Gamestop?

This was the latest TD Ameritrade message I got regarding many of the stocks mentioned in this thread.

TD Ameritrade Trading Restrictions on Stocks

Securities with trading restrictions

We have placed some restrictions on the following securities. These restrictions will not prevent clients from making basic buy and sell transactions. This list is as of January 29, 2021, 4:30PM ET.


  • AMC, CVM, EXPR, FOSL, GME, NOK, BB, BBBY, FIZZ, GSX, IRBT, NCMI, TR, UONE, VIR, NAK, NAKD, DDS, KOSS

The following restrictions are in place:

      • Stocks - 100% holding requirement (not marginable)
      • Long calls and puts are allowed
      • Covered call and short put orders may only be placed with a broker. Please be aware that wait times to speak with a broker may be longer than normal due to current market conditions.
        • Covered calls only allowed if your account currently has the shares
        • Short puts only if you have the maintenance/cash to cover the entire exercise amount of the short puts
      • All other complex options orders will not be accepted

Please keep in mind that this list is not inclusive of every security restriction and may change at any time.
 
The Black Rock positions in GME mean little if they don't sell before the price goes back to what is justifiable, and wouldn't we expect those positions are part of ETF's that "need" GME to track whatever index they're tracking?
 
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Time2 said:
At some point WSB will have to many target stocks and will not be able to recruit enough followers to move those stocks very much.
That may be a route to their ruin, just start pumping dozens of stocks that have some short interest, to spread WSBs readers money thin.
Click to expand...

Sell your GME and put it in KOSS? Oh wait...

How about this. The next checks are coming from our Uncle. Probably going to be somewhere between $1000 and $1400.
 
sengsational said:
The Black Rock positions in GME mean little if they don't sell before the price goes back to what is justifiable.
Click to expand...
Exactly.

When I worked for a startup, we were all rich with our private shares valued at $12. And then the VCs bailed and sold us with our shares valued at $0.08 per share.

Not rich.
 
I looked up GME on Yahoo finance and it has the 9 month prediction as a green up arrow :LOL:
 
jim584672 said:
In stock settlement no shares actually change hands at the Transfer Agent because Cede & Co. is the sole owner for all brokers. Book entry changes of position are logged internally in DTC. Since brokers are part of the DTC stock loan program a short sale is covered by creation of a stock loan internally between brokers. No short sales are naked, it is accounted for within DTC. The natural consequence is more shares can be floating due to open short sales than actually exist. This is legal and normal.

If everyone stopped using margin accounts it would almost be possible to stop short sales.
Click to expand...


When I wrote "shares changing hands", I meant change of ownership as marked on somebody's ledger, the same as cash changing hand via ACH. Nothing physical was changing hands, only the notation of the ownership.

There are no new net shares created when a short seller has to borrow shares to sell. Naked shorting creates new fictitious shares, and is not allowed. However, option trading can create the equivalent of naked shorts, as described in Investopedia.

Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed before they sell it short. Due to various loopholes in the rules, and discrepancies between paper and electronic trading systems, naked shorting continues to happen.

These short sales are almost always done only by options market makers because they allegedly need to do so in order to maintain liquidity in the options markets. However, these options market makers are often brokers or large hedge funds who abuse the options market maker exemption...
Click to expand...


One can create a synthetic short via options, as explained below.

The synthetic short stock options strategy consists of simultaneously selling a call option and buying the same number of put options at the same strike price.
Click to expand...
 
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dixonge said:
Lots of concern being expressed here for the 'little guy' and ignorant youths of the WSB Reddit forum. Keep in mind, the 'B' stands for Bets. From the beginning this 'subreddit' was about taking money you could afford to lose and gambling with it. It is basically a Wild West version of the LOL's Market Timing Newsletter thread here on E-R. Sure, maybe some newbies are betting too much. But mostly people are having fun. I have seen a lot of sentiment there which indicates that they really don't care if they lose it all. They are prepared to 'hodl' and 'to the moon.'...
Click to expand...


Just like in war, when foot soldiers are urged to charge in a "human wave attack" into the fusillade of machine guns, while the generals are behind the line screaming "I have your back".

Oh well, at least these Redditor followers are losing only money, not their life.

PS. I just recalled the song "Fernando" by ABBA, and have to share it here. :)



 
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NW-Bound said:
There are no new net shares created when a short seller has to borrow shares to sell. Naked shorting creates new fictitious shares, and is not allowed. However, option trading can create the equivalent of naked shorts, as described in Investopedia.
Click to expand...
As I pointed out there are not "naked" shorts because the short is covered by an inter-broker loan in the DTC by auto process.

Lets say everything is physical. If you can borrow shares from a person to sell in the market (a short sale), those shares get redeposited and get resold by another person, (another short sale), and this repeats the same way, now you have multiple owners for the same original shares. These are not "naked" shorts. Each short is "covered".

DTC just makes the process automated.
 
jim584672 said:
As I pointed out there are not "naked" shorts because the short is covered by an inter-broker loan in the DTC by auto process.

Lets say everything is physical. If you can borrow shares from a person to sell in the market (a short sale), those shares get redeposited and get resold by another person, (another short sale), and this repeats the same way, now you have multiple owners for the same original shares. These are not "naked" shorts. Each short is "covered".

DTC just makes the process automated.
Click to expand...

I thought that we agreed. :)
 
NW-Bound said:
I thought that we agreed. :)
Click to expand...
I sorry, it sounded to me like you were saying naked shorting causes shorts at over 100%. But I am was saying over 100% is entirely possible with plain old covered shorts.
 
Yes, as jurgs01 and then you pointed out, the legal shorting causes more floating shares, along with the shorted shares.

For people to follow, here's a simple example.

Suppose we start out with A having the original 1 share. B borrows it to sell short to C. D borrows from C to sell short to E. E then lends it to F to sell short to G.

Now, we have A, C, E, and G being long 4 shares, while B and D, and F are short a total of 3 shares. The net in the market is still 1 share.

Now, say the share price goes up from $10 to $11. A, C, E, G are each $1 richer, while B, D, and F are each $1 poorer. The net effect is still only $1 of total market gain.

But what if B, D, and F are the same guy? He lost $3 while the stock only gains $1. That's what the guy gets if he's greedy.
 
finnski1 said:
This was the latest TD Ameritrade message I got regarding many of the stocks mentioned in this thread.

TD Ameritrade Trading Restrictions on Stocks

Securities with trading restrictions

We have placed some restrictions on the following securities. These restrictions will not prevent clients from making basic buy and sell transactions. This list is as of January 29, 2021, 4:30PM ET.


  • AMC, CVM, EXPR, FOSL, GME, NOK, BB, BBBY, FIZZ, GSX, IRBT, NCMI, TR, UONE, VIR, NAK, NAKD, DDS, KOSS

The following restrictions are in place:

      • Stocks - 100% holding requirement (not marginable)
      • Long calls and puts are allowed
      • Covered call and short put orders may only be placed with a broker. Please be aware that wait times to speak with a broker may be longer than normal due to current market conditions.
        • Covered calls only allowed if your account currently has the shares
        • Short puts only if you have the maintenance/cash to cover the entire exercise amount of the short puts
      • All other complex options orders will not be accepted

Please keep in mind that this list is not inclusive of every security restriction and may change at any time.
Click to expand...

This list is several days old. Here is the TDA page that is updated at least daily.
https://www.tdameritrade.com/td-ameritrade-trading-restrictions-stocks.page
 
At this point, there are so many people shouting in the /wsb and /crypto sub-Reddits (not only to mention the Discords that is more "real time") it's only mass confusion. There doesn't seem to be one ring leader that is able to quell the crowd, and the volume today is reflecting that. Normalcy will return sooner than later, I believe.
 
I'm surprised that the price is holding up as well as it has. I looked this morning, and the pre-opening trades were above $300. Looked like a lot of volume and got down to $220, but only briefly. Now in the $240 range. What a ride.

How high does it have to get for the mother of all margin calls?
 
finnski1 said:
This was the latest TD Ameritrade message I got regarding many of the stocks mentioned in this thread.
  • Covered calls only allowed if your account currently has the shares
Click to expand...
Click to expand...


The above is unusual. When I buy a stock, as soon as I get the confirmation that the buy order is executed, I can immediately sell a covered call on it.

It sounds like the broker now requires that you wait until the trade is settled, and the shares are cleared to be in your possession before you can sell the call.

Are they afraid that the other side of the trade may fail to deliver the shares?
 
sengsational said:
I'm surprised that the price is holding up as well as it has. I looked this morning, and the pre-opening trades were above $300. Looked like a lot of volume and got down to $220, but only briefly. Now in the $240 range. What a ride.

How high does it have to get for the mother of all margin calls?
Click to expand...
Not holding up well into AH. Screenshot_20210201-175554_Robinhood.jpg
 
NW-Bound said:
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.
Click to expand...


What I like today is to see my portfolio regained $96.8K. Still a long way to go to reclaim my personal high watermark, but I like to offer the following observation.

It's the largest daily gain ever for me. Still the ratio of $96.8K/$168K (largest daily gain over largest daily loss) is roughly the same as it ever was.

The market always goes down faster than it climbs. This means fear is usually stronger than greed. :)
 
Back on the meme stocks, I read that AMC as well as other corps have taken this chance to issue a lot of new shares to raise cash. Some have managed to wipe out their debt, and get a better balance sheet.

This means their shares should not drop all the way back down to where they were before this Reddit fiasco. But should they be higher than their pre-Covid value? I don't think so, because their business is not back to normal yet.

Just some musings, as I have no desire to buy/sell these stocks.
 
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