Kolek planning to go pro
Can someone explain why someone can't just short GME at this point and wait 6 months? Is that not allowed to wait so long?Naive to the nuances of shorting, and calls vs. puts.
The premium charged to buy a put right now on GME is INSANE. You need deep pockets to even think about it... and because the premium is so high, it's eating into the eventual profit margin when the bubble bursts. So people are, rightully saying, why spend that much money for such a (comparatively) small gain?And for just naked shorting the thing... well... deep pockets again because brokers aren't going to just let you smile and whistle while the thing keeps getting squeezed to the moon. Why else do you think the Andrew Left's of the world are covering? If they could whistle their way along, they would... and if they can't, then we can't.
What's more likely:Bailouts of hedge funds negatively affected here?OrGovernment regulation cracking down on individual trading so that licensed funds/brokers are the only ones who can buy/sell stocks?OrBoth?
Right, like I mentioned, you could get $40P for like $5, have the stock plunge $300 to $35, and depending on how fast that happens, make almost nothing. The risk reward is terrible on puts right now.As for shares, there is a also a borrow cost for shares. On very highly demanded stocks, such as GME right now, that can be 20-25%. So say you short, $10000, that’s $2000-2500 a year, so $1000-1250 over that 6 month period. And that’s not counting margin interest as many short positions are 50% equity and 50% margin from the broker. It’s not just a pure “I’ll go short $10K and wait”
Right, like I mentioned, you could get $40P for like $5, have the stock plunge $300 to $35, and depending on how fast that happens, make almost nothing. The risk reward is terrible on puts right now.As for shares, there is a also a borrow cost for shares. On very highly demanded stocks, such as GME right now, that can be 20-25%. So say you short, $10000, that’s $2000-2500 a year, so $1000-1250 over that 6 month period. And that’s not counting margin interest as many short positions are 50% equity and 50% margin from the broker. It’s not just a pure “I’ll go short $10K and wait”Neither. Why would a hedge fund get bailed out? It’s not a bank or a core industry. And it’s not like they were the victim of an industry wide shellacking. Funds make bad bets and blow out ALLLL the time. The destruction of the XIV crushed a bunch a few years ago.And why would they kill retail? There is too much money in retail stock trading for that. From market liquidity, to companies, to brokerage business, etc... that would never happen, the street wouldn’t want it.This is all crazy and it will certainly be talked about in finance classes in the future, but don’t reach to make this something bigger than it is. Things will return to normal and by spring it will be a memory. Markets have been chaotic and prone to black swans for all of their history, this is nowhere near big enough to even broach the topic of regulations or bailouts.
Did you see the interview with the head of NASDAQ today?
With WSB being shut down, I wonder if tomorrow is going to be a gigantic eff you play on all the meme stocks. I think it’s going to be really interesting.My brother works for E Trade, and he’s working 20 hour days. He said he’ll work until midnight, sleep in his home office, and get up at 4. He said they don’t have the staff to handle the insane volumes coming in.
WSB isn't shut down. It went private for ~1hrEdit: I wouldn't be surprised if the subreddit mods + Reddit admins were making a few changes. The GME threads have been bringing the Reddit back-end to its knees. They are on their 4th GME thread of the day now that the mods asked them to roll the thread over well before the 99999 comment limit. Now they're rolling over at 50k comments. Absolutely wild.If GME's market cap is big enough to make the S&P500 criteria, now they just need a few profitable quarters in a row... lolEdit 2: Looks like the WSP Discord server got brigaded and banned for hate speech. Online communities are tough to wrangle sometimes. They should pay for better moderators like we do here at MUScoop
About trying to match social media activity to “unusual” trading or manipulation? That’s nothing new. Before Twitter and Reddit, people were pumping and dumping on stock message boards (the Yahoo Finance boards were VERY popular for it). I’m fairly plugged in to “FinTwit” which is just as adept at trying to spread rumors and do this sort of stuff. It’s VERYYY hard to enforce. The NASDAQ and SEC will certainly try, but it’s hardly a slam dunk.And I saw nothing in her comments about preventing retail consumers from trading, or bailing out funds. And putting limiters on “extreme activity” isn’t the path to preventing only licensed people from buying and selling. It’s like pointing to the authorities cracking down and preventing high speed racing on highways as evidence that potentially only licensed chauffeurs and transportation professionals would be able to drive cars in the future.EDIT: I forgot about the “let funds recalibrate” during halts in volatile names. I’d have to hear more, but again it’s still different than the scenarios you described. Also, don’t discount it being lip service to placate funds/investors/etc during this chaotic time that comes to nothing when everyone moves past this in a few weeks.
Again, I'm not very knowledgeable in all this, and largely reciting what others that do this for a living tell me, but I don't know how you make what they are doing illegal. Is it manipulating stock prices? yes?But the strategies many hedge funds use, and the algorithms driving their trades are designed to manipulate stock prices in some cases. So, if you make it illegal for a group of strangers to chat about doing a gamma squeeze, how do you not make it illegal for people to pool their money together into a hedge fund to get leverage to do the same.
What are you even talking about? Plotkin who runs Melvin Capital is 40. Left is in his late 40s. This was overly aggressive asymmetric short bets that blew up, not stock revolution. Not a bunch of old dinosaurs outsmarted by reckless dudes on Reddit dumping CC balances into RobinHood. Citron is far from done, this hurt but they are notorious for bailing on positions early. LMAO if you think this is anything by an unpleasant blip for Citadel.Market is history is LITTERED with random stock skyrockets and squeezes without true fundamental justification. NKLA and TLRY did it in the last few years alone. And sometimes a fund or two gets blown out in the process. Leverage is a biatch. But that doesn’t mean as a result the ENTIRE market will change. Not everyone can be flawless and generationally wealthy from shorting AAPL like you.
Plotkin is down 100% YTD. He is a crappy manager. All managers that lose 100% of their client's money in three weeks and their firm are crappy.You must work in the investing business. Because only a highly trained investment manager can think this pile of dog sh!t knows what he is going.I'm not afraid of loss porn, apparently, you lack the confidence to do the same. Otherwise, show you have a pair and tell us about your worst trade.And I'll go first again, I got smashed pretty good last year when oil went negative.
But again, you litter good insight with absurd and over-reaching hubris and absurdity. Now the denizens of WSB are “much smarter” than Steve Cohen and Ken Griffin? Lmao, good one. The majority of WSB are perennial losers. Like I said, GME was a perfect storm that started with Michael Bury and Ryan Cohen getting involved, well before WSB had anything to do with it recently. But go ahead, I’d recommend following everything WSB does, maybe offer to start a fund and pool money with them, I’m sure they will crush all those idiot dinosaurs at Citadel and Point72 who have lost their touch. StockGuy69 and his Reddit investment thesis portfolio will HODL and crush them.Plotkin had a fund that is barely 5 years old and had a few hot years. Lumping him in with some of the most successful guys of the last 25 years to say they’ve all “lost it” is just classic Heisy bombastic nonsense
I got up this morning and checked Robinhood and saw that GME was up at $475. Unbelievable.I just checked it again...and it tells me something along the lines of, "This stock is not supported on this platform." It had that message because I had left it on GME when I left the App. When I search for GME on the App, it doesn't exist. WTF?A quick trip over to WSB and they've obviously noticed this too. Apparently if you're holding GME in your account, you can sell it, but Robinhood won't let people buy GME any more.
I had to laugh at a photo caption in a Newsweek article about GME: "Mark Cuban cheered on 'the little guy' after small-dollar users of subreddit r/WallStreetBets drove up the stock price of GameStop, causing high-dollar investors to lose thousands in their plans to 'short-sale' the stock.""Thousands"? Really? Wow. Those high-dollar investors must have shorted literally 10's of shares. While I still don't know what this will look like when the dust clears, the infusion of $2.75 billion into Melvin Capital suggests that maybe more than "thousands" are at issue here. And that was when the price was at $150; it's triple that now.