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TruthSeeker

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Think this answers your question. (worth 2 minutes of everyone's time, or 10 if you had to re-read it 5 times like I did)


Short selling How Long does a Short Seller have before covering:
.

Margin calls:
.


Will be interesting to see what happens tomorrow, not sure how many shorts are left out there. Robinhood and the others that shut down trading may have given the shorts enough time to cover their shorts and avoid even larger losses. Melvin capital and Citron both claimed they were out of their positions yesterday, published all over Bloomberg and the like. (Not sure what to believe)
If they didn't, then they committed more fraud on top of what's happened today.
 

fan of Ray Williams

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Think this answers your question. (worth 2 minutes of everyone's time, or 10 if you had to re-read it 5 times like I did)


Short selling How Long does a Short Seller have before covering:
.

Margin calls:
.


Will be interesting to see what happens tomorrow, not sure how many shorts are left out there. Robinhood and the others that shut down trading may have given the shorts enough time to cover their shorts and avoid even larger losses. Melvin capital and Citron both claimed they were out of their positions yesterday, published all over Bloomberg and the like. (Not sure what to believe)
Now they are messing with dogecoin, as I mentioned earlier in the thread. Screwing around, I put 35 dollars in it at around 7:15 Up 84%
 

TruthSeeker

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They're afraid the market might have collapsed today due to a liquidity problem. In other words, the losses were potentially so bad that the entire market would go down. Not one broker. THE ENTIRE STOCK MARKET!

This potential gamma squeeze could change everything.

 

Spoofin

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Are the hedge funds smarter though? They’re smart because they fleece their investors by taking a 2% management fee and 20% of profits. Their investors don’t do nearly as well.
Are their investors forced to use their hedge fund? I don’t care if they take 99% of the profits if they are upfront with it and people choose to go with them of their own free will.
 

Spoofin

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Spoof loves when the little guy gets bent over.
No surprise there...
I thought the little guy was sticking it to the big boys here?

My post was about hedge funds and your your post shows what a tool you are. Spoof has no issue when people make money doing legal things. Spoof doesn’t like illegal activity. Spoof is a little guy. End of story.
 

Section2

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Are the hedge funds smarter though? They’re smart because they fleece their investors by taking a 2% management fee and 20% of profits. Their investors don’t do nearly as well.
Really?
 

BarnBurner

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I thought the little guy was sticking it to the big boys here?

My post was about hedge funds and your your post shows what a tool you are. Spoof has no issue when people make money doing legal things. Spoof doesn’t like illegal activity. Spoof is a little guy. End of story.
WALLACE!!!!!! 😂😂😂😂😂😂🤣🤣🤣🤣🤣🤣🤣

Wallace has no clue.
 

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Listening to MPR this morning: it sounds like things are not at all as some posters here would have you believe, with regards to the outrage over Robinhood shutting down buying yesterday.

First of all, people were using Robinhood to buy options. That's not the same thing as just buying the stock. Options don't cost the brokerage zero. They're complex. The exchange's clearinghouse won't allow the deal to go through unless it's sufficiently backed with money (something like that). And so many people were trying to make options deals via Robinhood (and others) that the clearinghouse started demanding that they back them with more money. Robinhood ran out of money to do that. So no more deals could happen.

That seems to be the truth of it. Nothing nefarious.


Maybe you believe that's a conspiracy and lie. That is your prerogative.


If you're interested in a more technical review of what is actually happening right now, called a "gamma squeeze", this is an excellent article: https://www.fool.com/investing/2021/01/28/what-is-a-gamma-squeeze/
 

atsgopher

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Technically, yes. If I had a share of Tesla....I could set a sell limit at $5,000. It wouldn't get filled, but I could do it.
Plus, market makers use this information for manipulation (can be positive or negative), albeit, not in the extremes presented.
 

MplsGopher

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She believes you don't change the rules midstream.
Robinhood ran out of money and the exchange clearinghouse stopped taking their options deals. See post #194.

I'm certain that a hearing will be held, and this is what will come out. It makes sense.

These weren't people trying to buy stock of a company. They were trying to use (abuse) options to force a gamma squeeze.
 

atsgopher

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Why not??? Who gets to control things and make those rules, to such an oppressive extent??

#RIGGED
it's more complicated. There are market makers. These people keep the stock liquid and basically try to balance it out. Caveat, that answer is oversimplified.
 

Wally

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These weren't people trying to buy stock of a company. They were trying to use (abuse) options to force a gamma squeeze.
I read they stopped straight up retail buying with cash. Options is one thing but there is no excuse for them stopping someone with liquid cash in their account from buying the stock.
 

MplsGopher

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I read they stopped straight up retail buying with cash. Options is one thing but there is no excuse for them stopping someone with liquid cash in their account from buying the stock.
That's a fair point. I don't know the detail of what was stopped.

If the issue was just the clearinghouse stopping options, then I don't know why simple stock purchases were stopped.
 

atsgopher

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I'm with Dave on this one:

Except they didn't change rules.

He is right in that they limit people playing the game that basically can't. It is designed to protect the niave (not making judgements here, just explaining the logic).
 

atsgopher

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So again my question.

Why can't LesBolstad and myself get together with the following scheme:

Les will list his Tesla stock at 1 share for $5k, and I'll buy that share. Boom -- the price for Tesla stock is now $5k per share.

Right? Where did we go wrong?
The last price paid is $5k. That's it. now, find the next sucker. You might be the last sucker.

it is also generally illegal to attempt to manipulate stock price. Both securities laws and anti trust laws might come in to play. I'd have to think about as I'm a little rusty.
 

MplsGopher

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The last price paid is $5k. That's it. now, find the next sucker. You might be the last sucker.

it is also generally illegal to attempt to manipulate stock price. Both securities laws and anti trust laws might come in to play. I'd have to think about as I'm a little rusty.
Thanks. The post was driven by my misunderstading (clearly) of how the stock price works.

I was thinking it was like mutual funds (which is my only experience with investments) where you just take the price that it is. So was thinking like, if you could set the price at $5k then that "sets the price" for everyone else and that's the price they have to pay, or something. Clearly that's not at all how it is though, and each buyer and seller can name their own prices.
 

stocker08

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Robinhood ran out of money and the exchange clearinghouse stopped taking their options deals. See post #194.

I'm certain that a hearing will be held, and this is what will come out. It makes sense.

These weren't people trying to buy stock of a company. They were trying to use (abuse) options to force a gamma squeeze.
I'm almost positive that this wasn't the case. They put buying on hold for EVERYONE. Big difference between that and disallowing these stocks to be bought on margin (loaned money from the brokers).

I believe that ALL or at least MOST brokers have done the same now.
 

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Except they didn't change rules.

He is right in that they limit people playing the game that basically can't. It is designed to protect the niave (not making judgements here, just explaining the logic).
Stopping cash buyers is ok?
 

MplsGopher

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I'm almost positive that this wasn't the case. They put buying on hold for EVERYONE. Big difference between that and disallowing these stocks to be bought on margin (loaned money from the brokers).

I believe that ALL or at least MOST brokers have done the same now.
Could the clearinghouse simply have said "until you get more cash, no buys of this stock from you, sorry"?
 
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