For pointers into the massive graph of submissions on this topic, see https://news.ycombinator.com/item?id=25933543.
Yep. Agreed. Spot-on. That's what Wall St does. If you don't like it, try and stop it. But for everyone, including the hedge funds.
Treating the derivatives markets like a casino (and taxing appropriately) sounds like a great idea.
You can’t just dismiss all that as nothing.
That isn't to say that traditional Wall Street people haven't done anything wrong in the past or are in the right in any way here. It is simply pointing out there is a big spectrum in "its all gambling" and this activity seems like it is closer to the MIT Blackjack side.
The hedgefunds should definitely take note not to play a dangerous game because losing is always on the table.
1. If you end up losing money in the end, I'd hardly call that "beating".
2. "wall st" isn't a single entity. The hedge funds shorting GME might have lost money, but there's plenty of companies that made money on the side, eg. the asset management firm that unloaded their GME shares.
Taken at face value, this advice boils down to never doing anything that involves a large risk. No civil rights movement, no D-Day invasions, etc.
There's certainly a reminder here about tail risk, and the ability of the market to stay irrational longer than you can stay solvent. However, the takeaway isn't "only take on big risks if failure is impossible." Taking calculated risks is an important life skill, and so is realizing that humans have pretty bad intuitions about risk.
In hindsight, we may find some funds that had 30 different short positions similar to this one. This one position blew up badly, but if the others come out moderately ahead, and they came out ahead net-net, then maybe this just validates their strategy.
"then maybe this just validates their strategy."
Well, no, the GME stock rally made them insolvent for such a long time that only the SEC intervening might save them. (Again, not suggesting that's the SEC's motivation)
30 day non-volatile shortstocks should require significantly higher margins than they already do because debt increases nonlinear when the market goes up. but no, higher margins would mean you can invest less so the SEC better protect everyone on wall street from market gambling. The SEC operates on a complete grey area and many people who have 'beaten' wall street ended up being caught and nerfed by the SEC.
'our mission is to protect investors and maintain fair, orderly, and efficient markets'
The SEC is not your friend. It does not help YOU when the market is unfair, volatile, inefficient. only when big waves form they feel the need to help big players. The SEC is just going to blame amateurs, help the hedgefunds and make no attempt to help the day-traders who many people argue ITT got caught up in the GME stocks.
everyone who bought yesterday is fighting exchanges whose only option for GME is "sell" because buying is restricted.
I don't know how some of these shorts will find 20 million shares by tomorrow.
Frankly I thought with puts you state time limits, and with shorts you decide for yourself when you’ll have to give shares back. If that is not so, then I guess I finally understand why everyone says shorts are super risky.
I can’t really understand how the exchange is saying “no, you’re not allowed to buy, but you can sell all you want” is legal.
you're confusing shorts with options. shorts don't expire. They can be held indefinitely as long as you have the margin to keep up with the losses.
Although if a decent amount of retail investors lose money as a result of not being able to sell stock they already own then the blood is in the water for a class action. Saul Goodman is waiting for your call!
I strongly predict it will end with:
"And no technology was discussed"
The endgame is to use collaborative economic force to push rent-seekers out.
Where it can continue to rise is where there are those holding short positions that need to buy shares to cover those positions. They can only buy at a price the seller agrees, and in a short squeeze situation the seller can demand pretty much any price they want (in theory)
the days to close has fallen to 1.4 right now.
I’ve read posts on /r/WSB where people talk about having put all of their savings into this.
I only hope that they’re just teenagers with little savings.
Send those people to jail for illegally issuing unregistered shares of a security, or counterfeiting shares of a security, because everything that happened after that point is entirely their fault.
Alternatively, fine them $10B and issue it as a dividend to the shareholders that bought and held after Jan 1.
If Wall Street wants to address this, they could put limits on the number of shares that can be shorted.
https://arstechnica.com/gaming/2021/01/the-complete-morons-g...
