Anyone holding GME shares?
- Thread starter KneesUp
- Start date
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nickyboy
Norven Mankey
- Location
- You want hills? We got hills
It won't get regulated, at least not for the forseeable. What will happen, like you say, is the Hedge Funds will learn a lesson and manage their risk more effectively. That means spreading their short positions around more. What it also means is that they will be employing people whose only job is to monitor Subreddits like WallStreetBets and assess the mood there. They will use this an input in to their short position decisions.
It will be a dangerous game for small investors to try to short squeeze another company. The Hedge Funds will be ready. If the investors fail to raise the price with their option trades then they stand to lose a fortune.
OP
OP
KneesUp
Guru
And it will settle down until all the people that lost their bonuses over this retire wealthy at 40, and are replaced by people who haven't learned from history, and so in 10 years or so it will happen again. VW was 2008.
slowmotion
Quite dreadful
- Location
- lost somewhere
Blimey! It's not a stock for the faint-hearted. The share price is all over the place.....
https://www.google.co.uk/search?q=G...1611868326739&scso=_pigTYJ_nNpGhgAaXlJzgBg7:0
https://www.google.co.uk/search?q=G...1611868326739&scso=_pigTYJ_nNpGhgAaXlJzgBg7:0
OP
OP
KneesUp
Guru
It’s pretty volatile. Lots of possibly underhand tactics used today apparently including deflating the price when retail investors were locked out of buying in what could be seen as an attempt to panic shareholders onto selling. Over half of today’s losses look like they have been cleared in after hours trading and the shorts still aren’t cleared. Should be an interesting watch again tomorrow. A lot of the American redditors are not in it for the money they’re in it for revenge on the shorters and are saying they would rather lose their investment completely rather than sell.
IanSmithCSE
Guru
- Location
- Worcester, Worcestershire
Good morning,
I have mixed feelings on this as when the private individuals start losing money a lot of them will start to whine that it's not fair.
Back in 2015 the Swiss Franc was revalued and a lot of people who were not serious investors were using leverage, (effectively trading with borrowed money) to trade currency.
I appreciate that the current Gamestop situation is different in detail, but the principle that many private gamblers/investors whine when they lose money isn't, many end up saying that "They didn't understand ......" or "It's not fair because...".
These currency traders lost a lot of money because people were telling them how easy it was and it was,...... until it wasn't.
Leverage is nasty and over the year's it availability has been cut back, but the idea is that if you have £100 and the Swiss Franc normally trades plus or minus 10% you could notionally buy £1,000 worth of Swiss Francs from a trading platform because your £100 covers the likely losses.
Note that you never actually buy the currency, just enter into a contract with a trading platform.
But, and there is a big but, once your £100 no longer covers the theoretical loss if you sold now, you have to immediately deposit enough money with the trading platform to cover this current paper loss. If you don't your position is closed and you are forced to take the paper loss as a real loss and you owe the difference.
A lot of private investors didn't understand this so when the Franc went from 1.2 Euros to 0.8 and then back to around 1.0 they lost a lot of money and even drove one of the providers, Alpari, out of business as so many individual defaulted on their debts.
You have £100, you buy £1,000 worth of Swiss Francs which lose a third of their value, £333, not only have you lost all of your £100 but you also owe £233, many private investor claimed they didn't realise this and it wasn't fair. But they were happy to take profits from this leverage.
We are starting to see this complaining that it not fair https://www.bbc.co.uk/news/business-55837519 with Gamestop. Everybody knew what they were doing when they bought Gamestop shares in the last few days, they were trying to play the system and that must have risks. "Someone told me that it was easy money and it wasn't, that's not fair"
Bye
Ian
I have mixed feelings on this as when the private individuals start losing money a lot of them will start to whine that it's not fair.
Back in 2015 the Swiss Franc was revalued and a lot of people who were not serious investors were using leverage, (effectively trading with borrowed money) to trade currency.
I appreciate that the current Gamestop situation is different in detail, but the principle that many private gamblers/investors whine when they lose money isn't, many end up saying that "They didn't understand ......" or "It's not fair because...".
These currency traders lost a lot of money because people were telling them how easy it was and it was,...... until it wasn't.
Leverage is nasty and over the year's it availability has been cut back, but the idea is that if you have £100 and the Swiss Franc normally trades plus or minus 10% you could notionally buy £1,000 worth of Swiss Francs from a trading platform because your £100 covers the likely losses.
Note that you never actually buy the currency, just enter into a contract with a trading platform.
But, and there is a big but, once your £100 no longer covers the theoretical loss if you sold now, you have to immediately deposit enough money with the trading platform to cover this current paper loss. If you don't your position is closed and you are forced to take the paper loss as a real loss and you owe the difference.
A lot of private investors didn't understand this so when the Franc went from 1.2 Euros to 0.8 and then back to around 1.0 they lost a lot of money and even drove one of the providers, Alpari, out of business as so many individual defaulted on their debts.
You have £100, you buy £1,000 worth of Swiss Francs which lose a third of their value, £333, not only have you lost all of your £100 but you also owe £233, many private investor claimed they didn't realise this and it wasn't fair. But they were happy to take profits from this leverage.
We are starting to see this complaining that it not fair https://www.bbc.co.uk/news/business-55837519 with Gamestop. Everybody knew what they were doing when they bought Gamestop shares in the last few days, they were trying to play the system and that must have risks. "Someone told me that it was easy money and it wasn't, that's not fair"
Bye
Ian
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What is not fair is a provider shutting down access to trade for the unwashed masses while keeping it open for the enlightened and educated hedge funds
What is not fair is the hedge fund paying 800 000$ in speach fees to the secretary of tresury and aforementioned secretary to be expected to regulate the hedge fund
What is not fair is presumption that the unwashed rabble does not know what they are doing, where in fact many of them do
What is not fair is the hedge fund paying 800 000$ in speach fees to the secretary of tresury and aforementioned secretary to be expected to regulate the hedge fund
What is not fair is presumption that the unwashed rabble does not know what they are doing, where in fact many of them do
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Beebo
Firm and Fruity
- Location
- Hexleybeef
I don’t think they are complaining because they lost money, they knew what they were doing and it worked for a short time, until the market was shut down. They are complaining about that.
I agree that it will eventually become a problem as the bubble will collapse and the ones holding the stock at that point will suffer. The sensible ones will have sold early.
I couldn’t care less about the institutional short sellers.
nickyboy
Norven Mankey
- Location
- You want hills? We got hills
You understand the capital requirements placed on Market Makers and the impact on these of heavy Option put trades?What is not fair is a provider shutting down access to trade for the unwashed masses while keeping it open for the enlightened and educated hedge funds
What is not fair is the hedge fund paying 800 000$ in speach fees to the secretary of tresury and aforementioned secretary to be expected to regulate the hedge fund
What is not fair is presumption that the unwashed rabble does not know what they are doing, where in fact many of them do
1) Investor buys out of market options to buy GME from a Market Maker. Say current price is 10, Option is at 15. Price of option is 1
2) MM makes the trade. The share has a Delta (volatility index) of 25. This means they buy 25 GME shares in the market at 10 to hedge their risk on selling the option
3) Then if volatility increases (to say Delta 40) they buy a further 15 GME shares
The above takes huge capital if Options trade heavily. More capital than a lot of MMs have. Hence they closed down the trade as they were breaching. Citadel Capital (who back up Robinhood) were in that situation
However there is a suggestion that Citadel reloaded their GME shorts before telling Robinhood to stop trading GME 🤔
IanSmithCSE
Guru
- Location
- Worcester, Worcestershire
Good morning,
Anyone with experience knows that this will not necessarily be the case in very unusual circumstances.
I am not saying that I would have predicted that a particular platform would have done what say Robinhood did, but Robinhood only restricted buying not selling and their explanation will either be believed or not depending upon an individual's world view. :-)
View: https://www.youtube.com/watch?v=cuCcchMOsKE&ab_channel=CNBCTelevision
I have made mistakes, I still have shares in NMC that were worth a significant amount when they were suspended, I had incorrectly underestimated the level of fraud going on in NMC and I had read the Muddy Waters report. Yes I am pretty ... off about this because the auditor took huge fees and missed over $6 billion dollars of off balance sheet debt.
The moderators might decide to take this link down, http://iansmithcse.co.uk/BSD/STH/ShortTermHold.aspx it is a serious discussion on short term holding and I include it as an indication that I am not just trolling. :-)
Bye
Ian
I disagree that they knew what they were doing because many appear to have made the assumption that they would be able to buy and sell entirely at a time of their choosing.
Anyone with experience knows that this will not necessarily be the case in very unusual circumstances.
I am not saying that I would have predicted that a particular platform would have done what say Robinhood did, but Robinhood only restricted buying not selling and their explanation will either be believed or not depending upon an individual's world view. :-)
View: https://www.youtube.com/watch?v=cuCcchMOsKE&ab_channel=CNBCTelevision
I have made mistakes, I still have shares in NMC that were worth a significant amount when they were suspended, I had incorrectly underestimated the level of fraud going on in NMC and I had read the Muddy Waters report. Yes I am pretty ... off about this because the auditor took huge fees and missed over $6 billion dollars of off balance sheet debt.
The moderators might decide to take this link down, http://iansmithcse.co.uk/BSD/STH/ShortTermHold.aspx it is a serious discussion on short term holding and I include it as an indication that I am not just trolling. :-)
Bye
Ian
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Beebo
Firm and Fruity
- Location
- Hexleybeef
I’m know nothing about this. so here’s a stupid question.
How can yourestrict Buying but not Selling.
Who are they selling too?
The whole thing stinks. It just seems like the big boys have got angry because the little boys turned up on their pitch and beat them.
nickyboy
Norven Mankey
- Location
- You want hills? We got hills
It's a bit confusing. On one had he says the reason they won't allow buying of some stocks is due to SEC Capital Requirements and monies that have to be deposited with Clearing Houses. On the other hand he says there are no liquidity problems
These two things appear to contradict one another.
Anyway, all interesting stuff
@RobinHood which is the Twitter of the Nottingham-based Robin Hood Society blew up yesterday with GME investors spending profits on arrows and felt hats for the bantz
