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Is there any evidence they won't just figure a way to ride this out until it crashes. It's going to crash and when that happens it's going to be the "little guy

by Rapzid 6y ago

Is there any evidence they won't just figure a way to ride this out until it crashes. It's going to crash and when that happens it's going to be the "little guy" that bought late holding the bag.

andyzweb 6y ago
something something the market can remain irrational longer than you can stay solvent
JumpCrisscross 6y ago
> won't just figure a way to ride this out until it crashes For one, the calls look like they’re still overpriced relative to the puts. So manufacturing calls via put-call parity would be a starting point. (Spot checked the puts—they seem to break even under 100 per share out to November, so not much juice left there.) It’s also only the leveraged funds burning out. And they don’t only own GameStop shorts. So money will be made bailing them out and cramming down their existing LPs. This kind of a pyramidesque system almost guarantees that the most pain will be felt in the reversion to the mean, not flexion from it.
300bps 6y ago
If they had infinite money they could do this. But shorting a stock is usually done on margin and if you lose enough money on a short position you’ll get a margin call asking you to deposit more money with your broker. If you don’t do that they’ll buy to cover your position for you.
tootie 6y ago
They already have. They closed their position and got a cash infusion from other investment firms. They will move on and be fine. Meanwhile aside from a handful of savvy players, WSB is going to leave a wake of people losing their nest eggs.
- Rapzid 6y ago
  Ah, interesting. I guess it just got to be too much for them. I just see a wake of losers all around from. Melvin's Hedge Fund? There are people and their portfolios behind that taking a hit. Few people got in early and are seeing multiples in returns. Now they are on WSB "Now is the time to rebuy, GME to 1000$, GME to the moon!!!" because they needs loads of suckers to throw in late to keep propping the price up. But the later comers are going to lose their shirts. The whole "Robin Hood" narrative is weird. Let's call a spade a spade; a few people are going to get rich at the expense of a lot of individuals over these shenanigans.
  - tootie 6y ago
    I was thinking the same, but GME is up 114% today. Anyone who bought on the hype chain yesterday just made a killing.
    - Rapzid 6y ago
      If they sold. But if everybody were selling it wouldn't go up. It's when it goes down that people lose their shirt. Too hot to make big money off ATM IMHO. 114% is nothing considering the risk.
- pwinnski 6y ago
  They claim to have closed their position, but haven't had to demonstrate that. On the one hand, closing their position would have been the smart thing to do. On the other hand, claiming to have closed your position (but not having done it) would have been a smart thing to do, and cheaper if people believed it. r/WSB does not seem to believe it. I believe we should know for sure one way or the other by Saturday, but I could be wrong about that.

by Rapzid 6y ago

Is there any evidence they won't just figure a way to ride this out until it crashes. It's going to crash and when that happens it's going to be the "little guy" that bought late holding the bag.

andyzweb 6y ago

something something the market can remain irrational longer than you can stay solvent

JumpCrisscross 6y ago

> won't just figure a way to ride this out until it crashes For one, the calls look like they’re still overpriced relative to the puts. So manufacturing calls via put-call parity would be a starting point. (Spot checked the puts—they seem to break even under 100 per share out to November, so not much juice left there.) It’s also only the leveraged funds burning out. And they don’t only own GameStop shorts. So money will be made bailing them out and cramming down their existing LPs. This kind of a pyramidesque system almost guarantees that the most pain will be felt in the reversion to the mean, not flexion from it.

300bps 6y ago

If they had infinite money they could do this. But shorting a stock is usually done on margin and if you lose enough money on a short position you’ll get a margin call asking you to deposit more money with your broker. If you don’t do that they’ll buy to cover your position for you.

tootie 6y ago

They already have. They closed their position and got a cash infusion from other investment firms. They will move on and be fine. Meanwhile aside from a handful of savvy players, WSB is going to leave a wake of people losing their nest eggs.

Rapzid 6y ago
Ah, interesting. I guess it just got to be too much for them. I just see a wake of losers all around from. Melvin's Hedge Fund? There are people and their portfolios behind that taking a hit. Few people got in early and are seeing multiples in returns. Now they are on WSB "Now is the time to rebuy, GME to 1000$, GME to the moon!!!" because they needs loads of suckers to throw in late to keep propping the price up. But the later comers are going to lose their shirts. The whole "Robin Hood" narrative is weird. Let's call a spade a spade; a few people are going to get rich at the expense of a lot of individuals over these shenanigans.
- tootie 6y ago
  I was thinking the same, but GME is up 114% today. Anyone who bought on the hype chain yesterday just made a killing.
  - Rapzid 6y ago
    If they sold. But if everybody were selling it wouldn't go up. It's when it goes down that people lose their shirt. Too hot to make big money off ATM IMHO. 114% is nothing considering the risk.
pwinnski 6y ago
They claim to have closed their position, but haven't had to demonstrate that. On the one hand, closing their position would have been the smart thing to do. On the other hand, claiming to have closed your position (but not having done it) would have been a smart thing to do, and cheaper if people believed it. r/WSB does not seem to believe it. I believe we should know for sure one way or the other by Saturday, but I could be wrong about that.