OK, I have no clue what you're talking about...
WSB vs Wall Street / Gamestop Stock and others blown up by Subreddit
- Thread starter Kasper
- Start date
OK, I have no clue what you're talking about...
Obviously not the scale that was in 2008 as this just had the effect of 2 points in the dow jones on wednesday and Friday, as you said some billions lost by a hedge fund (and others winning going long) and few memes. but is just the same concept. When they win billions because of a dominant position, everything is fine. Then they get greedy, they stretch it till the rope breaks and now it starts the crying and insinuations to bail them up. Yes, the repercussions are not the same, but the concept is the same on this capitalist mentality with no accountability for this assholes
2008 was a fundamental break down all the way from households taking loans they couldn't afford to banks trading books they didn't understand the contents of. Totally different.
I have also always had a problem with the way blame was apportioned in 2008. Governments were all too happy to push the risk taking when it was netting them $250bn a year (in the UK alone).
What's the dude with a caps name on YT?
There are always a couple bootlickers in here defending the parasites that do nothing for society but line their own pockets and expect the taxpayers to bail them out if things go bad.
About this specific instance? No.
About investing generally and making money on the stock market? Yes. Forget individual stocks even exist, don't buy any books, don't listen to anyone talking about analysis. Buy index funds with the lowest fees (0.3 % should be absolute max), everything else is pure gambling. If you want to gamble then go for it, I'm sure it's fun, but if you want to invest then don't.
Just came to say feck Wall Street and feck all the slimeballs and greedy bitches in the "democratic" two-party system. When it comes to money and power, there are no values or ideologies.
Roaring Kitty / DeepF***ingValue - he didn't start it per se but did get in early and has tracked his progress publicly since.
I hadn't really pieced this together in my past visits to WSB, probably because I was too busy just enjoying a laugh. But I read this just now on an AskReddit thread that asked financial professionals to opine on this whole situation and it made a lot of sense, particularly about what might be the profile of the WSB heavy users.
I don't remember seeing many Bloomberg Terminal screenshots, but whenever its the case that's basically a surefire way to tell someone is a finance professional and actively engaged in trading or investment decisions. The cost is USD 2,000 a month per user, so even at banks/brokers/funds you don't even get one unless you really need it to function.
I don't remember seeing many Bloomberg Terminal screenshots, but whenever its the case that's basically a surefire way to tell someone is a finance professional and actively engaged in trading or investment decisions. The cost is USD 2,000 a month per user, so even at banks/brokers/funds you don't even get one unless you really need it to function.
@Jippy I read that an asset manager was executed in China last week for corruption.
Great regulatory system IMO!
Great regulatory system IMO!
https://www.theguardian.com/busines...-their-sights-on-silver-after-gamestop-frenzy
The only posts about silver I've seen on WSB are saying it's a trap and a deliberate orchestrated distraction from GME.
The only posts about silver I've seen on WSB are saying it's a trap and a deliberate orchestrated distraction from GME.
Yep.. dont put money elsewhere.. buy and hold GME .. that's basically the message.
For those saying to hold GME stock, what's the endgame? Surely to make money out of it you'll have to sell eventually. But they can't all sell and still all make money. So what happens? What's the goal?
Some make a lot of money. Some lose a lot of money. They end up fecking up a hedge fund or two.. or more.
@MikeUpNorth , I think I read the other day that a requirement to be added to the S&P 500 is to have positive earnings, which GME didn't in its latest year.
Christ, no poxy slap on the wrist there! Proper DM reader justice.
Yeah, that's true.
Maybe it's just me but anyone who wanted to make money off of it should have gotten out last week. I think now the dust is going to start settling and the baggage holders are gonna get hurt.
Today was early enough considering that it went from 0.5 to 0.75. The problem is that when the dump happened, it became clear that there is only one way out of it. But people don't want to sell at a loss, which means that they lose even more.
The people who got in late (300+) are buggered when this collapses.
Sorry thought that I was in crypto thread. Yup, last week was the week for this.
Yep they state this on their website and Fidelity confirmed this for me when I asked them.
I am sorry but no. Being true that the borrowers of mortgages they accepted too much of a risk, it was a amssive asynchrony of information. You can't ask to have the same information on not only the housing market, the current state of the economy but mortage liquidity market. feck, I didn't even know the termsubprime. All that repackaging in toxic assets.
No, a few people knew what they were doing and bunch they were pushed by the greedy banks and lots were uneducated to see beyond the option to access to housing (a basic necessity if you ask me) when they never had that chance. And all that backed up by all the central banks that they should know better and for sure knew what was going on way before while they still allowed the last borrowers to keep inflating the bubbles.
The same here, I worked as a day trader in a short spell, but before that, I didn't know what shorting a stock meant. 95% of my friends before GME knew what that meant and several of them they invest without knowing that this option exists (among other financial products that can affect their investment. Obviously, again is not the same than 2008. If you invest in stock market you should investigate more than giggly take the bank advise but on 2008 we were talking about buying a house, that should be a right IMO (and yes, I know some they were trying to make money, but it was a minority)
I don't actually agree with this, and I would side with the CNN Anchor on the clip you linked there.
This trade works by screwing over a Hedge fund which had made a really dumb move. That's great, and I think everyone is happy there. However, it also works from increasing numbers of 'retail' investors buying into Gamestop every day, to push the price higher and higher to cost the Hedge Fund more and more to either keep their short alive, or close it as options expire.
The problem there is what happens after the hedge fund blows up? You're left with thousands (millions?) of retail investors who have bought Gamestop shares at valuations >>> $50 a share, which can't be justified at all rationally, and will eventually fall, causing billions in collective losses to anyone who bought in and didn't manage to sell at the top. And for those who did sell at the top, obviously it's other idiots who have bought from them, and will soon lose out. This will have a happy ending for some of the WSB crowd, but for the vast majority this will be an absolute tragedy. I just hope they aren't going to lose more than they can afford to.
If they buy outright it should be fine. Lost but paid in full.
If they buy on margin they'd be called and cut eventually. Problem is if there's a squeeze and they cant liquidate they're fecked.
Either way there's no free lunch. If some win big they wont stop while they're ahead they'll continue thinking they can pull the next hit. Such is the nature of men.
I worked as a trader before, but i dont trade on my own.
The best!!
I think you're ascribing a moral dimension to short-selling and I can't agree with that. The idea of betting against a company's success can be seen as an attack on the company's workers, or the regular investors, but this is a mistake imo. I think short-selling can even good for the average investor because it pushes back against bubbles and corporate malfeasance. Short-sellers, when done right are healthy for the market, and academic research is very clear on that. If we didn't have short sellers, then stock prices would potentially be too high.
Look at Wirecard as an example where short sellers uncovered the biggest corporate fraud of 2020....
this is probably true.
I think the issue here is that the blatant market manipulation by hedge funds has shown that they (and broadly speaking, the other financial/investment firms) have far, far too much power. The game is rigged, it’s just that normally the average person doesn’t see it. When you have trading being suspended (only one way though) and then constant short ladder attacks, it feels very much like one “side” of this gets to play with very different rules to the other.
short selling “done right” is probably a positive thing for the market, but how can we have any assurance that the day-to-day of these companies has - for years - simply been illegal and immoral manipulation for their own gain?
MSNBC Guest Loses It Over Reddit Outsmarting Wall Street
What exactly is the blatant manipulation by the hedge funds in your opinion? I have a view, just curious where exactly you think the market was manipulated.
So, from my thoroughly amateurish viewpoint;
Many of the apps such as Robinhood restricted (and still are restricting) the number of GME shares that can be bought. The reasons given dont really seem to hold up under scrutiny - eg. why wasnt it restricted the previous week when folk were buying? Why is it only buying, not selling, that is restricted? Why the arbitrary limits on how many shares can be owned per individual? Additionally people on WSB have posted examples of Robinhood (and others) cancelling their call options, selling their stocks without their permission, forcing stop-lossses, rejecting sell limit prices etc.
Not only is all of the above super-dodgy, but it also completely disproportionately affects the retail investors who are buying GME, rather than the Hedge Funds, who trade through other means and are largely unrestricted.
This is before you get into the conflicts of interest with Robinhood and the hedge funds, and their revenue streams, company bailouts etc.
You can argue that these are all just faults of Robinhood and not indicative of wider manipulation, but honestly I just think that is plain naive.
Anyway, whilst these restrictions are in place, you see several quite obvious examples of short-ladder attacks. I.e. hedge funds selling a few shares between each other at ever-decreasing prices, dropping the GME price down, and potentially hitting those enforced stop-losses, and generally causing panic sales. Panic sales since of course, selling isnt restricted for the retail investors, only buying - meaning that they are powerless to stop the short-ladder attack by simply buying up the shares that are being passed back and forth - they simply watch whilst the share price drops lower and lower. And of course, anyone who does panic sell during this period can have their shares happily swept up by the hedge funds to cover their original short positions (the WSB is to continue holding and buying more where possible).
It can be argued that WSB are guilty of artificially inflating the GME prices (although I think that has far more of an element of simple supply and demand. Also, I dont know the legal definition of market manipulation, but I dont consider it market manipulation for someone to say "hey, this stock has been massively shorted and the price appears to be rising, ill buy into this as the price is likely to continue to rise and i will have a guaranteed buyer later"). What cannot be argued is that the hedge funds, market makers, brokerages and apps clearly have far more power to pull the strings and manipulate markets than retail investors do, and I think that has been demonstrated over the last few [trading] days.
Not a financial advisor or a lawyer. I have held a portfolio with a few stocks and shares for many years, but never really gotten into the intricacies of options, shorts, margin trading and all that jazz. I am sure there are folk on WSB and other mediums that can explain and highlight things far better than I can.
From a personal standpoint, I mostly agree with the argument that hedge funds dont really provide any product or service or value to the economy, and exist simply to make themselves richer. It seems a very one-sided equation.
No no. I didn't meant that. I shorted in the past. What is not morally accepted IMO is shortselling 140% of the company and if it is to push the stock down on purpose, even worse. And when you use Robinhood not allowing to buy the stock but allowing to sell (and allegedly selling the position of some customers without their consent) is bordering illegal
It was a failure at all points. When you're in the weeds you can't see the big picture, that rings true for the people taking ridiculous mortgages as much as it does the guys trading the subprime books taking the contents at face value. Or the guys on derivs desks trading CDS's having no idea it was all going to blow up. None of them on their own could forsee the knock on effect it could all have. It's the job of a higher body i.e government to look at the bigger picture and regulate - but they were too busy counting the money the financial services industry was generating for them.
Its very weird that an underlying premise in this entire discussion is that it is beneficial to move prices when trading. Because I can promise it is certainly not the premise on which any execution algorithms are designed, that any brokers are evaluated in performance.
I agree 100% that it was a clusterfeck with all the actors involved, but the biggest part of the blame (by a big big chunk) was IMO with the lenders and as you said, the higher bodies, central bank and governments. Because while the borrowers were tried to have a house, the lenders were trying to get money (or at least much more than the borrowers) to a too much greedier point and they had much more information than them.
But the worse is not even that. Instead of bailing out the borrowers, they bailed out the lenders.
My initial comparison, it as not to compare equally 2008 with now, but that is a way lower scale analogy in quantities and actors and that I am afraid that in the end, they might bail out the hedge funds somehow
Robinhood came out and said they restricted trading because of their margin requirements. There is nothing unbelievable about that - they post a certain amount of collateral to cover their trading with their liquidity provider. So do you if you want to trade on margin. It wasn't restricted the previous week because the volumes their customers were doing didn't put them near their margin limits. Buying or short selling contribute to margin requirements, selling existing positions reduce them. It sounds like they got very close to hitting margin limits themselves and needed to close as many risky positions as they could.
Hedge funds understand margin and collateral far better and made sure they weren't at risk, it's as simple as that. You can't say you are a complete amateur on one side but then on the other make so many authoritative statements.
I will agree with you i don't think the world would miss hedge funds if they all disappeared tomorrow.
That's Scott Galloway, an NYU marketing professor. He writes an interesting blog "No Malice, No Mercy", somewhat of a contrarian, and can have some really bad takes. There's an inverse Galloway ETF that has outperformed the S&P 500 by 11.2x
Again, academic - paid to talk - mostly bullshit.
Reminds me of Mishkin being paid to write a favorable report on Iceland. Yeah, no bias there.
