Investing Thread

[rocky_warrior]

There's a couple of sites that track this, but as of this morning, GME still had 140% of shares outstanding shorted.

https://www.highshortinterest.com/

I mean, GME *should* be highly shorted right now.  Share price is going to plummet. But can you survive the margin calls...

[buckchuckler]

Who is tomorrow's play?  That's the real question.

[Golden Avalanche]

BINGO. This is is largely a community of reckless degenerates. Not a coordinated skilled group of renegade amateur traders. It’s still pretty incredible to watch in real time

I'm not sure reckless degenerates is accurate. Having read through these forums there is a good level of knowledge among a decent-sized faction.

Sure there are hangers on and Investing Bros and some (not all) people will get stung but the motivation for a lot of these people seems to be the Great Recession. They think this is small way to punch back at people who had an enormous impact on their adolescence and young adulthood.

[JWags85]

I'm not sure reckless degenerates is accurate. Having read through these forums there is a good level of knowledge among a decent-sized faction.

Sure there are hangers on and Investing Bros and some (not all) people will get stung but the motivation for a lot of these people seems to be the Great Recession. They think this is small way to punch back at people who had an enormous impact on their adolescence and young adulthood.

There are more people participating in WSB and in this gold rush who don’t know what margin is or get confused that their call is losing money even though the stock is going up, than people who think this is a clever way to get back at “the man”. 

And plenty of people can have knowledge of markets and still be reckless degens.  I can know tons about sports betting but still bet ridiculous 6 team parlays chasing big riches or live bet huge odds trying to get lucky.  Same as people who are buying and holding calls on stocks that are insanely overextended.  For every person in there that got GME calls in the 20s and held on.  There are people buying calls $100 out of the money for insane premiums thinking it will run to $500/700/1000.  That forum is LITTERED with people using CC money and other insanely dumb money moves to try to buy into these market runs.  I don’t care how knowledgeable they are, that’s prime bubble behavior and far far more likely to get utterly wiped out than change the financial world

I agree that you shouldn’t be able to short a stock to 140% short interest and funds overly loading the boat on these types of positions get what they deserve.

[StillAWarrior]

A fair amount of the recent posts on the GME issue and others might as well have been written in a foreign language, as far as I'm concerned.

Like I said earlier, the premiums on GME show it.  The cost of March/April $50 puts are the same this morning as yesterday when the stock was at $150, the reaction to prevent big sums being made either way is already happening.

Case in point. I know that people don't post on a thread like this to explain things to the dumbest guy in the room (i.e., me) but I have no idea what this means. I'm curious, and would appreciate an explanation, but won't think any less of you if you're not interested in spoon feeding the village idiot.

[StillAWarrior]

There are more people participating in WSB and in this gold rush who don’t know what margin is or get confused that their call is losing money even though the stock is going up, people who think this is a clever way to get back at “the man”. 

And plenty of people can have knowledge of markets and still be reckless degens.  I can know tons about sports betting but still bet ridiculous 6 team parlays chasing big riches or live bet huge odds trying to get lucky.  Same as people who are buying and holding calls on stocks that are insanely overextended.  For every person in there that got GME calls in the 20s and held on.  There are people buying calls $100 out of the money for insane premiums thinking it will run to $500/700/1000.  That forum is LITTERED with people using CC money and other insanely dumb money moves to try to buy into these market runs.  I don’t care how knowledgeable they are, that’s prime bubble behavior and far far more likely to get utterly wiped out than change the financial world

I agree that you shouldn’t be able to short a stock to 140% short interest and funds overly loading the boat on these types of positions get what they deserve.

There are plenty of people over there who think it will be $1000 by the end of the week and that $5000 is possible before it's over. Or at least that's what they're saying. I'm not sure they really believe it as much as they are trying to encourage people to hold and keep stickin' it to the man.

[Hards Alumni]

What a highly entertaining couple of days.  Love to see hedges get rekt.

[Golden Avalanche]

There are more people participating in WSB and in this gold rush who don’t know what margin is or get confused that their call is losing money even though the stock is going up, people who think this is a clever way to get back at “the man”. 

And plenty of people can have knowledge of markets and still be reckless degens.  I can know tons about sports betting but still bet ridiculous 6 team parlays chasing big riches or live bet huge odds trying to get lucky.  Same as people who are buying and holding calls on stocks that are insanely overextended.  For every person in there that got GME calls in the 20s and held on.  There are people buying calls $100 out of the money for insane premiums thinking it will run to $500/700/1000.  That forum is LITTERED with people using CC money and other insanely dumb money moves to try to buy into these market runs.  I don’t care how knowledgeable they are, that’s prime bubble behavior and far far more likely to get utterly wiped out than change the financial world

I agree that you shouldn’t be able to short a stock to 140% short interest and funds overly loading the boat on these types of positions get what they deserve.

Quite frankly, I don't think this has much of anything to do with sound investment strategy. That's why I don't think the majority are reckless nor degenerate. They're unnatural carnal knowledgeing with people. They're trolls. They're bored. They think it's just a game because that's all they've seen over the last 10-15 years.

This is more of a philosophical kerfuffle than having to do with financial investment. The elites in the financial world will spend the next week huffing and puffing their ego to put these people back in their hole. It will be totally forgotten by Washington's & Lincoln's Birthday.

[JWags85]

Case in point. I know that people don't post on a thread like this to explain things to the dumbest guy in the room (i.e., me) but I have no idea what this means. I'm curious, and would appreciate an explanation, but won't think any less of you if you're not interested in spoon feeding the village idiot.

So basically an option gives the owner the "option" to buy a block of shares (1 contract=100 shares) at the strike price at the expiration date.  At its very basic, you need the option to be "in the money" or ITM, by the amount you paid for it, to break even.  So if you bought a GME $50 call for $5, it would need to be at least $55 at expiration to break even, alternatively if you bought a $50 put for $5, it would need to be at $45.  But there is tons of volatility within stock prices, so there is "premium" built in.  So that $50 call option might cost $10 even though the underlying stock price is $40 to reflect the movement and volatility in the stock causing it to easily surpass that strike price by expiration.  Thats where the money is made. 

If you want to look at prices and premiums even more simply, you can look at their movement as "odds" of sorts. 

What I was referencing was the price for a $50P, 2 months out, was more or less the same yesterday when the stock was near $125, as it was today over $300.  You needed GME to
drop around $75 to get your options close to ITM, but now, paying the same price, it needs to drop $250.  It was pricey and not great value yesterday, today its even worse and a flashing red "stay away".

There is plenty of other factors and variables like time decay and such, but i hope that helped a bit.

There are plenty of people over there who think it will be $1000 by the end of the week and that $5000 is possible before it's over. Or at least that's what they're saying. I'm not sure they really believe it as much as they are trying to encourage people to hold and keep stickin' it to the man.

Sure, but thats also to my point of people really having no idea.  Its a lot of hopium.  At a certain point, large amounts of profit taking will occur, and then momentum will start to wane.

[JWags85]

Quite frankly, I don't think this has much of anything to do with sound investment strategy. That's why I don't think the majority are reckless nor degenerate. They're unnatural carnal knowledgeing with people. They're trolls. They're bored. They think it's just a game because that's all they've seen over the last 10-15 years.

This is more of a philosophical kerfuffle than having to do with financial investment. The elites in the financial world will spend the next week huffing and puffing their ego to put these people back in their hole. It will be totally forgotten by Washington's & Lincoln's Birthday.

Agree to disagree.  Ive followed WSB for a long time, one of my buddies reads it daily.  Absent the last 2 weeks, that place is the type to throw tons of money at rumors and speculation, and always chase the quick buck.  I don't know how you can read it and think the majority are a bunch of clever trolls and not degen gamblers.

[Hards Alumni]

Agree to disagree.  Ive followed WSB for a long time, one of my buddies reads it daily.  Absent the last 2 weeks, that place is the type to throw tons of money at rumors and speculation, and always chase the quick buck.  I don't know how you can read it and think the majority are a bunch of clever trolls and not degen gamblers.

It's this.  Historically, they're not a very successful group.

[21Jumpstreet]

I dipped my toe in last night with FU money. What I found interesting was when some stocks started to gain traction and double or even triple this morning, all the mobile platforms mysteriously shut down and TDAmeritrade instituted new rules on buying/selling the current hot stocks. Actually couldn’t sell when I wanted to, ended up fine.

The house always wins in gambling, and we ain’t the house.

[DegenerateDish]

I’m taking a spin at the roulette wheel on NOK. Just placed an order for a few hundred shares.

[21Jumpstreet]

I’m taking a spin at the roulette wheel on NOK. Just placed an order for a few hundred shares.

Same. Cashed in on BB and AMC earlier today and then jumped back in a little. Up quite a bit on GNUS as well. Had NAKD in my watchlist for months but didn’t jump on that train.

[DegenerateDish]

For transparency’s sake, I got NOK at $7.35.

The last time I owned NOK was 2000, crazy here we are 21 years later.

[21Jumpstreet]

$6.88

All that’s old is new again.

[buckchuckler]

$6.88

All that’s old is new again.

I'm gonna get me some AOL stock.

[21Jumpstreet]

I'm gonna get me some AOL stock.

Amazing!

[JWags85]

I dipped my toe in last night with FU money. What I found interesting was when some stocks started to gain traction and double or even triple this morning, all the mobile platforms mysteriously shut down and TDAmeritrade instituted new rules on buying/selling the current hot stocks. Actually couldn’t sell when I wanted to, ended up fine.

The house always wins in gambling, and we ain’t the house.

It’s not that they mysteriously shut down, the brokerage houses are just terrible at handling high retail volume. Historically, any time there has been a huge gap down or gap up in the morning, TDA or Schwab or Fidelity get totally gummed up.  This even happened when they still had commissions in place, where they WANTED you to trade and sell, cause it made them money.

As for the new rules, that feels like CYA.  Cause when people get mauled by GME losing a few hundred points or something like that with some of these crazy names, they are quick to blame the broker.  Like the guy who committed suicide over a Robinhood trade, people wanted to string the brokerage up for “allowing” it.

I don’t want to defend the majority of online brokers cause they suck pretty hard, but most of this is just them sucking and not something more nefarious

[21Jumpstreet]

It’s not that they mysteriously shut down, the brokerage houses are just terrible at handling high retail volume. Historically, any time there has been a huge gap down or gap up in the morning, TDA or Schwab or Fidelity get totally gummed up.  This even happened when they still had commissions in place, where they WANTED you to trade and sell, cause it made them money.

As for the new rules, that feels like CYA.  Cause when people get mauled by GME losing a few hundred points or something like that with some of these crazy names, they are quick to blame the broker.  Like the guy who committed suicide over a Robinhood trade, people wanted to string the brokerage up for “allowing” it.

I don’t want to defend the majority of online brokers cause they suck pretty hard, but most of this is just them sucking and not something more nefarious

My use of mysteriously was absolutely sarcasm. I completely agree.

EDIT: Although, it is interesting to listen to the different motivations and arguments people have over who is responsible for all this. It is also interesting to hear media call Reddit posters the manipulators, Reddit call the hedge fund guys the manipulators, etc. It’s all manipulation. Won’t say more and wade into politics and policy.

[TSmith34, Inc.]

I'm gonna get me some AOL stock.

Hey, if the Blockbuster liquidation company can jump 700%+, why not?

After my brief and slightly profitable foray with GME puts yesterday, I've resisted the temptation so far today. As I said, it doesn't even feel like day trading, it feels like putting money on Red and spinning the roulette wheel.

[Hards Alumni]

NAKD

[TSmith34, Inc.]

Case in point. I know that people don't post on a thread like this to explain things to the dumbest guy in the room (i.e., me) but I have no idea what this means. I'm curious, and would appreciate an explanation, but won't think any less of you if you're not interested in spoon feeding the village idiot.

JWags provided an explanation above, but to add to this...what should happen is that the value of your options move in correlation to the price of the underlying stock. That is, the value of a call option should go up if the stock price goes up while the value of a put goes down. And conversely, if the price of the stock goes down, the value of the call also goes down while the value of the put goes up.

With respect to Gamestop, in addition to the premiums you have to pay to purchase the option being completely out of whack as he stated, the price movement itself is not following the basic rule above. The option prices have become somewhat decoupled from the underlying stock, due, I presume, to the massive demand to use options both as hedges and as part of the overall strategy to punish the shortsellers.

[forgetful]

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.

[jesmu84]

If you side with the billionaire hedge funds or criticize the retail/reddit investors in this situation, you're pretty trash.

I sure hope all the talking heads on CNBC get their way and we get more regulation to protect the billionaires.