like though. Sounds like a bunch of people will think they're millionaires until they all mom try to sell at once and the price craters because once a few stock start being sold, the buyers of those can cover their shorts, and theyll be resold, etc
Theoretically just one stock could be used to cover every short and be resold over and over because the other side of the short doesnt want to hold the stock, no?
The buyer of a short has to give it back to the person who was holding it, who can sell it to another shorter sure... but that is not good for the person shorting until the price is below their strike price
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I was reading that the gamma squeeze goes both ways. So on the downside all the MMs unwind all their hedging and the stock drops like a rock to the bottom as this causes a positive feedback loop regardless of how many diamond hands people have.
Kind of scary if you think options activity has lead to the speculative bubble in the market right now.
Theoretically just one stock could be used to cover every short and be resold over and over because the other side of the short doesnt want to hold the stock, no?
Nah. This just looks like gambling. Crypto stills wins by trying it's best to be a noticeable contributor to climate change.
And like rate swaps, options are a way to get in the market with low/no principle/capital to tie up...
So presumably options are a way for firms to hedge their built up positions, and because you don’t need existing funds to get in, people begin building up options positions on top of options positions to hedge for their previous options positions...
And then just like with rate swaps, options then begin trading as their own assets and market, creating another order of derivatives....so on....
And this market is several times larger than the GDP of the US....
And I believe unregulated outside of the licensing that brokers need to be able to sell them....
It's all commission free
They are getting rich by selling (buying) order flows. The big dicks get to see the bids roll in before it hits market and they skim off the top.
Also, a lot of those bets are very bad. The NIO bet I mentioned is a good example. When it was at $57 a share people were spending 12.40 for the right to buy the share at $100 in one year. Let that sink in. You could have just bought the share with that money if you expect it to double. Or buy the shares and sell someone the right to buy it from you for 12.40 as soon as you get it and reinvest that 12.40 into anything else.
But people don't care or can't do basic math.
Options (and forwards) are thousands of years old. As old as "I expect a bumper harvest this Fall, let me lock in prices now."
Sir, this is a casino.
It's 2008, you are Steve Baum from the big short, you just found out your stripper owns 5 houses. GL to all.
A lot of people put in asks to sell at 420.69, so it might top at that point.
Yeah, same. The problem here is you have no idea when it's going to crash and I'm not sophisticated or even knowledgeable enough to hazard a guess and risk some real money on it.
I have 1 put that expires this week at $40. I've lost about $1400 on puts I bailed out of. I hope they bail so I can be in the green on this lol.
Also, why I never consider paper profits to actually exist unless I've actually sold the thing.
on one hand, yes.
on the other, fuck goldman sachs this is a revolution.
Following a talking head and actually communicating en masse.
This is a really weird point in financial/stock market history.
Is it though? Is a handful of internet trolls making a quick buck by manipulating a small-time stock really going to put a dent into income inequality?
Did you see the interview where they refered to WSB as a Greed hive? https://www.cnbc.com/2021/01/23/the-stock-market-is-at-or-near-the-most-expensive-levels-ever-by-most-measures-when-will-it-matter.html
They engineered CDOs. Get fucked!
And the day isn't over yet, so while I'm sure some people have cashed out and realized their gains a lot of people are still letting it ride and going to be left empty handed.
Hindsight is 20/20. For every bet that would have paid off, there's another one where you would have lost your shirt and even if you get in / out at the right time on one doesn't mean it's anything but luck.
Edit - or even worse, the people trying to chase the trend who are just going to pump it up to get grifted.
No of course not, but it's nice to dream sometimes.
No it isn't. A revolution will hopefully come from a new paradigm in regulatory oversight with a new SEC, CFPB, and Congressional hearing chairs. This is just some day traders possibly getting rich.
it's meta trading after realizing that shorts asked for 100 feet of rope to be sold to them so they could hang themselves with
Moreover, I don't think it's going to happen again soon, which goes to FOMO, because the big banks do not want to be in the position of holding the bag for an annihilated short
Also it is kinda hilarious that they used game stop as a primo example of gaming the system
I mean if you bought in Friday you've already doubled your money right? Selling now was the safe play. I'd have jumped out about an hour ago.
The last option. Stock prices have no direct impact on a company really. Or any actual relation to the company's value either, as this has demonstrated.
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Right, I mean I literally got an ad today that if I had bought 1k of marvel/netflix/amazon whenever this "expert" claimed I'd have 170k today.
I could have also sat on wework or theranos or whatever hot stock that cratered and lost it all. But that doesn't make for a good ad.
It's the same gambling, if faster, you'll only hear the winners brag after the fact, and nothing from the people who get hosed.
It can severely change compensation amounts for any employees with stock options or stock grants. It can allow a company to raise capital cheaply if they're overinflated (see Tesla issuing more stock at peaks to take advantage). For Gamestop, this has likely wildly impacted executive comp, as that's mostly stock and some bonuses are stock performance based.
The buyer of a short has to give it back to the person who was holding it, who can sell it to another shorter sure... but that is not good for the person shorting until the price is below their strike price