I mean cool, you can rest assured that you are appropriately above it all and way more logical than others around you, whatever will make you feel better than the rabble you’re engaged with.
I mean cool, you can rest assured that you are appropriately above it all and way more logical than others around you, whatever will make you feel better than the rabble you’re engaged with.
When you want to provide sources and verifiable information about your theories by all means @ me.
In addition to GameStop, several other publicly traded companies, including AMC; BlackBerry; Bed, Bath, and Beyond; Nokia; and Tootsie Roll Industries,10 have seen huge shifts in their share price driven by similar internet trading schemes. These wild fluctuations are just the latest indication that many private equity firms, hedge funds, and other investors, big and small, are treating the stock market like a casino, giving little consideration to the companies, communities, workers, and consumers that may be affected by these risky bets. The recent chaos reveals a clear distortion in securities markets, with benefits accruing to investors that do not clearly benefit the company’s workers, consumers, or the broader economy.
The SEC has a mandate to “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation,” and “promote a market environment that is worthy of the public’s trust.”17 The Commission must review recent market activity affecting GameStop and other companies, and act to ensure that markets reflect real value, rather than the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those traders. To protect and restore public trust in sound securities regulation and enforcement, the Commission must identify gaps in existing securities laws and rules and ways in which the Commission can improve its enforcement capabilities.
Hedge funds, banks, billionaires and even well off retail traders have been speculating for decades and making money off it.
The general public does it en masse once and that's the thing that kicks off the need for new regulations?
This stinks of government fearing what organised self-directed public capital can do
Warren's entire reason for being in the Senate is getting pissed off at the antics of large companies. (well and the GOP fucking with the consumer protection bureau). That isn't what she's going for here.
This is, at its core, retail traders trying to bankrupt a hedge fund and maybe get rich doing it. She should be for that, IMO. AOC has figured that much out.
This take reads like the people who came into this thread yesterday and called GME a bunch of tulip bulbs thinking it made them sound smart.
I think when you get to the point where you are trying to frame Warren as a Wall St shill, you should probably reassess your own framing of the situation.
I'm not sure why you think Warren should be in favour of this kind of crazy volatility.
While I hold no love for the likes of Leon Cooperman, I do not like the idea of Redditors being the ones to keep hedge fund vultures in check. I want folk like Warren writing laws to fix it. This event is good popcorn entertainment, but should not be the expectation.
I agree, but in the reality where legislation isn't possible, I'll take the Redditors until it is.
For those in the thread who are saying that this is simply a laugh at rich people, please look at this post. This is a post that encapsulates the position that Redditors are policing the market and/or a hero type.
Can you legitimately conceive of a set of actions Redditors can take to fairly police options long term? I can't.
In addition to GameStop, several other publicly traded companies, including AMC; BlackBerry; Bed, Bath, and Beyond; Nokia; and Tootsie Roll Industries,10 have seen huge shifts in their share price driven by similar internet trading schemes. These wild fluctuations are just the latest indication that many private equity firms, hedge funds, and other investors, big and small, are treating the stock market like a casino, giving little consideration to the companies, communities, workers, and consumers that may be affected by these risky bets. The recent chaos reveals a clear distortion in securities markets, with benefits accruing to investors that do not clearly benefit the company’s workers, consumers, or the broader economy.
The SEC has a mandate to “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation,” and “promote a market environment that is worthy of the public’s trust.”17 The Commission must review recent market activity affecting GameStop and other companies, and act to ensure that markets reflect real value, rather than the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those traders. To protect and restore public trust in sound securities regulation and enforcement, the Commission must identify gaps in existing securities laws and rules and ways in which the Commission can improve its enforcement capabilities.
Hedge funds, banks, billionaires and even well off retail traders have been speculating for decades and making money off it.
The general public does it en masse once and that's the thing that kicks off the need for new regulations?
This stinks of government fearing what organised self-directed public capital can do
Warren's entire reason for being in the Senate is getting pissed off at the antics of large companies. (well and the GOP fucking with the consumer protection bureau). That isn't what she's going for here.
This is, at its core, retail traders trying to bankrupt a hedge fund and maybe get rich doing it. She should be for that, IMO. AOC has figured that much out.
This take reads like the people who came into this thread yesterday and called GME a bunch of tulip bulbs thinking it made them sound smart.
I think when you get to the point where you are trying to frame Warren as a Wall St shill, you should probably reassess your own framing of the situation.
I'm not sure why you think Warren should be in favour of this kind of crazy volatility.
While I hold no love for the likes of Leon Cooperman, I do not like the idea of Redditors being the ones to keep hedge fund vultures in check. I want folk like Warren writing laws to fix it. This event is good popcorn entertainment, but should not be the expectation.
I agree, but in the reality where legislation isn't possible, I'll take the Redditors until it is.
For those in the thread who are saying that this is simply a laugh at rich people, please look at this post. This is a post that encapsulates the position that Redditors are policing the market and/or a hero type.
Can you legitimately conceive of a set of actions Redditors can take to fairly police options long term? I can't.
I won't speak to what lilnoobs meant here but it doesnt read that they think Redditors are the regulators. Frankly your whole approach is kinda weird when no one has suggested these sorts of things.
I started reading up on this stuff the other day and the one question I still don't see an answer to is...
If WSB holds and the hedge funds go bankrupt, GME will be crazy high. What happens to the stocks at that point, is there anyone left to sell to? Are they going to be worth anything? Or is the plan to hold until it is obvious the hedge funds are done for, then sell the stocks to them at a crazy high rate?
The very, very short version is, GME is shorted over 100%. That means that if all the shorts get called, there is a guaranteed buyer for every share. The shorts can get called if the price rises above a certain amount and/or the brokerage might close out their short to avoid further loses. In order to close a short, they must buy a stock. This sends the price higher. This causes more shorts to have to close.
If it sets off a truly insane chain reaction of shorts closing to cut loses, it could clear the order book completely, and every sell order on the book will clear at any price. During some of the halted trading yesterday, there were bids of $150 against asks for $4000! That is a truly deranged spread. There have been scattered tales of sell limits above 2000 being executed.
Mine didn't though, so take these tales with a grain of salt.
Basically, if they pull off this short squeeze and the hedge funds don't find a way out, if you have GME and you have a sell limit, you will get your fucking money.
After that, anyone who didn't set a sell limit will be left holding a $10 stock if they are lucky.
I mean, the sell limit is not a guarantee, no? The price of the stock could plummet way past that before anyone snaps up your share, it's not a guaranteed first in first out thing.
Like I said, the very short version.
The short sellers could manage to avoid the squeeze. The SEC could halt trading because fuck you that's why. Brokerages could just go "Oops, we actually couldn't settle your purchase of GME in the first place, it's gone". Some of the shenanigans we've seen are already unprecedented.
But people we smarter than myself have written long and convincing articles filled with market data that the shorts are too numerous, the volume and liquidity is too low, and the fees to put off closing positions too high, for this to be escaped through legitimate means.
If the market is allowed to market, everyone with a sell limit gets their fucking money. That's increasingly becoming a big if as the major players whinge about "systemic risk".
Or the lenders could decide that they don't want to be stuck with a bunch of worthless stock at the end of this and just allow the shorters to buy their way out without actually making them give them the shares.
Yeah I don’t see why this doesn’t happen.
People holding out for the “to the moon” price seem to be assuming that at some point they will have the last outstanding share of GME, or whatever, and then the short seller will have to pay literally any price they ask.
Meanwhile, if I’m the guy who loaned you the stock, especially if I bought it at $10 or whenever the real price as back in 2020, I don’t see why I’m not happy to let you settle out at $100 or even $50 instead of the eleventy-billion dollars that u/PumpInTheDumper is demanding. I make $90, you lose less than you would have, we both go home happy. Especially since the stock is going back to $10 when this is all over...it’s still GameStop.
That’s how this ends, right? A negotiated settlement between rational actors (the ones they owe the stock to) that end runs around the most unreasonable holdouts?
In addition to GameStop, several other publicly traded companies, including AMC; BlackBerry; Bed, Bath, and Beyond; Nokia; and Tootsie Roll Industries,10 have seen huge shifts in their share price driven by similar internet trading schemes. These wild fluctuations are just the latest indication that many private equity firms, hedge funds, and other investors, big and small, are treating the stock market like a casino, giving little consideration to the companies, communities, workers, and consumers that may be affected by these risky bets. The recent chaos reveals a clear distortion in securities markets, with benefits accruing to investors that do not clearly benefit the company’s workers, consumers, or the broader economy.
The SEC has a mandate to “protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation,” and “promote a market environment that is worthy of the public’s trust.”17 The Commission must review recent market activity affecting GameStop and other companies, and act to ensure that markets reflect real value, rather than the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those traders. To protect and restore public trust in sound securities regulation and enforcement, the Commission must identify gaps in existing securities laws and rules and ways in which the Commission can improve its enforcement capabilities.
Hedge funds, banks, billionaires and even well off retail traders have been speculating for decades and making money off it.
The general public does it en masse once and that's the thing that kicks off the need for new regulations?
This stinks of government fearing what organised self-directed public capital can do
Warren's entire reason for being in the Senate is getting pissed off at the antics of large companies. (well and the GOP fucking with the consumer protection bureau). That isn't what she's going for here.
This is, at its core, retail traders trying to bankrupt a hedge fund and maybe get rich doing it. She should be for that, IMO. AOC has figured that much out.
This take reads like the people who came into this thread yesterday and called GME a bunch of tulip bulbs thinking it made them sound smart.
I think when you get to the point where you are trying to frame Warren as a Wall St shill, you should probably reassess your own framing of the situation.
I'm not sure why you think Warren should be in favour of this kind of crazy volatility.
While I hold no love for the likes of Leon Cooperman, I do not like the idea of Redditors being the ones to keep hedge fund vultures in check. I want folk like Warren writing laws to fix it. This event is good popcorn entertainment, but should not be the expectation.
I agree, but in the reality where legislation isn't possible, I'll take the Redditors until it is.
For those in the thread who are saying that this is simply a laugh at rich people, please look at this post. This is a post that encapsulates the position that Redditors are policing the market and/or a hero type.
Can you legitimately conceive of a set of actions Redditors can take to fairly police options long term? I can't.
No, I'm saying that there isn't the political capital in Congress to pass meaningful legislation and in that reality, which is the reality we currently exist within, I am completely fine with normal joe fucking with hedgies by using their own rules against them and sending them into poverty.
I am not going to be upset about someone taking a dump on Monty Burns' lawn.
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Monkey Ball WarriorA collection of mediocre hatsSeattle, WARegistered Userregular
edited January 2021
If my math is right, a rule saying you can't loan out more than 50% of the stocks you own would ensure that there could never be more than 100% short interest, no matter how long the chain of shorts goes.
This doesn't seem like an unreasonable limitation. You could set it to 40% and leave some breathing room.
Monkey Ball Warrior on
"I resent the entire notion of a body as an ante and then raise you a generalized dissatisfaction with physicality itself" -- Tycho
I started reading up on this stuff the other day and the one question I still don't see an answer to is...
If WSB holds and the hedge funds go bankrupt, GME will be crazy high. What happens to the stocks at that point, is there anyone left to sell to? Are they going to be worth anything? Or is the plan to hold until it is obvious the hedge funds are done for, then sell the stocks to them at a crazy high rate?
The very, very short version is, GME is shorted over 100%. That means that if all the shorts get called, there is a guaranteed buyer for every share. The shorts can get called if the price rises above a certain amount and/or the brokerage might close out their short to avoid further loses. In order to close a short, they must buy a stock. This sends the price higher. This causes more shorts to have to close.
If it sets off a truly insane chain reaction of shorts closing to cut loses, it could clear the order book completely, and every sell order on the book will clear at any price. During some of the halted trading yesterday, there were bids of $150 against asks for $4000! That is a truly deranged spread. There have been scattered tales of sell limits above 2000 being executed.
Mine didn't though, so take these tales with a grain of salt.
Basically, if they pull off this short squeeze and the hedge funds don't find a way out, if you have GME and you have a sell limit, you will get your fucking money.
After that, anyone who didn't set a sell limit will be left holding a $10 stock if they are lucky.
I mean, the sell limit is not a guarantee, no? The price of the stock could plummet way past that before anyone snaps up your share, it's not a guaranteed first in first out thing.
Like I said, the very short version.
The short sellers could manage to avoid the squeeze. The SEC could halt trading because fuck you that's why. Brokerages could just go "Oops, we actually couldn't settle your purchase of GME in the first place, it's gone". Some of the shenanigans we've seen are already unprecedented.
But people we smarter than myself have written long and convincing articles filled with market data that the shorts are too numerous, the volume and liquidity is too low, and the fees to put off closing positions too high, for this to be escaped through legitimate means.
If the market is allowed to market, everyone with a sell limit gets their fucking money. That's increasingly becoming a big if as the major players whinge about "systemic risk".
Or the lenders could decide that they don't want to be stuck with a bunch of worthless stock at the end of this and just allow the shorters to buy their way out without actually making them give them the shares.
Yeah I don’t see why this doesn’t happen.
People holding out for the “to the moon” price seem to be assuming that at some point they will have the last outstanding share of GME, or whatever, and then the short seller will have to pay literally any price they ask.
Meanwhile, if I’m the guy who loaned you the stock, especially if I bought it at $10 or whenever the real price as back in 2020, I don’t see why I’m not happy to let you settle out at $100 or even $50 instead of the eleventy-billion dollars that u/PumpInTheDumper is demanding. I make $90, you lose less than you would have, we both go home happy. Especially since the stock is going back to $10 when this is all over...it’s still GameStop.
That’s how this ends, right? A negotiated settlement between rational actors (the ones they owe the stock to) that end runs around the most unreasonable holdouts?
At some point it will go back down. I don't think there will be a negotiated settlement because some number of shares will remain liquid. So unless people keep buying shorts can unwind.
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CambiataCommander ShepardThe likes of which even GAWD has never seenRegistered Userregular
RobinHood also did not provide that explanation when their CEO was live last night, and we have multiple random billionaires in interviews (who, granted, may not know anything specific) more or less openly stating that the game should be rigged in favor of hedge funds and closing trades is good because it prevents losses (implied: for shorts).It is possible Robinhood was also cash poor, but at best that appears to be a happy justification for stopping trading.
I mean, I don't understand the stock market, but the first thing he says to explain his actions is that the company is under a lot of requirements and didn't have enough cash flow to cover his phrase.
It's not that he didn't bring up this issue last night. The problem is that people already wrote off his explaination from last as bull shit.
I think framing this as normal Joe's taking down a hedge fund is a lot of people trying to put their own shit on this. Like one of the primary memers that got this ball rolling was a guy that bought up 50k of GME before it took off cause he was hoping to squeeze these hedges.
This was not average joes taking down a hedge, this was a concerted effort by someone investing 10s of thousands of dollars in a long game that he could only make work via fuckin reddit memes, poorly regulated retail trading, and convincing a bunch of folks to back his play. He's a multi millionaire now. The normal Joe's were never the driving force here, they aren't the ones that set this gambit up, the normal Joe's are being used in a game just as much as game stop is.
Probably because he said that wasn’t it. They stopped stocks to “protect themselves and their customers” but they went and extended the line of credit due to the increase requirements.
Note that their customers are the ones that buy their data. Not the ones that make trades
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CambiataCommander ShepardThe likes of which even GAWD has never seenRegistered Userregular
RobinHood also did not provide that explanation when their CEO was live last night, and we have multiple random billionaires in interviews (who, granted, may not know anything specific) more or less openly stating that the game should be rigged in favor of hedge funds and closing trades is good because it prevents losses (implied: for shorts).It is possible Robinhood was also cash poor, but at best that appears to be a happy justification for stopping trading.
I mean, I don't understand the stock market, but the first thing he says to explain his actions is that the company is under a lot of requirements and didn't have enough cash flow to cover his phrase.
It's not that he didn't bring up this issue last night. The problem is that people already wrote off his explaination from last as bull shit.
I listened to the entire clip, assuming I had missed something about this guy. But no, he never says anything about not having the cash to do it. In fact when first asked the question, he spends an entire minute dropping a soundbite about how great Robinhood is without answering the question. He's asked the question five times and the times he does finally give an answer mumbles "regulatory requirements", not that they didn't have the cashflow to cover.
Cambiata on
"If you divide the whole world into just enemies and friends, you'll end up destroying everything" --Nausicaa of the Valley of Wind
I am not going to be upset about someone taking a dump on Monty Burns' lawn.
I also don't need to know exactly how much feces there was in the dump, or how much it "really" cost Burns to get the lawned cleaned.
To the extent that FCC’s take is a position I think is worth arguing for, I think it’d be good to have an idea whether Mr. Burns actually bled or if the rich are so insulated that this unprecedented cut amounts to a barely noticeable pin prick that these people are unaccustomed to. Because the next time you hit them it’s good to know where the bleeding actually starts to be noticeable.
However, as a human being, my emotional response is, “Yes, prick the bastards every time you can, even if they barely notice.” I.e. I support the kids loudly playing soccer in the streets outside of expensive hotels all night during G20 conferences to potentially annoy wealthy capitalists.
That said, obviously nobody should settle for just annoying the rich versus erasing their existence, but I don’t think anybody here is.
I mean, this still comes across as "oh no, we can't let them keep trading because then our stupid choices would have consequences". Which of course leads to a couple questions:
1) Why shouldn't you face consequences when you allowed this?
2) Why is the fix to shut out only the little guys?
Lots of people entered into this with the specific goal of breaking the system, and now they're surprised that the system broke.
Like, if you find a bug for an infinite loop in a computer game, it doesn't actually result in going to infinity. It results in the memory filling up and the game crashing and now you can't play until it restarts.
Wall Street is shitty and needs major reform, but the idea of "we weren't able to keep up with all the demand and therefore needed to stop" is a common place explaination that wouldn't be controversial in any other industry because people don't expect any other industry to have infinite flexibility. If my the local pizza shop told me they weren't taking new orders because they don't have enough ingredients, I would believe them, even if that pizza shop is papa John's and I hate the company.
RobinHood also did not provide that explanation when their CEO was live last night, and we have multiple random billionaires in interviews (who, granted, may not know anything specific) more or less openly stating that the game should be rigged in favor of hedge funds and closing trades is good because it prevents losses (implied: for shorts).It is possible Robinhood was also cash poor, but at best that appears to be a happy justification for stopping trading.
I mean, I don't understand the stock market, but the first thing he says to explain his actions is that the company is under a lot of requirements and didn't have enough cash flow to cover his phrase.
It's not that he didn't bring up this issue last night. The problem is that people already wrote off his explaination from last as bull shit.
I listened to the entire clip, assuming I had missed something about this guy. But no, he never says anything about not having the cash to do it. In fact when first asked the question, he spends an entire minute dropping a soundbite about how great Robinhood is without answering the question. He's asked the question five times and the times he does finally give an answer mumbles "regulatory requirements", not that they didn't have the cashflow to cover.
Just under two minutes in, he says there are financial requirements have to put up money for clearing houses and the amount of money they put up has to deal with volatility.
I think framing this as normal Joe's taking down a hedge fund is a lot of people trying to put their own shit on this. Like one of the primary memers that got this ball rolling was a guy that bought up 50k of GME before it took off cause he was hoping to squeeze these hedges.
This was not average joes taking down a hedge, this was a concerted effort by someone investing 10s of thousands of dollars in a long game that he could only make work via fuckin reddit memes, poorly regulated retail trading, and convincing a bunch of folks to back his play. He's a multi millionaire now. The normal Joe's were never the driving force here, they aren't the ones that set this gambit up, the normal Joe's are being used in a game just as much as game stop is.
yes, but the end result is that a bunch of people and companies who play the stock market like a casino were made to lose. that's a good result no matter what.
can someone who knows way more than me explain to me how short selling adds any value into the world? maybe it does and maybe i don't understand it, because i don't see and value creation here.
to be honest, im disappointed in warren's reaction and i'm someone who wanted her to be president. the way i see it, a bunch of redditors beating hedge funds at their own game is an incredible thing and should be applauded through and through, regardless of why or how (or even who, for that matter). taking 10M out of a hedge fund's bank account and depositing it straight into any redditor's bank account is a great thing.
ideally, we would see regulation that effectively prohibits all the gambling nonsense we see nowadays and pushes the stock market toward a return to the concept of actual investment (i.e., a way for cash-strapped doers to find economic backers).
I think framing this as normal Joe's taking down a hedge fund is a lot of people trying to put their own shit on this. Like one of the primary memers that got this ball rolling was a guy that bought up 50k of GME before it took off cause he was hoping to squeeze these hedges.
This was not average joes taking down a hedge, this was a concerted effort by someone investing 10s of thousands of dollars in a long game that he could only make work via fuckin reddit memes, poorly regulated retail trading, and convincing a bunch of folks to back his play. He's a multi millionaire now. The normal Joe's were never the driving force here, they aren't the ones that set this gambit up, the normal Joe's are being used in a game just as much as game stop is.
I bought a single stock as a show of solidarity, and a maybe I'll keep it to remind my self that everything is made up and the points don't matter. The only way this is a great awakening for the average joe is if the appropriate people (Congress or the Baby Jesus or whoever) enact some kind of regulation (that favors the everyman).
Number One Tricky
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CambiataCommander ShepardThe likes of which even GAWD has never seenRegistered Userregular
RobinHood also did not provide that explanation when their CEO was live last night, and we have multiple random billionaires in interviews (who, granted, may not know anything specific) more or less openly stating that the game should be rigged in favor of hedge funds and closing trades is good because it prevents losses (implied: for shorts).It is possible Robinhood was also cash poor, but at best that appears to be a happy justification for stopping trading.
I mean, I don't understand the stock market, but the first thing he says to explain his actions is that the company is under a lot of requirements and didn't have enough cash flow to cover his phrase.
It's not that he didn't bring up this issue last night. The problem is that people already wrote off his explaination from last as bull shit.
I listened to the entire clip, assuming I had missed something about this guy. But no, he never says anything about not having the cash to do it. In fact when first asked the question, he spends an entire minute dropping a soundbite about how great Robinhood is without answering the question. He's asked the question five times and the times he does finally give an answer mumbles "regulatory requirements", not that they didn't have the cashflow to cover.
Just under two minutes in, he says there are financial requirements have to put up money for clearing houses and the amount of money they put up has to deal with volatility.
Yes, he says that there are requirements. He doesn't then say "we didn't have the ability to meet those requirements", he says they had to "prudently manage" the risks. That implies he had a choice, that he could have complied with the regulatory requirements, but didn't out of prudence. If it's true that they needed more capital before they could allow the trades, then he wasn't "prudently managing the risks", he was just doing the only thing he could do.
"If you divide the whole world into just enemies and friends, you'll end up destroying everything" --Nausicaa of the Valley of Wind
The house losing one bet that it can then avoid is not making the house bleed
Agreed, but when the game is this rigged, I think it’s only appropriate to enjoy the discomfort of those who rig it whenever you can.
And I think it’s still up in the air as to how extensive losses might turn out to be.
That said, I take your sentiment to be something like, “This changes nothing meaningful, this lionization/party is premature,” and I mostly agree with that.
But any timely and appropriate celebration of the end of inherently unjust economic disparity probably won’t be held in my lifetime, so.
OneAngryPossum on
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VanguardBut now the dream is over. And the insect is awake.Registered User, __BANNED USERSregular
But the stock market is not a computer game. The system has not broken. One player is about to lose money and people will be mad if that does not happen because the player has been a shit since forever
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AegeriTiny wee bacteriumsPlateau of LengRegistered Userregular
But the stock market is not a computer game. The system has not broken. One player is about to lose money and people will be mad if that does not happen because the player has been a shit since forever
I would argue that this situation happened in many ways because WSB "gamified" this system to a degree. Essentially they saw an opponent make a poor move and they've reacted by pinning them right into it. Kind of like chess, but with stocks instead of pawns.
That said, I take your sentiment to be something like, “This changes nothing meaningful, this lionization/party is premature,” and I mostly agree with that.
But any timely and appropriate celebration of the end of inherently unjust economic disparity probably won’t be held in my lifetime, so
But at least for a second there, the completely detached and batshit nature of, and inherent unfairness in the modern market, pierced the public conscious in a way I'm not sure it has ever before, at least in my lifetime anyway, not even in 2008. For one day everyone was pissed at the fat cats, and that anger crossed political, class, and social boundaries in a way I didn't think possible.
So at least for the moment, I'm not particularly interested in navel gazing and instead am just going to enjoy that a bullet just whizzed by the bow of donor class's ship, and it was funny as hell.
If my math is right, a rule saying you can't loan out more than 50% of the stocks you own would ensure that there could never be more than 100% short interest, no matter how long the chain of shorts goes.
This doesn't seem like an unreasonable limitation. You could set it to 40% and leave some breathing room.
It would cap at a maximum of 100% short, allowing for fractional shares. Slightly less without. Because of re-lending you get a convergent geometric series. This also assumes no repeats in the chain, in which case the limit is infinity %
The house losing one bet that it can then avoid is not making the house bleed
I don’t see them just not shorting anything going forward
Maybe they don’t do this exact move for a while, but I suspect some portion of WSB know what they are doing and will find another mark.
Yeah I suspect looking for shorts isn't going to be the way anyone goes forward. Now that there are eleventy billion explanations of it on the internet, everyone knows what it is now.
People earlier in the thread talked about concerns for reddit being the police here, but really it's more like reddit is being a gray/white hat and exposing some vulnerabilities in the system.
I could see some people finding some other thing to exploit and then blasting it out into memeland to aim the frothing masses at the next target. There is very little anyone can do once the internet makes something viral and you kinda just gotta ride the wave.
Like don't get me wrong I've been loling this shit all week, cause like someone else said, this is indeed all objectively hilarious.
And yeah im gonna cheer on a hedge fund getting collapsed mostly by its own hubris cause again, lol.
However im not gonna make the mistake of thinking the other side is some altruistic group trying to fight for the everyman. Nah they're in large part mostly just the exact same kind of capitalists looking to make bank off the game that stock market is.
But the stock market is not a computer game. The system has not broken. One player is about to lose money and people will be mad if that does not happen because the player has been a shit since forever
I would argue that this situation happened in many ways because WSB "gamified" this system to a degree. Essentially they saw an opponent make a poor move and they've reacted by pinning them right into it. Kind of like chess, but with stocks instead of pawns.
Yup. But when one side gets checkmated you divvy up the their assets on the bet they lost. The proctors don’t toss the board because the wrong person lost.
New question:
Why are you allowed to loan/borrow stocks? What physical real-world good is there from being able to do that?
See my posts earlier in the thread (and in the economy thread from before this got started). The short is that without it bubbles are bigger and harder.
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MonwynApathy's a tragedy, and boredom is a crime.A little bit of everything, all of the time.Registered Userregular
New question:
Why are you allowed to loan/borrow stocks? What physical real-world good is there from being able to do that?
"Borrowing" isn't really accurate. You enter into a contract to but the stock today for X and sell it back to the same person for also X on a fixed date. Your counterpart charges a premium. This gives the counterpart the ability to gain liquidity without losing control of the underlying asset long-term.
It's legal because futures contacts are legal and the entire economy falls apart of you can't, for example, book your supply of grain ahead of time to ensure there's no disruption in the production of food.
RobinHood also did not provide that explanation when their CEO was live last night, and we have multiple random billionaires in interviews (who, granted, may not know anything specific) more or less openly stating that the game should be rigged in favor of hedge funds and closing trades is good because it prevents losses (implied: for shorts).It is possible Robinhood was also cash poor, but at best that appears to be a happy justification for stopping trading.
I mean, I don't understand the stock market, but the first thing he says to explain his actions is that the company is under a lot of requirements and didn't have enough cash flow to cover his phrase.
It's not that he didn't bring up this issue last night. The problem is that people already wrote off his explaination from last as bull shit.
I listened to the entire clip, assuming I had missed something about this guy. But no, he never says anything about not having the cash to do it. In fact when first asked the question, he spends an entire minute dropping a soundbite about how great Robinhood is without answering the question. He's asked the question five times and the times he does finally give an answer mumbles "regulatory requirements", not that they didn't have the cashflow to cover.
Just under two minutes in, he says there are financial requirements have to put up money for clearing houses and the amount of money they put up has to deal with volatility.
Yes, he says that there are requirements. He doesn't then say "we didn't have the ability to meet those requirements", he says they had to "prudently manage" the risks. That implies he had a choice, that he could have complied with the regulatory requirements, but didn't out of prudence. If it's true that they needed more capital before they could allow the trades, then he wasn't "prudently managing the risks", he was just doing the only thing he could do.
I don't really understand this hair splitting. What do you think "we have to put up money at clearinghouses, the amount we have to put up depends on market volatility" and "to prudential manage the risk and deposit requirements" means that is distinct from that?
If I cancel Netflix because I have to choose between Queen's Gambit and shelter, I am both "prudentially managing" my responsibilities and "can't afford" to keep Netflix. If they chose to restrict these particular trades because it would have made his platform fail to continue to do so, that's the same thing.
The legal resolution to this probably won't be to crack down on hedge funds, it'll be to crack down on people selling excessive shorts.
I don't even think it will need a legal resolution. Now the whole world will be on the lookout for potential short squeezes.
The underlying cause of all of this is that Andrew Left/Citron Research and whoever their hedge fund clients were went all in on shorting GameStop to a level that never made any sense. If you leave a big plate of tendies out on your back porch, you shouldn't be surprised when the crows and raccoons swarm into your yard to eat them.
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thatassemblyguyJanitor of Technical Debt.Registered Userregular
Like don't get me wrong I've been loling this shit all week, cause like someone else said, this is indeed all objectively hilarious.
And yeah im gonna cheer on a hedge fund getting collapsed mostly by its own hubris cause again, lol.
However im not gonna make the mistake of thinking the other side is some altruistic group trying to fight for the everyman. Nah they're in large part mostly just the exact same kind of capitalists looking to make bank off the game that stock market is.
I do believe that some of the folks that saw this in the last week did want to believe it was a way to give some of the robber barons that still walk around free and clear after 2008 a bloody nose.
It’s some part hilarity, some part rage inducing and some part tragedy.
The legal resolution to this probably won't be to crack down on hedge funds, it'll be to crack down on people selling excessive shorts.
I don't even think it will need a legal resolution. Now the whole world will be on the lookout for potential short squeezes.
The underlying cause of all of this is that Andrew Left/Citron Research and whoever their hedge fund clients were went all in on shorting GameStop to a level that never made any sense. If you leave a big plate of tendies out on your back porch, you shouldn't be surprised when the crows and raccoons swarm into your yard to eat them.
After staking this position then also making a lot of obnoxious social media noise about what a shit company it was to try to move the stock in favor of your bet this putting a large spotlight on your fuckup
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Why do I care?
I won't speak to what lilnoobs meant here but it doesnt read that they think Redditors are the regulators. Frankly your whole approach is kinda weird when no one has suggested these sorts of things.
Yeah I don’t see why this doesn’t happen.
People holding out for the “to the moon” price seem to be assuming that at some point they will have the last outstanding share of GME, or whatever, and then the short seller will have to pay literally any price they ask.
Meanwhile, if I’m the guy who loaned you the stock, especially if I bought it at $10 or whenever the real price as back in 2020, I don’t see why I’m not happy to let you settle out at $100 or even $50 instead of the eleventy-billion dollars that u/PumpInTheDumper is demanding. I make $90, you lose less than you would have, we both go home happy. Especially since the stock is going back to $10 when this is all over...it’s still GameStop.
That’s how this ends, right? A negotiated settlement between rational actors (the ones they owe the stock to) that end runs around the most unreasonable holdouts?
No, I'm saying that there isn't the political capital in Congress to pass meaningful legislation and in that reality, which is the reality we currently exist within, I am completely fine with normal joe fucking with hedgies by using their own rules against them and sending them into poverty.
This doesn't seem like an unreasonable limitation. You could set it to 40% and leave some breathing room.
At some point it will go back down. I don't think there will be a negotiated settlement because some number of shares will remain liquid. So unless people keep buying shorts can unwind.
I also don't need to know exactly how much feces there was in the dump, or how much it "really" cost Burns to get the lawned cleaned.
Huh?
I mean, I don't understand the stock market, but the first thing he says to explain his actions is that the company is under a lot of requirements and didn't have enough cash flow to cover his phrase.
It's not that he didn't bring up this issue last night. The problem is that people already wrote off his explaination from last as bull shit.
This was not average joes taking down a hedge, this was a concerted effort by someone investing 10s of thousands of dollars in a long game that he could only make work via fuckin reddit memes, poorly regulated retail trading, and convincing a bunch of folks to back his play. He's a multi millionaire now. The normal Joe's were never the driving force here, they aren't the ones that set this gambit up, the normal Joe's are being used in a game just as much as game stop is.
Note that their customers are the ones that buy their data. Not the ones that make trades
I listened to the entire clip, assuming I had missed something about this guy. But no, he never says anything about not having the cash to do it. In fact when first asked the question, he spends an entire minute dropping a soundbite about how great Robinhood is without answering the question. He's asked the question five times and the times he does finally give an answer mumbles "regulatory requirements", not that they didn't have the cashflow to cover.
To the extent that FCC’s take is a position I think is worth arguing for, I think it’d be good to have an idea whether Mr. Burns actually bled or if the rich are so insulated that this unprecedented cut amounts to a barely noticeable pin prick that these people are unaccustomed to. Because the next time you hit them it’s good to know where the bleeding actually starts to be noticeable.
However, as a human being, my emotional response is, “Yes, prick the bastards every time you can, even if they barely notice.” I.e. I support the kids loudly playing soccer in the streets outside of expensive hotels all night during G20 conferences to potentially annoy wealthy capitalists.
That said, obviously nobody should settle for just annoying the rich versus erasing their existence, but I don’t think anybody here is.
Lots of people entered into this with the specific goal of breaking the system, and now they're surprised that the system broke.
Like, if you find a bug for an infinite loop in a computer game, it doesn't actually result in going to infinity. It results in the memory filling up and the game crashing and now you can't play until it restarts.
Wall Street is shitty and needs major reform, but the idea of "we weren't able to keep up with all the demand and therefore needed to stop" is a common place explaination that wouldn't be controversial in any other industry because people don't expect any other industry to have infinite flexibility. If my the local pizza shop told me they weren't taking new orders because they don't have enough ingredients, I would believe them, even if that pizza shop is papa John's and I hate the company.
Just under two minutes in, he says there are financial requirements have to put up money for clearing houses and the amount of money they put up has to deal with volatility.
yes, but the end result is that a bunch of people and companies who play the stock market like a casino were made to lose. that's a good result no matter what.
can someone who knows way more than me explain to me how short selling adds any value into the world? maybe it does and maybe i don't understand it, because i don't see and value creation here.
to be honest, im disappointed in warren's reaction and i'm someone who wanted her to be president. the way i see it, a bunch of redditors beating hedge funds at their own game is an incredible thing and should be applauded through and through, regardless of why or how (or even who, for that matter). taking 10M out of a hedge fund's bank account and depositing it straight into any redditor's bank account is a great thing.
ideally, we would see regulation that effectively prohibits all the gambling nonsense we see nowadays and pushes the stock market toward a return to the concept of actual investment (i.e., a way for cash-strapped doers to find economic backers).
I bought a single stock as a show of solidarity, and a maybe I'll keep it to remind my self that everything is made up and the points don't matter. The only way this is a great awakening for the average joe is if the appropriate people (Congress or the Baby Jesus or whoever) enact some kind of regulation (that favors the everyman).
Yes, he says that there are requirements. He doesn't then say "we didn't have the ability to meet those requirements", he says they had to "prudently manage" the risks. That implies he had a choice, that he could have complied with the regulatory requirements, but didn't out of prudence. If it's true that they needed more capital before they could allow the trades, then he wasn't "prudently managing the risks", he was just doing the only thing he could do.
Agreed, but when the game is this rigged, I think it’s only appropriate to enjoy the discomfort of those who rig it whenever you can.
And I think it’s still up in the air as to how extensive losses might turn out to be.
That said, I take your sentiment to be something like, “This changes nothing meaningful, this lionization/party is premature,” and I mostly agree with that.
But any timely and appropriate celebration of the end of inherently unjust economic disparity probably won’t be held in my lifetime, so.
I don’t see them just not shorting anything going forward
Maybe they don’t do this exact move for a while, but I suspect some portion of WSB know what they are doing and will find another mark.
I would argue that this situation happened in many ways because WSB "gamified" this system to a degree. Essentially they saw an opponent make a poor move and they've reacted by pinning them right into it. Kind of like chess, but with stocks instead of pawns.
But at least for a second there, the completely detached and batshit nature of, and inherent unfairness in the modern market, pierced the public conscious in a way I'm not sure it has ever before, at least in my lifetime anyway, not even in 2008. For one day everyone was pissed at the fat cats, and that anger crossed political, class, and social boundaries in a way I didn't think possible.
So at least for the moment, I'm not particularly interested in navel gazing and instead am just going to enjoy that a bullet just whizzed by the bow of donor class's ship, and it was funny as hell.
It would cap at a maximum of 100% short, allowing for fractional shares. Slightly less without. Because of re-lending you get a convergent geometric series. This also assumes no repeats in the chain, in which case the limit is infinity %
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Yeah I suspect looking for shorts isn't going to be the way anyone goes forward. Now that there are eleventy billion explanations of it on the internet, everyone knows what it is now.
People earlier in the thread talked about concerns for reddit being the police here, but really it's more like reddit is being a gray/white hat and exposing some vulnerabilities in the system.
I could see some people finding some other thing to exploit and then blasting it out into memeland to aim the frothing masses at the next target. There is very little anyone can do once the internet makes something viral and you kinda just gotta ride the wave.
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Why are you allowed to loan/borrow stocks? What physical real-world good is there from being able to do that?
What else are we supposed to do when it didn't go to the moon today?
And yeah im gonna cheer on a hedge fund getting collapsed mostly by its own hubris cause again, lol.
However im not gonna make the mistake of thinking the other side is some altruistic group trying to fight for the everyman. Nah they're in large part mostly just the exact same kind of capitalists looking to make bank off the game that stock market is.
Yup. But when one side gets checkmated you divvy up the their assets on the bet they lost. The proctors don’t toss the board because the wrong person lost.
See my posts earlier in the thread (and in the economy thread from before this got started). The short is that without it bubbles are bigger and harder.
"Borrowing" isn't really accurate. You enter into a contract to but the stock today for X and sell it back to the same person for also X on a fixed date. Your counterpart charges a premium. This gives the counterpart the ability to gain liquidity without losing control of the underlying asset long-term.
It's legal because futures contacts are legal and the entire economy falls apart of you can't, for example, book your supply of grain ahead of time to ensure there's no disruption in the production of food.
I don't really understand this hair splitting. What do you think "we have to put up money at clearinghouses, the amount we have to put up depends on market volatility" and "to prudential manage the risk and deposit requirements" means that is distinct from that?
If I cancel Netflix because I have to choose between Queen's Gambit and shelter, I am both "prudentially managing" my responsibilities and "can't afford" to keep Netflix. If they chose to restrict these particular trades because it would have made his platform fail to continue to do so, that's the same thing.
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Given the number of people with severe FOMO jumping in, I think the marks will be the people jumping into WSB.
I don't even think it will need a legal resolution. Now the whole world will be on the lookout for potential short squeezes.
The underlying cause of all of this is that Andrew Left/Citron Research and whoever their hedge fund clients were went all in on shorting GameStop to a level that never made any sense. If you leave a big plate of tendies out on your back porch, you shouldn't be surprised when the crows and raccoons swarm into your yard to eat them.
I do believe that some of the folks that saw this in the last week did want to believe it was a way to give some of the robber barons that still walk around free and clear after 2008 a bloody nose.
It’s some part hilarity, some part rage inducing and some part tragedy.
After staking this position then also making a lot of obnoxious social media noise about what a shit company it was to try to move the stock in favor of your bet this putting a large spotlight on your fuckup