3 ms·

Matt Levine said it well about this non-story: "[DiIorio] then decided to put $100,000 of his own money into a penny-stock company that supposedly made computer

Matt Levine said it well about this non-story: "[DiIorio] then decided to put $100,000 of his own money into a penny-stock company that supposedly made computer chips. ("I bought this company on hype," he says.) The company then announced a reverse merger with a travel company, because that is how things go in the penny stock world; corporate identities are pretty fluid. The stock soared, and then lost almost all of its value. "DiIorio took a loss from the peak stock value of well over $1 million," though I am not sure why you'd measure his losses that way."

kgwgk 10y ago
You cut the quote right before the best bit: "DiIorio prided himself on being a savvy trader," for some reason that passes human understanding, (...)
oneloop 10y ago
I don't think it's a non-story the fact that some market participants can short sell non-existent amounts of stocks. Is this common knowledge? Did everyone already know this but me?
- wcummings 10y ago
  The CEO of Overstock has been loudly complaining about naked shorts for a while https://www.overstock.com/naked-short-selling.html https://www.overstock.com/naked-short-selling.html
- cloudjacker 10y ago
  Yes? I mean software engineers don't typically know, as well as everyone that abstractly dismisses the finance profession because "those guys have no souls and destroy the economy" But there's allot of interesting nuances there and knowledge is power
imaginenore 10y ago
That story doesn't make any sense. If he bought $100K in stock, he can't lose more than $100K, and even for that its price would have to go to zero.
- totalZero 10y ago
  The million dollars he mentions is a mark-to-market loss versus the peak value of the position. Many traders think about stock in terms of current market value, rather than the initial investment or the number of shares. However, this doesn't mean that a trader would have been able to sell a million dollars worth of stock at that peak price, without substantially pushing the stock price lower.

kgwgk 10y ago

You cut the quote right before the best bit: "DiIorio prided himself on being a savvy trader," for some reason that passes human understanding, (...)

oneloop 10y ago

I don't think it's a non-story the fact that some market participants can short sell non-existent amounts of stocks. Is this common knowledge? Did everyone already know this but me?

wcummings 10y ago
The CEO of Overstock has been loudly complaining about naked shorts for a while https://www.overstock.com/naked-short-selling.html https://www.overstock.com/naked-short-selling.html
cloudjacker 10y ago
Yes? I mean software engineers don't typically know, as well as everyone that abstractly dismisses the finance profession because "those guys have no souls and destroy the economy" But there's allot of interesting nuances there and knowledge is power

imaginenore 10y ago

That story doesn't make any sense. If he bought $100K in stock, he can't lose more than $100K, and even for that its price would have to go to zero.

totalZero 10y ago
The million dollars he mentions is a mark-to-market loss versus the peak value of the position. Many traders think about stock in terms of current market value, rather than the initial investment or the number of shares. However, this doesn't mean that a trader would have been able to sell a million dollars worth of stock at that peak price, without substantially pushing the stock price lower.