stock market was up today...

#11,576
#11,576
TheColdVolTruth said:
I posted this in another thread as a crude example of how a ticker could see a short position over 100%.

This can be accomplished with a relatively small amount of shares in theory. If hedge fund A takes a 5% short position in a company, they sell those shares on the open market. Hedge fund B could then take an identical 5% short position with, in theory, the same shares that were shorted and sold by A. B then sells the same shares at market price. If this is done 25 times, you end up with a company having 125% of their shares being shorted when only 5% of their shares changed hands. This is an exaggerated example, but it shows how GME could see a short position of 138%.
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Sorry, not following.

I assumed 138% meant that at that specific moment in time there were 38% more shares being shorted than actually exist.

I’m completely ignorant of the stock market, so your explanation may be accurate but I didn’t understand the “if this is done 25 times” bit - I get that 5% x 25 = 125%, but if A and B are selling wouldn’t that eliminate the short position?
 
#11,577
#11,577
Rasputin_Vol said:
Okay, now that you are clear on the facts, understand this: The market ran out of liquidity today, or was threatening to get close enough that they killed it. What does that mean? It means they ran out of shares and/or capital. They wouldn't let you buy new shares because we were burning through all the shares on the market.

I saw an unsubstantiated post from a user (u/zshub) who said a market sell order executed at $2600 for him. Also, someone else for over $5,000 per share. Do you get the severity of the situation, if that's true? It means the buying was getting to the point where it was just about to put INFINITE pressure on the price of the shares. It means virtually any ask was getting bid.

How do you get infinite upwards pressure? A gamma squeeze triggering the mother of all short squeezes, just like we predicted. The call writers need shares to hedge. Retail is still buying more. The short sellers need over 100% of the float back. Add these together. There were more shares needed than existed on the open market. That's what a liquidity crisis is.
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who in their right mind would use a market order in this particular game? That's just stupid.
 
#11,578
#11,578
red butler said:
One could hope, but I'm skeptical. If these autists crash the market there's going to be a massive media campaign against them about how grandma won't be able to retire because these degenerates used dirty tricks to manipulate the market. The headline will be something like Gaming Losers Exploit Stock Market Loopholes to Rob Boomers of Their Well Earned Retirement.
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Could be a big opportunity for a red pill - especially when you see the media take sides.
 
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#11,581
#11,581
NorthDallas40 said:
Melvin is indeed already gone. Citadel is stepping up to the plate. Not sure yet who is in the batters circle.

But... the fault lies squarely on these idiots. They made a piss poor bet and their actions directly affected the liquidity situation. If anything comes of this there should never be more transactions in play than there are shares available. That seems fairly apparent doesn’t it ?
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There be some seriously pizzed off wealthy people right now....
 
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#11,584
#11,584
ajvol01 said:
Sorry, not following.

I assumed 138% meant that at that specific moment in time there were 38% more shares being shorted than actually exist.

I’m completely ignorant of the stock market, so your explanation may be accurate but I didn’t understand the “if this is done 25 times” bit - I get that 5% x 25 = 125%, but if A and B are selling wouldn’t that eliminate the short position?
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The short contract with A is open until A covers it (buys back the share to close the contract). If B takes a short position while A's position is still open, then you now have a company with a total 10% short position, but only 5% of the shares moved. If C, D, E, F, and so on continue to short, the total short position can grow while only a limited number of shares moved. If they get squeezed, they all start to scramble to purchase from the limited pool of shares to cover their own respective contracts which drives the price even higher.
 
#11,587
#11,587
TheColdVolTruth said:
The short contract with A is open until A covers it (buys back the share to close the contract). If B takes a short position while A's position is still open, then you now have a company with a total 10% short position, but only 5% of the shares moved. If C, D, E, F, and so on continue to short, the total short position can grow while only a limited number of shares moved. If they get squeezed, they all start to scramble to purchase from the limited pool of shares to cover their own respective contracts which drives the price even higher.
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Ok thanks for the follow up.

Seems like they should have controls in place to prevent shorts that exceed available shares.
 
#11,588
#11,588
mr.checkerboards said:
I got burnt on one with doge coin last night, set a limit order and it sold when RH crashed. It was still a decent bit away from it as well
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I use stop limit orders. But if a stock crashes, that doesn't really help either. But a straight out market order on GME is the definition of crazy... or naivete. They just don't know what they are doing. They fixin to learn though.
 
#11,591
#11,591
DancingOutlaw said:
He's posted his account, he's already cashed out $13M. The rest is still in a main position and one set of options. Guy is 34 years old.
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Good for him. Too bad Biden will take 60% of it in taxes, but still a pretty good haul. I love how lottery winners brag about their good fortune though. Like they have actually done something unique and worthy of admiration.
 
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#11,592
#11,592
LouderVol said:
Once they officially got attention it was over. Drawing attention to this is the worst thing the hedge funds could have done if they wanted to avoid this in the future.
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It's actually nice because it's showing a symmetrical market in action. Those currently in excessive short float stocks will cut bait to avoid being the next victim and others will know an army of apes is watching their every move.
 
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#11,593
#11,593
SpaceCoastVol said:
Good for him. Too bad Biden will take 60% of it in taxes, but still a pretty good haul. I love how lottery winners brag about their good fortune though. Like they have actually done something unique and worthy of admiration.
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It takes a lot of guts and cunning to play meemaw's birthday and all your cousins' ages for 19 years.
 
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#11,594
#11,594
SpaceCoastVol said:
I use stop limit orders. But if a stock crashes, that doesn't really help either. But a straight out market order on GME is the definition of crazy... or naivete. They just don't know what they are doing. They fixin to learn though.
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A fair number of the redditors is in it just to burn the billionaires. They got in for hundreds, that's all they will lose in the end. They dont care about stock value, their skin in the game is only a couple hundred deep.
 
#11,595
#11,595
SpaceCoastVol said:
Good for him. Too bad Biden will take 60% of it in taxes, but still a pretty good haul. I love how lottery winners brag about their good fortune though. Like they have actually done something unique and worthy of admiration.
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They will take all of it and more IMO. He’ll be spending far more on lawyers trying to stay out of federal prison.
 
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#11,596
#11,596
DancingOutlaw said:
It's actually nice because it's showing a symmetrical market in action. Those currently in excessive short float stocks will cut bait to avoid being the next victim and others will know an army of apes is watching their every move.
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Agreed. I am all for it. And I think plenty of the apes are prepared for the relatively small hits they will take.
 
#11,597
#11,597
DancingOutlaw said:
It takes a lot of guts and cunning to play meemaw's birthday and all your cousins' ages for 19 years.
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tumblr_ozjcg0IaSK1qbwtexo7_r1_400.gifv
 
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#11,599
#11,599
VolnJC said:
Okay totally dumb question could Gamestop take all this new found capital and use it to takeover like Walmart? lol
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If nothing else it will delay their bankruptcy filing. And no. Walmart’s market cap is $400B. GME’s is $22B and only a fraction of the shares are held as treasury stock. They’ll be able to raise a billion +/- cash.
 
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#11,600
#11,600
VolnJC said:
Okay totally dumb question could Gamestop take all this new found capital and use it to takeover like Walmart? lol
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Short answer, idk. I guess they could if that capital had been made available to them. If I’m CEO of a rapidly dying business under this scenario and that much capital rolls in, I’m cashing that check and closing the doors. Fiji baby!
 
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