6 ms·

> For them to win this they need to keep putting more money into the fire which pulls in bigger and bigger fish. This isn't true. The institutions with Short E

> For them to win this they need to keep putting more money into the fire which pulls in bigger and bigger fish. This isn't true. The institutions with Short Exposure are connected to the institutions who buy Robinhood data and perform high frequency trading on those orders. Citadel and Melvin can BUY GME themselves to mitigate the risks. It is likely that a substantial amount of GME is being held by the institutions who had short exposure. It's basic risk mitigation. The high frequency traders who have the Robinhood data are making money on every Buy GME order and will make money on every sell when this bubble collapses. It is wrong to present this as a populist uprising. This is an incredible fluctuation, a hilarious anomaly, but it is nothing more than that. It will have no lasting impact. I firmly believe that the hedge funds that held GME short positions have bought into GME to mitigate their exposure. They likely bought in algorithmically using robinhood data and are making money off of retail right now. My message to the people here: /r/wallstreetbets is not a gameshark. You are still playing their game. You are still playing a rigged game and you are still losing.

boringg 6y ago
> This isn't true. The institutions with Short Exposure are connected to the institutions who buy Robinhood data and perform high frequency trading on those orders. Citadel and Melvin can BUY GME themselves to mitigate the risks. It is likely that a substantial amount of GME is being held by the institutions who had short exposure. It's basic risk mitigation. -- They would have to do this at great cost and loss (rumor mill has it at current loss of $4B). If you believe the reports in the media Melvin has had to go ask for money from other institutions. Thus bigger fish would now be involved as they are putting money out to Melvin. > The high frequency traders who have the Robinhood data are making money on every Buy GME order and will make money on every sell when this bubble collapses. -- Agreed i said as much in my comment that people will make money on it - some retail some institutionals. > It is wrong to present this as a populist uprising. -- Disagree. This is a trade that at its core is a sentiment of disenfranchisement, anger at wall street short sellers, financial establishment - and of course with the hope of making money. > This is an incredible fluctuation, a hilarious anomaly, but it is nothing more than that. It will have no lasting impact. - Agree - most likely - it will however make wallstreet institutional short sellers think more carefully about their positions. There will be impacts but doubtful anything transcendent on the markets. If anything SEC will investigate Wallstreetbets traders as opposed to doing anything to Wall street (which has been having carte blanche under the last administration's effort to neuter the SEC). > I firmly believe that the hedge funds that held GME short positions have bought into GME to mitigate their exposure. They likely bought in algorithmically using robinhood data and are making money off of retail right now. -- Might be, however the losses they took at the beginning on their position were pretty steep to jump right back into the pool. > My message to the people here: /r/wallstreetbets is not a gameshark. You are still playing their game. You are still playing a rigged game and you are still losing. -- I don't think anyone has allusions that the tables have turned. This is more like the chance for this one time give a giant F U to wallstreet who has been perceived to be making money off the backs of the population without any care at all from retail investors.
- majormajor 6y ago
  How much of "wall street" would lose major money off this? Just a few hedge funds? Is that even that meaningful in the long run or big picture?
  - jermeh 6y ago
    It's worth noting that these funds blowing up causes large sell-offs of their other holdings, which can in turn cause prices of those assets to fall. Falling prices can cause more sell-offs, and can spiral. Nobody really knows what's going to happen as a result of this since it's pretty unprecedented. IIRC the SPX is down ~3% and VIX is up 60% today.
    - majormajor 6y ago
      "A few firms losing a bet can spiral into huge effects," if true, sounds like a really, really, really good argument for eliminating higher-risk instruments. "We don't know how bad things we could get if we are wrong" means you're doing something you shouldn't be.
- nightowl_games 6y ago
  Fair assessment. I am just pushing back at the narrative that this is a "win" for the little guy and a "loss" for wall street. Retail investors putting money into the market _at all_ is a net win for wall street _every time_ imo.
  - boringg 6y ago
    Don't disagree with you - the markets are heavily balanced in favor of entrenched players who have informational, scale and timing advantages (ie wall street). I do think that there's something else at play here ... we will have to see what happens over the next couple of weeks as things shake out.
  - boringg 6y ago
    Also - Citron has already said that they will take this trade into account in how they allocate in the future. I don't think this will really change anything though.
DennisP 6y ago
> It is likely that a substantial amount of GME is being held by the institutions who had short exposure. To some extent, sure, but bear in mind the total short exposure was 140% of the total GME shares.
smm11 6y ago
Tell that to the guy up $31 million.
reissbaker 6y ago
"Melvin and Citadel can BUY GME themselves to mitigate the risk." Melvin buying GME is not "mitigating," it's closing the short position. If you close your short position high, you got screwed and you lost money. They did close it recently... At a massive loss. "I firmly believe that the hedge funds that held GME short positions have bought into GME to mitigate their exposure. They likely bought in algorithmically using robinhood data and are making money off of retail right now." How... Would "making money off of retail" in a pernicious sense be possible right now? If a retail trader on WSB bought in at $20, and sold at $200, they got 1000% ROI on their trades. Do you think that a bank secretly snuck in greater than 1000% ROI? The WSB trader got 1000% ROI, but the bank got 2000% ROI on the set of trades? The stock would have to be trading at $600 and the bank secretly pocketed $400 for that to happen. Sure, the HFT front-run orders. But they are constantly buying and selling the shares they trade, they're not just buying. They don't get the buy-and-hold wins that the slow retail traders got off of a rally like this. HFT make money by providing liquidity, not by buying and holding GME. Also, just as a technicality, Melvin is not a high frequency trader. They are not the same people front-running Robinhood orders. Melvin lost big time. "My message to the people here: ... you are still losing" My message to the people here: if you got >1000% ROI, you won. Don't let randos on HN make you feel bad. (Close your position though.)
- trianglem 6y ago
  No, if Melvin is buying calls they are not covering. They are making a profit they can use to mitigate their losses covering later.
- kasey_junk 6y ago
  Citadel invested in Melvin this week on the cheap. Citadel is the main internalizer for Robinhood. I don’t think it changes much about your post but the connection between HFT and Melvin is public and directly financially relevant.
  - voteflipper 6y ago
    Citadel != Citadel Securities
mancerayder 6y ago
> My message to the people here: /r/wallstreetbets is not a gameshark. You are still playing their game. You are still playing a rigged game and you are still losing. I understand your sentiment but that's a pretty overbroad assessment. There are obviously non-pro traders people killing it, and a lot more than a blip, tons of people have bought and sold out of their positions, average schmoes. There will be a ton of bagholders and losers, and expired options "Loss Porn". But to say that EVERYONE is a loser in a rigged game is too bold a statement. Maybe, Most will be losers in the rigged game.

boringg 6y ago

> This isn't true. The institutions with Short Exposure are connected to the institutions who buy Robinhood data and perform high frequency trading on those orders. Citadel and Melvin can BUY GME themselves to mitigate the risks. It is likely that a substantial amount of GME is being held by the institutions who had short exposure. It's basic risk mitigation. -- They would have to do this at great cost and loss (rumor mill has it at current loss of $4B). If you believe the reports in the media Melvin has had to go ask for money from other institutions. Thus bigger fish would now be involved as they are putting money out to Melvin. > The high frequency traders who have the Robinhood data are making money on every Buy GME order and will make money on every sell when this bubble collapses. -- Agreed i said as much in my comment that people will make money on it - some retail some institutionals. > It is wrong to present this as a populist uprising. -- Disagree. This is a trade that at its core is a sentiment of disenfranchisement, anger at wall street short sellers, financial establishment - and of course with the hope of making money. > This is an incredible fluctuation, a hilarious anomaly, but it is nothing more than that. It will have no lasting impact. - Agree - most likely - it will however make wallstreet institutional short sellers think more carefully about their positions. There will be impacts but doubtful anything transcendent on the markets. If anything SEC will investigate Wallstreetbets traders as opposed to doing anything to Wall street (which has been having carte blanche under the last administration's effort to neuter the SEC). > I firmly believe that the hedge funds that held GME short positions have bought into GME to mitigate their exposure. They likely bought in algorithmically using robinhood data and are making money off of retail right now. -- Might be, however the losses they took at the beginning on their position were pretty steep to jump right back into the pool. > My message to the people here: /r/wallstreetbets is not a gameshark. You are still playing their game. You are still playing a rigged game and you are still losing. -- I don't think anyone has allusions that the tables have turned. This is more like the chance for this one time give a giant F U to wallstreet who has been perceived to be making money off the backs of the population without any care at all from retail investors.

majormajor 6y ago
How much of "wall street" would lose major money off this? Just a few hedge funds? Is that even that meaningful in the long run or big picture?
- jermeh 6y ago
  It's worth noting that these funds blowing up causes large sell-offs of their other holdings, which can in turn cause prices of those assets to fall. Falling prices can cause more sell-offs, and can spiral. Nobody really knows what's going to happen as a result of this since it's pretty unprecedented. IIRC the SPX is down ~3% and VIX is up 60% today.
  - majormajor 6y ago
    "A few firms losing a bet can spiral into huge effects," if true, sounds like a really, really, really good argument for eliminating higher-risk instruments. "We don't know how bad things we could get if we are wrong" means you're doing something you shouldn't be.
nightowl_games 6y ago
Fair assessment. I am just pushing back at the narrative that this is a "win" for the little guy and a "loss" for wall street. Retail investors putting money into the market _at all_ is a net win for wall street _every time_ imo.
- boringg 6y ago
  Don't disagree with you - the markets are heavily balanced in favor of entrenched players who have informational, scale and timing advantages (ie wall street). I do think that there's something else at play here ... we will have to see what happens over the next couple of weeks as things shake out.
- boringg 6y ago
  Also - Citron has already said that they will take this trade into account in how they allocate in the future. I don't think this will really change anything though.

DennisP 6y ago

> It is likely that a substantial amount of GME is being held by the institutions who had short exposure. To some extent, sure, but bear in mind the total short exposure was 140% of the total GME shares.

smm11 6y ago

Tell that to the guy up $31 million.

reissbaker 6y ago

"Melvin and Citadel can BUY GME themselves to mitigate the risk." Melvin buying GME is not "mitigating," it's closing the short position. If you close your short position high, you got screwed and you lost money. They did close it recently... At a massive loss. "I firmly believe that the hedge funds that held GME short positions have bought into GME to mitigate their exposure. They likely bought in algorithmically using robinhood data and are making money off of retail right now." How... Would "making money off of retail" in a pernicious sense be possible right now? If a retail trader on WSB bought in at $20, and sold at $200, they got 1000% ROI on their trades. Do you think that a bank secretly snuck in greater than 1000% ROI? The WSB trader got 1000% ROI, but the bank got 2000% ROI on the set of trades? The stock would have to be trading at $600 and the bank secretly pocketed $400 for that to happen. Sure, the HFT front-run orders. But they are constantly buying and selling the shares they trade, they're not just buying. They don't get the buy-and-hold wins that the slow retail traders got off of a rally like this. HFT make money by providing liquidity, not by buying and holding GME. Also, just as a technicality, Melvin is not a high frequency trader. They are not the same people front-running Robinhood orders. Melvin lost big time. "My message to the people here: ... you are still losing" My message to the people here: if you got >1000% ROI, you won. Don't let randos on HN make you feel bad. (Close your position though.)

trianglem 6y ago
No, if Melvin is buying calls they are not covering. They are making a profit they can use to mitigate their losses covering later.
kasey_junk 6y ago
Citadel invested in Melvin this week on the cheap. Citadel is the main internalizer for Robinhood. I don’t think it changes much about your post but the connection between HFT and Melvin is public and directly financially relevant.
- voteflipper 6y ago
  Citadel != Citadel Securities

mancerayder 6y ago

> My message to the people here: /r/wallstreetbets is not a gameshark. You are still playing their game. You are still playing a rigged game and you are still losing. I understand your sentiment but that's a pretty overbroad assessment. There are obviously non-pro traders people killing it, and a lot more than a blip, tons of people have bought and sold out of their positions, average schmoes. There will be a ton of bagholders and losers, and expired options "Loss Porn". But to say that EVERYONE is a loser in a rigged game is too bold a statement. Maybe, Most will be losers in the rigged game.