Reddit and GameStop

[Alumni Guy]

So normally you buy a stock that you think is going up, and sell it when it hits the target, right? In this case you sell a stock that you think is going down, and buy it when it hits the target. There's no real difference, except when you short a stock you have to pay a cost to borrow the stock to sell to someone else, and that carries a percentage that is typically .30% or so per year, so relatively small. But in the case of a hard to borrow stock, the rates will be much higher, and is usually calculated daily, if you can borrow it at all.

The other factor to consider is risk. If you go long (buy) a stock, you have at risk the entire amount of your purchase, in the case that the stock goes to zero. If you short a stock, you theoretically have unlimited risk to the upside, so you have to do things to mitigate the risk. Your brokerage will require additional margin to cover this, and you may wish to purchase protective options to further mitigate your risk.

Lastly, if the stock is a dividend stock, you'll be responsible for paying any dividends that the stock pays to the buyer. Your broker will debit your account when this time comes, so it pays to remain aware of ex-dividend dates to avoid this happening to you.

Didn’t realize there were carrying costs to cover the short. Makes sense.

Thanks for thorough answer!

 

[soflagator]

I'm watching Bloomberg right now...some of the big boys are getting pissed putting restrictions on...f vck them

David Fabre was talking about that this morning. It’s going to see regulatory intervention at some point. Nasdaq was trying to follow the pattern between Reddit posts and buy orders in some manner which they didn’t specify. As he said, it will be nearly impossible to make a case for any wrong doing, and the word concerted effort and manipulation kept being peppered in throughout the morning, but with these funds nearly being wiped out, something will likely be alleged. Regulators don’t mind making something out of nothing.

The irony is some of these comments about the hedge funds getting decimated is the repeated statements that there’s “no real demand” any more, but rather a product of shorts being blown out. While true, that’s literally exactly how guys like Ackman and others often make their billions. They’re just getting burned right now because of a new concept. It will change how some of these hedge funds view shorting for sure.

 

[BMF]

Earlier this morning I couldn't make trades on Schwab. I read on another board that almost all trading platforms were have "glitches".

 

[GatorCatsi]

How many masks does it take to prevent TDS? Good lord, Chris Cilizza is a moron.

GameStop stock: How Trumpism explains the surge - CNNPolitics

 

[wrpgator]

Earlier this morning I couldn't make trades on Schwab. I read on another board that almost all trading platforms were have "glitches".

Same happened here. I tried to take profits in CVM this morning, the stock closed yesterday at $14.49 and was at one point today up $23 per share, I bought at $11 a few months ago. Apparently one of the shorting houses pushing CVM down went bankrupt. Schwab said 'trade halted'. It came back up later but price dipped off the day's highs rapidly. Right now it's up about $9, a 65% increase.
CEL-SCI Corporation. Cel-Sci Corp Stock Quote: CVM Stock News, Quotes, Analysis | Investors.com

Info on CVM and their unique approach to cancer therapy: CEL-SCI Corporation Issues Letter to Shareholders

 

[Mr2Bits]

Earlier this morning I couldn't make trades on Schwab. I read on another board that almost all trading platforms were have "glitches".

I was in on the opening for GameStop and my Merrill account would allow the buy......essentially the hedge funds have convinced all trading desks to disallow the buy and are pumping articles on how its going to crash.

Meanwhile

 

[NVGator]

Is that an exponential curve? Do we need to flatten the curve?

 

[Bernardo de la Paz]

Yes, I posted about it in the other thread. Son #1 almost doubled his money yesterday and he's followed the main Reddit thread for a year. Here's the screenshot of the main guy's account yesterday. He started with $50K a year ago, only GME plays.

The $5 million cash position is from previous GME plays?

 

[Concrete Helmet]

I've never watched Bloomberg(tv)before but I can't turn it off...every host on there seems pissed and keeps mentioning the word illegal...even comparing it to the"attack" on the capital. They just had Scaramucci on there as a guest....I guess he took it in the ass pretty good today with his capital group.....

 

[bradgator2]

AMC caught my eye several weeks ago. It has been absolutely pummeled during the last year. And it got down to $1.90. I think was on a Friday. So I made a mental note to buy some the next Monday. When I finally got around to checking in on Monday, the damn thing was at $2.85. I even mentioned it in the chatbox. So I put in an order for 1000 shares at $2.50. It didn’t get there. It got down to $2.60 that afternoon.

That $2500 could have been worth $16,000-$19,000 today. Barely 5 days later. I would have just been in the right place at the right time. But it didnt happen over 10 cents. Owell.

 

[Concrete Helmet]

The other thing is this is stealing Apples big thunder....

 

[Detroitgator]

The $5 million cash position is from previous GME plays?

Yes, he started the GME account with $50K.

 

[Musclepug]

 

[Detroitgator]

Yes, I posted about it in the other thread. Son #1 almost doubled his money yesterday and he's followed the main Reddit thread for a year. Here's the screenshot of the main guy's account yesterday. He started with $50K a year ago, only GME plays.

UPDATE: he's still 100% in. Account now at $47.9MM.

 

[BMF]

Portnoy is funny AF and he does not GAF!

 

[FireFoley]

Then don't do it!

FWIW, I wouldn't touch GME right now. The "smartest" play right now would be to set up conditional orders for its inevitable crash to reality. That said, good luck trying to short sell it, I doubt anyone on here is using a trading platform that would have any available short positions. You could buy puts, but, "fire bad!" It's now below its 21, 50, and 100 moving averages, so it's likely rolling over, but I would stay away... ALL the algos are on it now.

Given the amount of volume GME has been trading, IMO it has to be more than just some small time guys trading 100 or 200 shares at a time. I watch many different ECN's and there is no size on the bids or offers and the spreads are wide, so trade at your own risks. Regarding the idea of shorting the stock, it is almost impossible for any regular guy to borrow and the interest costs are high. Regarding buying puts, even those that are way out of the money, the premiums are just way too high for my liking. But it is fun watching and I have seen this rodeo before.

 

[Musclepug]

Theres a ground swell out there.
Tomorrow buy nokia and amc

 

[Gatormac2112]

Yeah, premiums for 1 contract on GME are around $20k. Thats nuts.

Monday morning I was going to buy a call with a strike price of $70 for .60 (or $60), put the order in off the option chain waiting for the markets to open, when the markets opened the strike price was 4.20 (or $420) so I didn't pull the trigger.

$60 or $420....either way I would've made $27,000+ in 2 days

 

[Musclepug]

Damn...I feel for ya, I couldn't hit you with a facepalm too

 

[soflagator]

Given the amount of volume GME has been trading, IMO it has to be more than just some small time guys trading 100 or 200 shares at a time. I watch many different ECN's and there is no size on the bids or offers and the spreads are wide, so trade at your own risks. Regarding the idea of shorting the stock, it is almost impossible for any regular guy to borrow and the interest costs are high. Regarding buying puts, even those that are way out of the money, the premiums are just way too high for my liking. But it is fun watching and I have seen this rodeo before.

Not ready to write a couple thousand 380 calls?