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I get it, but I still don’t think one instance of mobilised Millennial angst, standing up to big finance will deter fund managers from shady behaviour.
Maybe, but it might help bring attention to an area that may need regulation. Seems rather bizarre that having such an aggressive short position is even allowed, when loses could potentially be unlimited.
This is going to cause a massive row. The only thing that sets the price of a share is the equal ability of investors to buy and sell it on a level playiing field. If a platform only allows you to sell or buy then that directly affects the price. It's blatant market manipulation in plain sight. I suspect there will be a lot of lawyers getting excited at the prospect of a huge class action against the trading platforms.
I suspect there will be a lot of lawyers getting excited at the prospect of a huge class action against the trading platforms.
Class action suit already filed.
https://www.thedailybeast.com/robinhood-hit-with-class-action-after-trying-to-shut-down-wallstreetbets-gamestop-uprising
I actually bought $500 more @ $207 and sold at $240
So how does this work? Are you buying partial shares?
The only thing that sets the price of a share is the equal ability of investors to buy and sell it on a level playiing field. If a platform only allows you to sell or buy then that directly affects the price.
Not unprecedented, markets often stop trading when they are big swings in an attempt to stabilise things. This is obviously a barking mad situation, the true* value of the company left orbit some time ago, so intervention might help bring it back....
* based on proper metrics like earnings, profits etc not how much Redditors dislike hedge funds.
At least some US senators are commenting on the BS that this is.
Not exactly a high brow bunch, some of the new ones genuinely believe in the Qanon madness and were elected on that!
So how does this work? Are you buying partial shares?
It's how robinhood and t212 work. Fractional shares, you don't need to hold a full one. In fact you don't own them at all, all you do is give the traders the money, they buy shares and promise to pay you back when you 'sell' with whatever profit/loss added.
Poor people are not meant to make money like this.
Not unprecedented
Not unprecendented to suspend a share, but I've never heard of them only suspending one side of the equation. That must be unprecendented, and is transparently fraudulent.
Maybe, but it might help bring attention to an area that may need regulation. Seems rather bizarre that having such an aggressive short position is even allowed, when loses could potentially be unlimited.
HFs know what they are doing and have risk analysts working the numbers on all their bets - which don't always pay off. This particular scenario is a new experience for them and they may have got burnt this time, but that was always a known risk. They'll be rapidly adjusting their risk analysis taking this new behaviour into account and just carry on, maybe with smaller bets until the redditors get bored.
One of the interesting things from this is there are 100,000s of new day traders who have just signed up and their first experience of trading will be loosing money on this bet (as eventually GameStore will return to it's original value). Be interesting to see how keen they are after the euphoria wears off.
Poor people are not meant to make money like this.
No one makes money buying stock in a crap company! The whole thing is just daft.
Eventually there will be 300,000 redditors owning stock in a company no one wants. The HFs will have sold out (to more redditors) and the price will crash back to earth.
A few will be lucky and time it right, but who ever is left holding the baby will realise they just have a turd wrapped up in a nappy.
That must be unprecendented, and is transparently fraudulent.
The platforms are arguing that they are protecting their new clients (100,000 signed up in one day) from collective madness buying a massively pumped stock. I have some sympathy with them over that.
From reading the FT they haven't outright banned buying the stock, you just can't buy it on credit or margin but have to put up real $, which prices a lot of people out.
And some people call Bitcoin a scam.
Etoro have been shameful over this oh and Nokia to the mooooonnnn 😉
It's nice to give hedge funds a slap until you realize it's your pension pot
Re suspensions .... GME is going into and out of volatility suspension on the NYSE many times a day.
Platforms suspending the shares is complete different and is manly down to the fact that the truly unprecedented demand for quotes/deals are overwhelming the platforms infrastructure.
Those platform have a service other clients dealing in other instruments and have decided to close shop on GME etc (but allowing you to close out your position) .... that's up to them, they'll be losing comm in GME by doing so.
Nothing stopping you buying GME around the corner.
25 odd years in the city ... had a phone glued to my ear during dotcom boom, saw plenty of action during the financial crisis (was on the desk the night lehman went pop) thought this time last year was busy.... 2021 and the last few days has blown the doors of the lot.
Grabbing some time now for something to eat and virtual parents evening before helping out for the close.
Hope my adrenaline subsides tonight and I can get to sleep before 2am for the first time this week.
Hopes n fears
Im the n
🙂
It’s nice to give hedge funds a slap until you realize it’s your pension pot
Not any of mine!
Any well run pension fund will be heavily diversified and a HF would be classed as a relatively high risk asset, so no more than a few % would be invested in it.
HFs are quite capable of loosing large sums without any help from Reddit eg Crispin Odey has lost loads recently https://www.bloomberg.com/news/articles/2021-01-06/crispin-odey-s-slump-deepens-as-hedge-fund-loses-another-30-5
From reading the FT they haven’t outright banned buying the stock, you just can’t buy it on credit or margin but have to put up real $, which prices a lot of people out.
That's not a bad thing. The proliferation of financial tools (derivatives) has a lot to answer for.
Crispin Odey has lost loads recently
Naaw, couldn’t happen to a nicer bloke.
Footflaps..
Nor mine my investments are all set to eco friendly and socially responsible. I'm almost a socialist:) It's only my spare cash fun money that I Chuck at risky stuff.
WeBull allowing buying again
GameStop and AMC jumped immediately
The Whitehouse has waded in apparently
The Whitehouse has waded in apparently
Unlikely, just more conspiracy nonsense.
Reddit is not exactly cutting edge investigative journalism.
travesty of justice
They're not saving the world, they've had their knuckles rapped for being dicks.
Naaw, couldn’t happen to a nicer bloke.
I did think exactly the same, plus his name is very similar to Odious..
The Whitehouse has waded in apparently
I would want a slightly more traceable source. Why would a codemonkey know what the boss was talking about? I would be having that call in a private room and not have it announced as "the whitehouse calling".
Its going to get messy. Got Ted Cruz supporting something AOC tweeted so I think it will get fairly political quick. There do seem to be some good reasons for them not selling but whether they are good enough will remain to be seen.
The postmortems of exactly what went on should be interesting. Why did it suddenly gain so much attention?
There do seem to be some good reasons for them not selling but whether they are good enough will remain to be seen.
Those short positions are due in this Friday, hence the not selling, and the dodgy dealings with retail trading apps. An sec fine is probably less than covering there bets will cost them.
Love STW you even saved me trailing through the reddit guff.
If Wzzz reddit post up there isn't a prime example of Russian Cyber Bots then Freddie Starr probably ate my hampster
If this is to be believed, theres still a huge amount of short exposure out there on GameStop
https://isthesqueezesquoze.com/
Robin hood saying they will allow some buying tomorrow. Should be a wild day!
From reading the FT they haven’t outright banned buying the stock, you just can’t buy it on credit or margin but have to put up real $, which prices a lot of people out.
why shouldn't it always be like this, for oiks like me but also massive banks & hedge funds ? I don't get it (clearly)
I couldn't resist and bought another $1000 @ $200 just before the close yesterday (eToro reopened trades with about 45 mins before the close). Roll on 2:30pm, be ready to laugh at my misfortune :p
According to some news posts the hedge funds had already lost $70b by the end of the day yesterday - today could be much worse for them (lets hope the SEC or trading platforms don't freeze us out...)
Apparently stock liquidity became a real issue yesterday, so many people were holding that the hedge funds couldn't buy enough to offset their shorts, which drove the price up to nearly $500, that's when the trading platforms changed to only allow sells and triggered the dip. The hedge funds hope was it would dip low enough it would cause a panic and a rush to sell and crash the price enough that their shorts were OK but fortunately enough people still held that the crash didn't happen.
Not sure if they can try the same tactic today, would depend when their shorts expire - they might have already accepted they're making a big loss and that by buying to try and cover their positions they'll lose less than they would by failing to crash the price in time, this is the scenario where the Reddit $1000+ price predictions come from.
I have a feeling something else will happen and we'll all end up shafted as the rules get changed to help the funds...
Likely this. All the evidence points to the game being rigged in favour of the house and the house's friends.
This is scandalous. I can't believe Facebook has shut down their group for adult sexual something. It's duck Ng unbelievable. What is it that means that once you've climbed the greasy pole you are obliged to royally shit on the people below
Because l can't literally switch off (workhard/playhard makes sense now, wish the pub was open) l'll engage.
The rules of any exchange will NOT be changed.
The terms of business between you and your broker/platform may. But that, no doubt, will be in their small print that you have signed up to.
But while we are talking about rules and "the man". When this goes south, which it HAS to, will it be right that the "little man" wasn't first warned and then restrictioned from a scam.
Gotta ask, would you be throwing this money onto a roulette table?
Good luck
you are obliged to royally shit on the people below
Is this a Prince Andrew reference?
Well someone's gonna get shafted anyway.
A big chunk of the 100,000 brand new sign ups to Trading212 for sure.
At the end of the day, if you haven't partially cashed out for a profit then either you're going to be left holding a stock in a company that will magically change it's business overnight in such a way that it genuinely commands that super high price, or you're going to be left holding a worthless stock.
You haven't made a profit, and you're not rich until you are out.
It's not the shafting by the big guys changing the rules that will shaft 70% of the hype train. It's just the fundamental of playing chicken. Hopefully those 100,000 that jumped on it after hearing it on mainstream media have the intelligence to use stop loss features. But ultimately someone, somewhere, is gonna be holding the stocks bought at insane prices.
And it's funny that the "poor" people are those that can go splurge a 4 figure sum on an outright gamble to get rich quick. "poor" in my dictionary are those that would go down the bookies and waste a tenner's worth of their dole money on Tiger Lily in the 4:30 at Kempton hoping to win big.
terrible comparison. This is [i]way[/i] more exciting than roulette, and I’m not even involved! 🤣 Plus there’s the chance of shitting over a bunch of ****ers! Brilliant! 😂😂 Most commenters on the Reddit thread seem to have written the money off anyway, and all the others from outside who’ve jumped on the hype train? Adults, presumably, who (should) understand the risk.Gotta ask, would you be throwing this money onto a roulette table?
Gotta ask, would you be throwing this money onto a roulette table?
I rarely gamble and absolutely this is a gamble and for sure it's going to crash at some point (not necessarily today - although there's a fair chance of it happening). It's not as black and white (or red) as roulette though, unless ofc we get locked out of selling to (when the slide happens). Of the $1500 I'm now in for I'm planning to cash out $1000 shortly after trading opens (assuming it hits $250ish), that means I'll be $500 up this week (cashed out) so I can afford to leave the $500 left as a pure gamble. Of course it could start plummeting immediately after opening and I end up losing big time (I have stop losses set...) but hey it's been a fun ride :p
From reading the FT they haven’t outright banned buying the stock, you just can’t buy it on credit or margin but have to put up real $, which prices a lot of people out.
why shouldn’t it always be like this, for oiks like me but also massive banks & hedge funds ? I don’t get it (clearly)
In all fairness it is really quite complicated. All newbies see is people posting screen graps of their RobinHood app showing $100k gains and think 'I want that some of that'.
Several things are happening.
The '$100k gains' etc aren't real until they sell all their stock and have real $$ is their account. For this to happen (ie them to be able to sell), someone else must be willing to buy. These are shares in a crap company no one really wants to own. So, remove all the get rich quick euphoria (madness) and it's a house of cards waiting to collapse (not unlike Bitcoin).
Most people buying the stock on 212 / RobinHood etc aren't buying with their own money. They put in a small deposit eg $100 or less and then buy a small number of shares (or part shares). If those shares rise in price, then the platform offers to loan them a percentage of their paper gain (margin) which they can then trade again and buy more shares, pushing the price up, so they make another paper gain and the plaform lends them a percentage of that to buy more. Amplify this by 500,000 people trading on margin on one stock with low liquidity (not many shares available in the market to trade) and you rapidly get a huge spike in the price.
However, most of the money spent buying stock was margin ie money the trading platform put up and leant to it's traders. For every margin trade, the platform places a margin call, which is an automatic sell on the price falling near to the price needed for the client to be able to repay his debt back to the platform. So, there were several million trades made manually to build the stock up and they are sat upon seveal million margin calls which will be automatically actioned the minute the stock starts to fall. It's a massive powder keg, just sitting there waiting for someone to light the fuse.
That fuse is sentiment changing / redditors getting bored / too many trying to convert paper gains into real $ gains.
RobinHood etc are also at risk here as if the price falls too fast and they can't sell quick enough (not enough buyers) they will loose money as they leant most of the money which pushed the stock up, hence they did / have suspended margin buying (and tapped their investors for $1b equity yesterday to help shore up their finances).
At some point Gamestop shares will return to their original value which will be a lot less than many 100,000 people bought them for. Anyone left holding them is in for a shock...
Perfectly sensible approach... Well played.
How many others have set stop losses?
Yours is above theirs, l hope.
Sorry really not wishing you ill... In fact l'd love it for you to be smiling and with enough money in your sky rocket for a new bike at the end of this
I'm just trying to point out that, as Andy above has, the Reddit crowd will end up eating itself.
Better to be lucky than good
Have fun
It is fascinating watching it all play out, especially now that it's gone political with, bizarrely AOC and DonJr agreeing that it's an outrage.
https://twitter.com/AOC/status/1354830697459032066?s=20
https://twitter.com/DonaldJTrumpJr/status/1354793103090212865?s=20
I bet there are far more politicians who receive substantial donations from Wall St (if they weren't before, they're asking for them now) so ironically this could be the unifying event that sees cross-bench collaboration.
Another interesting facet is how the internet detectives have come out to essentially work for WSB:
From reading the FT they haven’t outright banned buying the stock, you just can’t buy it on credit or margin but have to put up real $, which prices a lot of people out.
They banned trading options on margin which is perhaps a justifiable move. They also automatically closed people's call positions when the stock was at its lowest yesterday, citing concerns about volatility. More dubious. But the smoking gun was later when they prevented anyone from buying whilst still allowing sale of stock. Given that a large proportion of the 'diamond hands' WSB / Reddit / hype stock of GME was bought through that platform, that was a huge driver to force the price in one direction only. This is where the internet detectives come in. They discovered that, incidentally*, RobinHood is apparently 40% funded via Citadel LLC which owns Melvin Capital AND that Melvin took another short position minutes before the ban on buying new stock.
Yesterday showed that there are clearly powerful forces at work. Wall St are making big moves to stop this from happening. The entire trading app platform RobinHood has basically been thrown under the bus and plenty of other fairly indiscreet / legally dubious moves have been made in an effort to stop the run on GME. To me this seems like Wall St are scared.
I still think the gains so far have been the hype rather than any short squeeze - particularly if we believe the rumours that Melvin and others are doubling down on shorts. I think the stock is going up without any other intervention (foul or fair). But what do I know?
* Not incidentally.
How many others have set stop losses?
WSB are advocating against this, since RobinHood and others sell information about where stop losses are placed to the bigger companies. Apparently this is how RH et al make their money on 'commission free' trades. If you're not paying, you're the product etc.
I.e. if a firm knows that a massive selloff will occur at a certain price ($1000, $420.69 (!)) then they can manipulate the market a bit to engineer a crash. It's all very shady.
As I've said before I can't help feel that WSB are going to end up footing the bill here. They shouldn't, if this is allowed to play out naturally, but there are some big dongs now involved.
This is where the internet detectives come in.
I do think a lot of it is conspiracy theory madness, the deep state flexing its muscles.
The whole thing was never going to end well and whatever happens loads of people will get burnt and rather than admit there were just idiots jumping an a bandwagon they didn't understand, it's easier to point to 'The Man' and say he shafted me.
That stoploss talk is nonsense
That's "Frontrunning" defo not allowed
But if you've reddit, it must be true
WSB are advocating against this, since RobinHood and others sell information about where stop losses are placed to the bigger companies. Apparently this is how RH et al make their money on ‘commission free’ trades. If you’re not paying, you’re the product etc.
Engage brain before opening mouth.
My nephew is still holding apparently. I hope he knows what he's doing.
The whole thing was never going to end well and whatever happens loads of people will get burnt and rather than admit there were just idiots jumping an a bandwagon they didn’t understand, it’s easier to point to ‘The Man’ and say he shafted me.
FF, you're completely missing the point here. If the hordes get squished in a fair fight then fine, it's their own tough shit. But this isn't a fair fight. The establishment has realised they've ****ed up and gave changed the rules, so they win anyway. That is out of order, completely.
And for you to join in the bullshit calls that it's all to protect the stupid little people for they know not what they do, is just pathetic.
WSB are advocating against this, since RobinHood and others sell information about where stop losses are placed to the bigger companies. Apparently this is how RH et al make their money on ‘commission free’ trades. If you’re not paying, you’re the product etc.
They make money on each trade you make by charging a small percentage fee.
They are not part of the 'deep state' shafting the little man.
The little man is quite capable of shafting himself paying 100s of times over the odds to buy shares in a crap company no one wants to own.
FF, you’re completely missing the point here. If the hordes get squished in a fair fight then fine, it’s their own tough shit. But this isn’t a fair fight. The establishment has realised they’ve **** up and gave changed the rules, so they win anyway. That is out of order, completely.
And for you to join in the bullshit calls that it’s all to protect the stupid little people for they know not what they do, is just pathetic.
Well we'll have to agree to disagree here I'm afraid.
I just see a lot of people jumping on a get rick quick bandwagon buying stock in a crap company for 100s times over the odds. That, to me, is collective madness. The fact the market (who run the platforms which enable all this) want to stop this madness, is absolutely fine by me. Their market, their rules. I'd be very suprised if anything illegal has happened, markets trade trillions, are heavily regulated and have teams of lawyers checking everything. This is just an annoyance, not 'the kids' taking down 'the man' and putting civilisation at stake.
If that makes me part of the 'deep state', so be it.