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GameStop Taking Down A Hedge Fund

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6 minutes ago, 3 Stacks said:

Hey "Mr. I Know Everything About Finance", do you think it's reasonable that hedge funds were shorting 140% of GME stock at one point? Do you think it's fine that when these people got punched in the mouth for doing so, they were able to get brokerages to stop people from buying certain stocks? It's easy to find what's wrong here. 

I don't know everything about finance. I know a lot about markets and market mechanisms though. If you don't like me pointing things out on this thread then fine I'll stop. No skin off my nose.

 

I think its fine that they were shorting GME yes. The fact it was 140% just made it harder for the shorters, it didnt prevent anyone buying shares. If shares were in short supply, then it was because the broker was manipulating the market - if that is the case then it should be investigated, just as the obvious fix yesterday should be investigated. Markets depend on freedom to buy and sell and frankly the folks who rigged the market yesterday should be imprisoned and never allowed to work in the finanical industry again. Will they be? Don't know.

 

I don't care about any Hedge Fund losing cash as long as my pension isn't involved. They got burned by taking a short position ahead of a price reversal. That happens a lot. Hopefully this experience will teach them to be a bit more humble, but somehow I doubt it.

 

 

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1 hour ago, M_B said:

 

I don't care about any Hedge Fund losing cash as long as my pension isn't involved. 

 

 

Your pension would (or at least should) be so diversified it would not be affected.

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1 hour ago, M_B said:

I don't know everything about finance. I know a lot about markets and market mechanisms though. If you don't like me pointing things out on this thread then fine I'll stop. No skin off my nose.

 

I think its fine that they were shorting GME yes. The fact it was 140% just made it harder for the shorters, it didnt prevent anyone buying shares. If shares were in short supply, then it was because the broker was manipulating the market - if that is the case then it should be investigated, just as the obvious fix yesterday should be investigated. Markets depend on freedom to buy and sell and frankly the folks who rigged the market yesterday should be imprisoned and never allowed to work in the finanical industry again. Will they be? Don't know.

 

I don't care about any Hedge Fund losing cash as long as my pension isn't involved. They got burned by taking a short position ahead of a price reversal. That happens a lot. Hopefully this experience will teach them to be a bit more humble, but somehow I doubt it.

 

 

I didn't ask you if shorting was fine, I asked you if you think it's reasonable they should be shorting more than 100%, in this case 140%. That's a rhetorical question. The answer is no. They got cunted, and now they're mad and pulling dirty shit. This isn't good for anybody.

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16 minutes ago, 3 Stacks said:

This isn't good for anybody.

Disagree - the market corrects itself . Always.

 

There will be repercussions for brokers stopping trading and the idea of a big short has been exposed, which means it is less attractive.

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26 minutes ago, 3 Stacks said:

I didn't ask you if shorting was fine, I asked you if you think it's reasonable they should be shorting more than 100%, in this case 140%. That's a rhetorical question. The answer is no. They got cunted, and now they're mad and pulling dirty shit. This isn't good for anybody.

The percentage is irrelevant - why do you think its important?

 

Shorter borrows shares from broker. Sells them. Borrows the same shares again. Sells them again. And so on.

 

What do you think the problem is?

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43 minutes ago, TheHowieLama said:

Your pension would (or at least should) be so diversified it would not be affected.

Yes I agree.

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14 minutes ago, M_B said:

The percentage is irrelevant - why do you think its important?

 

Shorter borrows shares from broker. Sells them. Borrows the same shares again. Sells them again. And so on.

 

What do you think the problem is?

Because it's greedy and it's risky.

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Just now, 3 Stacks said:

Because it's greedy and it's risky.

Well yes I can't argue with that. It is their risk though, and now it has bitten them in the arse.

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16 minutes ago, Red Phoenix said:

Stock market opened and GameStop just started trading at double the value of yesterday.

 

If you're using google's stock checker it didn't open at nearly double the value like it says now, it was actually at least 400.00. That's now been adjusted though to 378.24 at 9:30.

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I had a quick look at CD Projekt's share price yesterday as this was going on and was surprised to see that it'd rose a decent amount. I thought it was maybe because Elon Musk was tweeting about Cyberpunk then I found this :

 

Quote

MILAN (Reuters) - Evotec rose sharply on Tuesday amid market speculation that Melvin Capital Management was unwinding its positions in the German drugmaker after some of its investments turned sour.

Evotec’s shares jumped 10% at one point on Tuesday with three traders saying the move was likely linked to Melvin Capital closing out its shorts following losses on GameStop and other investments.

Battery maker Varta surged for a similar reason, a German-based trader said, while shares in Polish videogame firm CD Projekt also saw strong demand. Over the last two sessions Varta and CD Projekt shares have both risen nearly 20%.

Melvin Capital, founded in 2014 by Gabriel Plotkin, said it does not comment on positions and trading.

Regulatory filings in Germany and Poland show that Melvin currently holds a short position of 6.2% in Evotec, of 4.35% in Varta and of 1.05% in CD Projekt.

 

 

https://www.reuters.com/article/melvin-fund-evotec-de-idUSL8N2K150T

 

Since this started days ago CDPR's shares have recovered more than they have done since december last year so maybe this is actually linked.

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Watching some YouTube videos on this the hedgefunds are greedy unethical bastards who have absolutely no care to the consequences of their actions and as soon as they're pulled up and someone plays them at their own game there is outrage, public I mean peasants investing are labelled hate groups and blocked from playing. The free market but as soon as another player stepped into the game the crying began and they actively change the rules, how is it not market manipulation. The rules are changed when mega rich investors lose money but fuck all when the actions of hedgefunds cost others far far more.

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SongJr has joined the GME train and is quite prepared to lose a few bob if it helps shake the tree. As a consequence I now be thinking whats it all about.

So apparently I can borrow 1 share of XYZ valued at £10 for £10 (why borrow not buy) then slag off XYZ such that shares are more likely to devalue to £5 (such is my influence) and then buy at £5. I return my borrowed share and Im £5 quid up. Hey presto, nothing dodgy like manipulation here.

Why can you even borrow shares. Surely its a buy/sell situation.

How can you even trade in more than 100% of something. You cant trade more than there is.

I dont get it. Seems dodgy as fuck to me.

 

 

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26 minutes ago, SilverSong said:

SongJr has joined the GME train and is quite prepared to lose a few bob if it helps shake the tree. As a consequence I now be thinking whats it all about.

So apparently I can borrow 1 share of XYZ valued at £10 for £10 (why borrow not buy) then slag off XYZ such that shares are more likely to devalue to £5 (such is my influence) and then buy at £5. I return my borrowed share and Im £5 quid up. Hey presto, nothing dodgy like manipulation here.

Why can you even borrow shares. Surely its a buy/sell situation.

How can you even trade in more than 100% of something. You cant trade more than there is.

I dont get it. Seems dodgy as fuck to me.

 

 

If you buy, you are setting yourself up for a loss, if you think the share price will be lower in a couple of months. You do it with stock you think the market has overpriced. For example, people who argue Tesla should not be valued at the current price, should short its shares and make a profit on it.

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1 hour ago, SilverSong said:

SongJr has joined the GME train and is quite prepared to lose a few bob if it helps shake the tree. As a consequence I now be thinking whats it all about.

So apparently I can borrow 1 share of XYZ valued at £10 for £10 (why borrow not buy) then slag off XYZ such that shares are more likely to devalue to £5 (such is my influence) and then buy at £5. I return my borrowed share and Im £5 quid up. Hey presto, nothing dodgy like manipulation here.

Why can you even borrow shares. Surely its a buy/sell situation.

How can you even trade in more than 100% of something. You cant trade more than there is.

I dont get it. Seems dodgy as fuck to me.

 

 

You have to pay a fee to borrow them, and the share price won't fall if nobody sells. In fact it will go up and you'll be f**ked. Shorting doesn't make a share price goes down. Only folks selling shares can make the price go down in a free market.

 

If you keep borrowing and selling the same shares, then you can trade over 100% of a stock. You can short 2000% if you want, but the price still won't go down unless someone sells.

 

The other side of the coin is buying a share and telling everyone they should buy it so the price goes up.

 

Shorting is bloody dangerous - you can easily lose your house - but it is an essential maket mechanism to keep the market honest and prices reflecting a true value.

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45 minutes ago, M_B said:

You have to pay a fee to borrow them, and the share price won't fall if nobody sells. In fact it will go up and you'll be f**ked. Shorting doesn't make a share price goes down. Only folks selling shares can make the price go down in a free market.

 

If you keep borrowing and selling the same shares, then you can trade over 100% of a stock. You can short 2000% if you want, but the price still won't go down unless someone sells.

 

The other side of the coin is buying a share and telling everyone they should buy it so the price goes up.

 

Shorting is bloody dangerous - you can easily lose your house - but it is an essential maket mechanism to keep the market honest and prices reflecting a true value.

What do you reckon is the volume of Gamestop being bought be redditers, how many people do they say were involved? If they say most people are buying knowing they might lose a couple of hundred just to hurt the hedge fund, it must bi millions. 

 

Also, why do other institutional investors don't to the same thing, if you know that somebody is very exposed if the price is higher tnan expected, why don't they just buy the shorted stock and hold it during the time of higher prices, when they know the shorter must buy to return the borrowed stock That is, why is there not more short squeezing then? 

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