Gamestop?

[Running_Man]

Yes, the hedge funds are losing big at this point.

When the company market cap goes from 22-33 billion back down to 1 billion, who will be losing the big money? Who are the shareholders right now at the top?

Supposedly, the hedge funds only buy enough to cover their short. They would not be long at this point. Of course, if the company stock stays at this ridiculous price (does anyone want to bet on that?) , then the hedge funds are the only losers.

My point is that little guys ganging up to beat down big guys is not a sure win for every participant either. Late comers or wannabes will always get hurt. In dollar amounts, they will lose less, but that's because their bets are smaller.


PS. I don't think there should be any rules to help hedge funds. They win sometimes, and lose big some other times. That's the game that they choose to play.

There is a small percentage of the stock that is the float, the HEDGE FUNDS have borrowed shares from long term holders that have not sold, when the stock falls back to the old price the long term holders will be back where they were when they get their shares back. Of the 80 million people trading shares a fraction will lose some money when the stock surely collapses, but at this point the 92 billion that hedge funds have lost is absorbed by long term stock holders that lent their shares out, that is how this works.

 

[NW-Bound]

Not having anything to do with these silly stocks and the game that people play, I am still down -$168K today. That's my highest daily loss ever. Without looking up my diary, I think my record to date is only around -$100K.

That high loss includes a lot of put options that went bananas, and there's a lot of time values in them that will wash out if the market just stays at this level and does not go down further. However, I always mark to market my portfolio each day.

 

[Running_Man]

Also by the way, many hedge funds have sold naked calls as part of a long/short play against many of these names. The Reddit crowd came up with the idea of buying the calls and the stock which forces the naked call seller to buy the stock to cover their position as the calls rise adding to the rise. They will also lose then when the stock falls back.

A short seller may be short the stock and trying to earn money by selling out of the money calls for an "easy" gain. This was brilliantly deduced by the Reddit crowd to force these hedge fund plays to be massively exploitable. They find a limited supply of an item and force hedge funds trying to exploit a small difference for a gain from average traders into massive losses. These trades are coming about as a result of the trading lessons learned in BitCoin and Tesla.

The solution of course is simple, ban naked call selling and short selling above a % of the float. But Hedge funds have made a lot of money over the years exploiting this.

 

[NW-Bound]

There is a small percentage of the stock that is the float, the HEDGE FUNDS have borrowed shares from long term holders that have not sold, when the stock falls back to the old price the long term holders will be back where they were when they get their shares back. Of the 80 million people trading shares a fraction will lose some money when the stock surely collapses, but at this point the 92 billion that hedge funds have lost is absorbed by long term stock holders that lent their shares out, that is how this works.

If hedge funds shorted more than the number of floating shares, then they are not that bright and get what was coming. I never have sympathy for either side of this trade. Again, it's a game they choose to play.

 

[bobandsherry]

Also by the way, many hedge funds have sold naked calls as part of a long/short play against many of these names. The Reddit crowd came up with the idea of buying the calls and the stock which forces the naked call seller to buy the stock to cover their position as the calls rise adding to the rise. They will also lose then when the stock falls back.

A short seller may be short the stock and trying to earn money by selling out of the money calls for an "easy" gain. This was brilliantly deduced by the Reddit crowd to force these hedge fund plays to be massively exploitable. They find a limited supply of an item and force hedge funds trying to exploit a small difference for a gain from average traders into massive losses. These trades are coming about as a result of the trading lessons learned in BitCoin and Tesla.

The solution of course is simple, ban naked call selling and short selling above a % of the float. But Hedge funds have made a lot of money over the years exploiting this.

Gotta love it, hedge funds have driven down prices for years and forced small holders to suck a loss. Nice to see the table turned.

 

[jim584672]

Also by the way, many hedge funds have sold naked calls as part of a long/short play against many of these names. The Reddit crowd came up with the idea of buying the calls and the stock which forces the naked call seller to buy the stock to cover their position as the calls rise adding to the rise. They will also lose then when the stock falls back.

A short seller may be short the stock and trying to earn money by selling out of the money calls for an "easy" gain. This was brilliantly deduced by the Reddit crowd to force these hedge fund plays to be massively exploitable. They find a limited supply of an item and force hedge funds trying to exploit a small difference for a gain from average traders into massive losses. These trades are coming about as a result of the trading lessons learned in BitCoin and Tesla.

The solution of course is simple, ban naked call selling and short selling above a % of the float. But Hedge funds have made a lot of money over the years exploiting this.

This sounds like the Reddit know nothings came up with this theory.

Short seller (bet stock goes down)
Naked call writer (bet stock goes down in a set time frame)

Why would someone need to do this as a strategy, they wouldn't. This isn't a hedge, it is a double bet.

I don't see what is exploitable, other than the position moves against you (goes up) and forces a closeout buyback, sending the stock higher. This is a simple short squeeze strategy. Buy a ton and hope the weak handed shorts are forced to liquidate and buy.

I'm guessing the hedge funds have very good reasons to massively short a stock, nothing wrong with that. Remember a bankrupt stock goes to zero, or pennies in a Reorg. This whole us vs. them in some grand battle against the "little guy" is theater and absurd.

 

[Running_Man]

This sounds like the Reddit know nothings came up with this theory.

Short seller (bet stock goes down)
Naked call writer (bet stock goes down in a set time frame)

Why would someone need to do this as a strategy, they wouldn't. This isn't a hedge, it is a double bet.

I don't see what is exploitable, other than the position moves against you (goes up) and forces a closeout buyback, sending the stock higher. This is a simple short squeeze strategy. Buy a ton and hope the weak handed shorts are forced to liquidate and buy.

I'm guessing the hedge funds have very good reasons to massively short a stock, nothing wrong with that. Remember a bankrupt stock goes to zero, or pennies in a Reorg. This whole us vs. them in some grand battle against the "little guy" is theater and absurd.

I think you do not understand the mechanics that Hedge funds go through to manipulate money for pennies on the dollar. Hedge funds typically are trying to go neutral, they will buy some stocks and sell others, each hedge fund has their own strategy.

A Hedge fund can be short a stock and manage it by selling calls and/or shorting stock outright or frequently a combination of both depending on what they feel the gamma and delta are worth. If they can't find shares to short they sell calls, simple as that .

Usually when the sell the call they manage the risk by also buying a portion of the call option stock to offset the move so that a rise in the price of the call move is offset by a rise in the stock, and as the price of the stock increases raising call value that they buy, they need to buy more stock. If their overall position is a short they will have some calls and some short and the hedge fund traders manage those positions. The quick rises in the stocks totally screws over the hedge funds gamma and delta positions relative to the net position they want on a single stock. And it forces them to quickly buy stock to cover the call position that they cannot then get out of until they cover the call and sell the stock. But any hedge fund that is using calls as a part of a short position once it is forced to totally cover the short can no longer maintain their hedge due to the short of the stock itself.

If you look at the chart I posted earlier what is happening to long-short hedge funds is the longs they are most owning are falling very fast and their shorts are rising exponentially, resulting in disaster for the hedge funds.

 

[Jerry1]

Hedge funds typically are trying to go neutral,

Yeah, except for the astronomical income the managers make.

Sorry, my very uneducated (in this field) opinion is that the chickens got one over on the fox. Sucks to be them. It does seem though that the chickens will also have their day of reckoning. Many of those shares were bought at way over valued prices. Seems like a bit of a Ponzi scheme where the first ones out are going to be the only ones who get out with their shirts still on their back.

It will be interesting to watch.

 

[jim584672]

I think you do not understand the mechanics that Hedge funds go through to manipulate money for pennies on the dollar. Hedge funds typically are trying to go neutral, they will buy some stocks and sell others, each hedge fund has their own strategy.

A Hedge fund can be short a stock and manage it by selling calls and/or shorting stock outright or frequently a combination of both depending on what they feel the gamma and delta are worth. If they can't find shares to short they sell calls, simple as that .

Usually when the sell the call they manage the risk by also buying a portion of the call option stock to offset the move so that a rise in the price of the call move is offset by a rise in the stock, and as the price of the stock increases raising call value that they buy, they need to buy more stock. If their overall position is a short they will have some calls and some short and the hedge fund traders manage those positions. The quick rises in the stocks totally screws over the hedge funds gamma and delta positions relative to the net position they want on a single stock. And it forces them to quickly buy stock to cover the call position that they cannot then get out of until they cover the call and sell the stock. But any hedge fund that is using calls as a part of a short position once it is forced to totally cover the short can no longer maintain their hedge due to the short of the stock itself.

If you look at the chart I posted earlier what is happening to long-short hedge funds is the longs they are most owning are falling very fast and their shorts are rising exponentially, resulting in disaster for the hedge funds.

So what. You can do the same thing. Each side will try to "manipulate" the price. That is the game, no side is "right". They are not inherently bad because they are larger players. WSB is openly trying to "manipulate" the price, they are not angels. Game on, all is fair.

 

[MuirWannabe]

Except if I understand correctly, which I’m not certain I do, the big boy hedge funds are getting squeezed so hard they are selling their long positions in such amounts as to hurt the overall market. And us indexers are taking a hit in the process.

It’s all fun and games from the sidelines. Go team go. But wait a minute. Now my portfolio is going down. I’m not laughing anymore. Today hurt quite a bit.

If that understanding is correct, I’d like this to end please.

 

[Winemaker]

I bought some Tanger Outlets SKT a few months back about $8, after they cut/stopped the divvy. Several hundred shares. Early January, the reinstated divvy. Sold my shares yesterday $16.65 as SKT goes ex dividend, 1/28/21. They went to $20.80 today to cover the 45% shorts. What a ride!

 

[jim584672]

Except if I understand correctly, which I’m not certain I do, the big boy hedge funds are getting squeezed so hard they are selling their long positions in such amounts as to hurt the overall market. And us indexers are taking a hit in the process.

It’s all fun and games from the sidelines. Go team go. But wait a minute. Now my portfolio is going down. I’m not laughing anymore. Today hurt quite a bit.

If that understanding is correct, I’d like this to end please.

You don't have any say on whether a fund wants to sell a position or not to meet a margin call. Also a few WSB stocks in a short squeeze are not going to move the entire market to a substantial degree. Your index fund was probably helped by these rocket stocks.

 

[W2R]

Except if I understand correctly, which I’m not certain I do, the big boy hedge funds are getting squeezed so hard they are selling their long positions in such amounts as to hurt the overall market. And us indexers are taking a hit in the process.

It’s all fun and games from the sidelines. Go team go. But wait a minute. Now my portfolio is going down. I’m not laughing anymore. Today hurt quite a bit.

If that understanding is correct, I’d like this to end please.

It will end. Not sure when! Meanwhile I figure that as long as I don't sell, I haven't locked in any losses.

 

[P.S.]

It’s all fun and games from the sidelines. Go team go. But wait a minute. Now my portfolio is going down. I’m not laughing anymore. Today hurt quite a bit.

If that understanding is correct, I’d like this to end please.

This will be my only post, promise.
Yes, although there are big players like deepf^ckingvalue, much of the army of wsb-ers are small accounts putting their entire savings towards this GME movement, sometimes just hundreds of dollars.
It is not fun. It is not games.
It’s the small fry, the guy that this economy has left behind taking a stand.
When many on the ER community were slapping each other on the back about their ever glorious higher balances, these guys were figuring how to pay their bills. Many of them lost jobs. They lived through 2008 and saw their parents lose jobs, houses. They would prob love to exchange their student loans, medical bills, etc. for the few percent “loss” that the average ER member experienced today. And when your balances do go up? That money didn’t come from a vacuum.
There is a lot of due diligence amongst the many threads on WSB re: GME. To understand that and buy GME is as much gambling, as buying VTI or VWELX is.
Who of you analyzes all the companies in each fund you buy?

 

[jim584672]

This will be my only post, promise.
Yes, although there are big players like deepf^ckingvalue, much of the army of wsb-ers are small accounts putting their entire savings towards this GME movement, sometimes just hundreds of dollars.
It is not fun. It is not games.
It’s the small fry, the guy that this economy has left behind taking a stand.
When many on the ER community were slapping each other on the back about their ever glorious higher balances, these guys were figuring how to pay their bills. Many of them lost jobs. They lived through 2008 and saw their parents lose jobs, houses. They would prob love to exchange their student loans, medical bills, etc. for the few percent “loss” that the average ER member experienced today. And when your balances do go up? That money didn’t come from a vacuum.
There is a lot of due diligence amongst the many threads on WSB re: GME. To understand that and buy GME is as much gambling, as buying VTI or VWELX is.
Who of you analyzes all the companies in each fund you buy?

Give it a rest, "taking a stand", come on. Nice fantasy.

 

[NW-Bound]

I read about the video posted today (Jan 27) by Andrew Left of Citron Reseach, where he capitulated and said he covered all his short of Gamestop in the 90, and had moved on. So, what drove the stock up to $347/share where it is now? Are there other shorts?

I found the video on Youtube. He was quite graceful about his loss, and just shrugged it off.

PS. Melvin Capital also said to have closed out its short position on Gamestop.

 

[Running_Man]

Give it a rest, "taking a stand", come on. Nice fantasy.

You truly do not understand what is going on. And this has got the highest levels of stock governance extraordinarily worried because this becomes self-funding. And you have one of the wealthiest people on the planet cheerleading this on.

 

[Montecfo]

Says who?

https://www.reddit.com/r/wallstreetbets/

Was widely reported...but brief

 

[Montecfo]

I bought some Tanger Outlets SKT a few months back about $8, after they cut/stopped the divvy. Several hundred shares. Early January, the reinstated divvy. Sold my shares yesterday $16.65 as SKT goes ex dividend, 1/28/21. They went to $20.80 today to cover the 45% shorts. What a ride!

Yes that was on the top 10 list most shorted stocks.

 

[tulak]

It will end. Not sure when! Meanwhile I figure that as long as I don't sell, I haven't locked in any losses.

+1

Short term volatility is expected when investing in stocks. This will pass. If people are concerned about day to day movements of their investments, then they’re not looking at them as long term investments.

In the meantime, this has been great entertainment.

 

[NW-Bound]

I am not worried, but pay particular attention during events like this because I heed the following advice:

"In the midst of chaos there is also opportunity" - Sun Tzu (544-496BC)

 

[tulak]

Yep, volatility can be great. I speculate on the low end, but made enough for some XO cognac. Can’t complain about that!

 

[Sunset]

I imagine all the happy original GME shareholders love this.

 

[NW-Bound]

I imagine all the happy original GME shareholders love this.

Only if they sell now. That crazy price is not going to last. It will go down just as fast, or even faster than it went up.

 

[NW-Bound]

Yep, volatility can be great. I speculate on the low end, but made enough for some XO cognac. Can’t complain about that!

If I make anything more than a guy who sits on his hands and does nothing, I consider it a success.

If I lose money compared to a do-nothing guy, well, then it's obviously not good.