GameStop GME and WSB saga

[bigbadwolf]

If anything, I think this is a unique opportunity for more people to learn about complex financial products like options, hedging, shorting, margin, etc.

With regard to gold and silver, these ideas apply to the paper market. And not of course the physical market. Hardcore committed investors in gold and silver are insisting on physical possession and physical delivery. It's the paper market that's responsible for the manipulation of the price -- specifically selling naked shorts and then settling in cash (rather than physical delivery).

 

[Calebd]

Has anyone followed the event relating to GME the last few weeks? Or better yet, participated in (and gaining from)?
It's very interesting time for sure.
You certainly can't model it.

It will be up to SEC to decide but from what I've seen so far, it's hard to say anything done illegally. A bunch of millennials, Robinhood retail traders decide to buy up a stock that is being shorted by many sophisticated big money funds. As a result, many of those shorts took a loss of several billions this year alone and closed out their positions.
There is no inside info involved, just a resolve by many young people to give a finger to the system and the game. I think many of the retail traders are not taking a quick profit but keep buying to prove a point. And they use call options to inflict the most damage (when you buy call options, the brokers have to buy the underlying stocks to cover the call, hence making the stock price higher). The irony that Wall Street calling Main Street investors unsophisticated.

I agree. There isn't any market manipulation by WSB either because they weren't providing any misleading information. They really were flexing the potential of organized retail trader agendas which I believe will lead to more modern valuation models taking behavioral finance theories into account and making such theories quantifiable. This was more of a symbolic stand against hedge funds and not dividing their wealth responsibly amongst the rest of society.

I don't think you can be upset at any party involved though. Large funds were playing it right with their short positions, and there is fundamental value to shorting stocks. Protecting pump and dump strategies, over overvalued markets, and keeping an efficient market etc. You also can't blame this category of techies for having this sentiment towards hedge funds and large investment institutions because of how they've affected their lives in the past. I also don't think you can blame Robinhood whether they had a liquidity issue or not because there could've been other major effects outside of immediate consequences for these funds.

 

[IntoDarkness]

wow seems that this reddit thingy is losing steam. my otm calls becoming worthless so fast

 

[Andy Nguyen]

What are your expiration on those calls?

 

[Davidfitz]

I wonder if Robinhood will be fined for making all of their clients make margin accounts by default. If Robinhood didn't find that 3 bill in funding their clients might have had a rude awakening when they discovered they were creditors and didnt own their shares/options

 

[noether-skolem]

https://twitter.com/x/status/1357072821059518467

I'm curious what they're going to say (let's hope it's not just a bait and they release something entirely unrelated lol).

Bloomberg - Are you a robot?

Also this might be interesting. I don't think what he does on reddit (sharing his positions) would be considered market manipulation, but it seems like he might run into trouble with his (ex?) employer since he never informed them of his "activities" online.

 

[Andy Nguyen]

Hinderburg Research, the one that brought down Nikola and its CEO. This should be interesting.

 

[noether-skolem]

Hinderburg Research, the one that brought down Nikola and its CEO. This should be interesting.

But gravity is clean and renewable energy!

 

[Andy Nguyen]

Yeah, the truck that rolls downhill "in motion".

 

[JonahLiu]

obviously, it's not the wsbs and robinhood traders who pumped up the GME price because most of the gains (and loss) happened during the pre and after session, where retails investors have very limited accessibility whatsoever.

 

[Andy Nguyen]

This is true. Retail traders may drive the revolution but there are big players playing both sides of the trade and it's safe to say the biggest win/loss are taken by the biggest players.
WSJ has an article about a hedge fund that won 700M on the GME alone.

WSJ News Exclusive | This Hedge Fund Made $700 Million on GameStop

Individual investors weren’t the only ones to make a lot of money on GameStop’s rally.

www.wsj.com

 

[Calebd]

Hinderburg Research, the one that brought down Nikola and its CEO. This should be interesting.

Could you elaborate? Any thoughts on what their report will reveal ha?

 

[jeffsnguyen]

reddit bros getting hosed.

 

[Calebd]

reddit bros getting hosed.

Saw it coming. Respect the will power but not winning this fight. Hope it doesn't turn off the inflowing retail investors