11 ms·

> So basically like almost every other trade? No; most trades are traded because you expect when you're "left holding the bag" that bag will have money in it.

throw0101a 6y ago
You can expect whatever you want. What actually happens is something else. On any given trade you can end up with something worth more or less than what you started with. Even if you sell and cash out, you may end up "losing" because things went on to perform better than you expected and the person/entity on the other end of the trade knew something you didn't. The market owes you nothing.
- JohnHaugeland 6y ago
  You're loudly and carefully missing the point. The expectation is that investment is done to derive ownership of something with actual value. This is a public pump and dump scheme masquerading as a righteous uprising. Nobody said the market owed anyone anything. Save the sophism. Idiots are getting bilked, those are the answer to your question, and they still exist even if you want to re-define around them. This is illegal for a reason.
  - na85 6y ago
    It didn't start as a pump and dump. It started last year with a guy who invested progressively more because he felt it was undervalued based on fundamentals. Whether or not Elon's tweet brought in a bunch of people who want it to be a pump and dump is another story.
    - wolverine876 6y ago
      What was Elon's tweet? I don't really follow these things, sorry.
      - dorkwood 6y ago
        He tweeted "Gamestonk!!"
    - shrimpx 6y ago
      The scheme was already well underway when Elon tweeted.
      - na85 6y ago
        I mean it's a bunch of people memeing on a stock. To call it a scheme isn't really accurate.
        shrimpx 6y ago
        True. But it’s more than memeing a stock. They’re doing it knowing that these hedge funds will have to gobble up stock to close their shorts.
  - throw0101a 6y ago
    IMHO nothing you said contradicts with anything I said. People are free to buy or not-buy any stock, and to sell or not-sell any stock that they already hold. Everyone trading is an adult and is free to do it (notwithstanding things like insider trading, etc). There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. Some of those people are/will be making money through these actions and some are/will be losing money. As Nick Maggiulli recently posted (on a somewhat unrelated topic): > If it wasn’t obvious before, it bears repeating now—some people are going to beat you at investing. Some of them will be dumber than you. Some will be less knowledgable. Some will even be completely wrong about the future. But they will beat you just the same. There is no great arbiter of justice in the investment world. There is no cosmic force that ensures that only the knowledgable make money. If there were, then I would be a far richer man today. * https://ofdollarsanddata.com/let-them-vote/ https://ofdollarsanddata.com/let-them-vote/ As someone who rides a motorcycle, I think it's stupid not to wear helmet, gloves, etc., and yet in Michigan it's legal to ride without a helmet. IMHO it's dumb, but many people do it and ¯\_(ツ)_/¯ Currently some people think GME is worth US$347.51 per share and are willing to pay for it. ¯\_(ツ)_/¯ It's their money and they can do whatever they want with it. I invest in index and bond funds (80/20), but if someone wants to YOLO on this: not my circus, not my monkeys.
    - PaulDavisThe1st 6y ago
      > There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. Not to contradict you, but just a reminder that short selling is based on something significantly different than "trading and holding stocks". The ability to promise to buy/sell stocks in the future at a given price has become so accepted as an ordinary feature of stock trading that we generally cease to notice how revolutionary of a concept it actually is. It's hard to see any rationale for prohibiting such arrangements - they are entirely consensual, and appear to have no additional impact on things that instantaneous buy/sell orders wouldn't also have. But this is an illusion. The ability to go short/long on a stock is completely different from the ability to buy/sell it, despite it being based on all the same mechanisms. It's a truly radical concept that has slipped under our radar because it could be described without any new concepts or terms.
  - ameister14 6y ago
    >The expectation is that investment is done to derive ownership of something with actual value. Since this started with a hedge fund shorting 140% of a company, I tend to disagree.
    - throw0101a 6y ago
      This! I don't know why the story is with Reddit/WSB. What kind of incompetent fools are these "professionals" that their risk departments didn't flag this? And if it was flagged: who allowed the over ride and allowed it to go through? The fact that the rest of the market (Reddit/WSB or anyone) caught these funds with their pants down simply shows that The Market® works: a short squeeze is simply a reaction to too much demand and not enough supply.
    - deleted 6y ago
      [deleted]
  - strken 6y ago
    I'm not convinced this is any less moral than e.g. George Soros famously exploiting Britain's central bank[0], HFT firms building their own microwave towers to do arbitrage and totally-not-front-running a fraction of a second faster[1], or basically anything other strategy that's lauded as brilliant when a rich man does it. [0] https://www.forbes.com/sites/steveschaefer/2015/07/07/forbes-flashback-george-soros-british-pound-euro-ecb/?sh=2289a3b66131 https://www.forbes.com/sites/steveschaefer/2015/07/07/forbes... [1] https://www.bloomberg.com/news/features/2019-03-08/the-gazillion-dollar-standoff-over-two-high-frequency-trading-towers https://www.bloomberg.com/news/features/2019-03-08/the-gazil...
    - astrange 6y ago
      Flash Boys sold front running as something bad for regular people, but you can only front run someone like Goldman Sachs. A retail trader just makes one trade at a time, he isn’t trading in multiple blocks and has nothing to front run. All HFT does for you is fulfill your trade in less than a day and get some market making fees.
      - tomatocracy 6y ago
        I haven't read Flash Boys but if it describes HFT as front running then it's just incorrect. "Front running" doesn't just mean "getting there quicker than someone else". It is a specific conflict of interest problem where the same people or firm are acting in more than one capacity - agent and principal or agent for different parties - at the same time (eg I see large customer order coming in then trade for myself/my firm before I trade for the client, potentially moving the market for them which would hurt them if our trades are both in the same direction).
    - darawk 6y ago
      Then you don't understand this, or any of the things you listed. George Soros noticed a mismatch of fundamental value. He pushed the price towards its fundamental value. These traders are pushing the price away from fundamental value, and they are doing so at the expense of other, later retail traders.
  - delaaxe 6y ago
    You're missing the point completely. Short squeezes have nothing to do with pump and dumps
6nf 6y ago
How do you know they don’t think that the GameStop bag will have money in it?
- fennecfoxen 6y ago
  It's possible they think so, but if they think it'll have money in it, after it lost money six of the last seven quarters, I'm not sure what they're smoking.
  - llampx 6y ago
    You could have said the same about $TSLA or $AMZN at some point in their history. If stocks were rational, TSLA shorts would have made money last year instead of losing billoins.
    - fennecfoxen 6y ago
      Neither Tesla nor Amazon went +10,000% in the space of a week. There's a long term bull case for Gamestop at the $5/share levels of August. There's a bull case for Gamestop at the $17/share levels of early January. I might not believe them personally, but someone can make that case without being insane. There's no bull case for Gamestop at $468.50 a share this moment as I type. There is no way that Gamestop goes from slightly negative EPS to $23/share earnings (a P/E of 20). And that's what it would take to put money in the bag. All that is here is a Ponzi scheme.
      - throw0101a 6y ago
        > There's no bull case for Gamestop at $468.50 a share this moment as I type. Yes there is. The bull case is for those people who have options contracts that they need to fulfill. If they do not fulfill those contracts there will be consequences: perhaps reputation loss, perhaps law suits, perhaps SEC investigations (with fines and/or jail time). For those people, GME at even at $1000/share may be "cheap" compared to the consequences they face.
EGreg 6y ago
Are you saying bubbles never form and the market value equals the underlying value of every asset? No speculators? Please. And these guys aren’t even taking money from those late to the party, so much as from the short sellers (vultures) who were happy to see the company go into the ground. Elon Musk hates short sellers with a passion. They try to sabotage a business. When trading is halted on a stock that is in freefall, I can understand that. But here they are halting a stock that is rising based on short squeezing! Honestly 148% naked shorting by private hedge funds should be illegal, and you’re gonna tell me that the government should side with the short sellers against a crowd of everyday people who are INVESTING INTO A COMPANY THEY LIKE? How exactly is wall street the little guy? They snap their fingers and get trillion dollar bailouts instantly. Regular people barely get a $1200 check. And now even speculative SHORT POSITIONS are supposed to be protected?? This sounds like how a casino finds out that a game has a loophole and then tells people they can’t actually keep their winnings. And the fourth wall is broken. Apparently hedge funds can short any stock and if regular people notice and beat them back, then it’s the speculative hedge fund that’s trying to kill the company, that should just go ahead eh. How dare regular folks threaten the tried and true methods of speculation?
hungryhobo 6y ago
Are you saying stocks are supposed to be riskless? And you are entitled to guaranteed gains?

throw0101a 6y ago

You can expect whatever you want. What actually happens is something else. On any given trade you can end up with something worth more or less than what you started with. Even if you sell and cash out, you may end up "losing" because things went on to perform better than you expected and the person/entity on the other end of the trade knew something you didn't. The market owes you nothing.

JohnHaugeland 6y ago
You're loudly and carefully missing the point. The expectation is that investment is done to derive ownership of something with actual value. This is a public pump and dump scheme masquerading as a righteous uprising. Nobody said the market owed anyone anything. Save the sophism. Idiots are getting bilked, those are the answer to your question, and they still exist even if you want to re-define around them. This is illegal for a reason.
- na85 6y ago
  It didn't start as a pump and dump. It started last year with a guy who invested progressively more because he felt it was undervalued based on fundamentals. Whether or not Elon's tweet brought in a bunch of people who want it to be a pump and dump is another story.
  - wolverine876 6y ago
    What was Elon's tweet? I don't really follow these things, sorry.
    - dorkwood 6y ago
      He tweeted "Gamestonk!!"
  - shrimpx 6y ago
    The scheme was already well underway when Elon tweeted.
    - na85 6y ago
      I mean it's a bunch of people memeing on a stock. To call it a scheme isn't really accurate.
      - shrimpx 6y ago
        True. But it’s more than memeing a stock. They’re doing it knowing that these hedge funds will have to gobble up stock to close their shorts.
- throw0101a 6y ago
  IMHO nothing you said contradicts with anything I said. People are free to buy or not-buy any stock, and to sell or not-sell any stock that they already hold. Everyone trading is an adult and is free to do it (notwithstanding things like insider trading, etc). There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. Some of those people are/will be making money through these actions and some are/will be losing money. As Nick Maggiulli recently posted (on a somewhat unrelated topic): > If it wasn’t obvious before, it bears repeating now—some people are going to beat you at investing. Some of them will be dumber than you. Some will be less knowledgable. Some will even be completely wrong about the future. But they will beat you just the same. There is no great arbiter of justice in the investment world. There is no cosmic force that ensures that only the knowledgable make money. If there were, then I would be a far richer man today. * https://ofdollarsanddata.com/let-them-vote/ https://ofdollarsanddata.com/let-them-vote/ As someone who rides a motorcycle, I think it's stupid not to wear helmet, gloves, etc., and yet in Michigan it's legal to ride without a helmet. IMHO it's dumb, but many people do it and ¯\_(ツ)_/¯ Currently some people think GME is worth US$347.51 per share and are willing to pay for it. ¯\_(ツ)_/¯ It's their money and they can do whatever they want with it. I invest in index and bond funds (80/20), but if someone wants to YOLO on this: not my circus, not my monkeys.
  - PaulDavisThe1st 6y ago
    > There is nothing illegal in the activities that I've seen: just people/institutions trading and holding stocks in an open market. Not to contradict you, but just a reminder that short selling is based on something significantly different than "trading and holding stocks". The ability to promise to buy/sell stocks in the future at a given price has become so accepted as an ordinary feature of stock trading that we generally cease to notice how revolutionary of a concept it actually is. It's hard to see any rationale for prohibiting such arrangements - they are entirely consensual, and appear to have no additional impact on things that instantaneous buy/sell orders wouldn't also have. But this is an illusion. The ability to go short/long on a stock is completely different from the ability to buy/sell it, despite it being based on all the same mechanisms. It's a truly radical concept that has slipped under our radar because it could be described without any new concepts or terms.
- ameister14 6y ago
  >The expectation is that investment is done to derive ownership of something with actual value. Since this started with a hedge fund shorting 140% of a company, I tend to disagree.
  - throw0101a 6y ago
    This! I don't know why the story is with Reddit/WSB. What kind of incompetent fools are these "professionals" that their risk departments didn't flag this? And if it was flagged: who allowed the over ride and allowed it to go through? The fact that the rest of the market (Reddit/WSB or anyone) caught these funds with their pants down simply shows that The Market® works: a short squeeze is simply a reaction to too much demand and not enough supply.
  - deleted 6y ago
    [deleted]
- strken 6y ago
  I'm not convinced this is any less moral than e.g. George Soros famously exploiting Britain's central bank[0], HFT firms building their own microwave towers to do arbitrage and totally-not-front-running a fraction of a second faster[1], or basically anything other strategy that's lauded as brilliant when a rich man does it. [0] https://www.forbes.com/sites/steveschaefer/2015/07/07/forbes-flashback-george-soros-british-pound-euro-ecb/?sh=2289a3b66131 https://www.forbes.com/sites/steveschaefer/2015/07/07/forbes... [1] https://www.bloomberg.com/news/features/2019-03-08/the-gazillion-dollar-standoff-over-two-high-frequency-trading-towers https://www.bloomberg.com/news/features/2019-03-08/the-gazil...
  - astrange 6y ago
    Flash Boys sold front running as something bad for regular people, but you can only front run someone like Goldman Sachs. A retail trader just makes one trade at a time, he isn’t trading in multiple blocks and has nothing to front run. All HFT does for you is fulfill your trade in less than a day and get some market making fees.
    - tomatocracy 6y ago
      I haven't read Flash Boys but if it describes HFT as front running then it's just incorrect. "Front running" doesn't just mean "getting there quicker than someone else". It is a specific conflict of interest problem where the same people or firm are acting in more than one capacity - agent and principal or agent for different parties - at the same time (eg I see large customer order coming in then trade for myself/my firm before I trade for the client, potentially moving the market for them which would hurt them if our trades are both in the same direction).
  - darawk 6y ago
    Then you don't understand this, or any of the things you listed. George Soros noticed a mismatch of fundamental value. He pushed the price towards its fundamental value. These traders are pushing the price away from fundamental value, and they are doing so at the expense of other, later retail traders.
- delaaxe 6y ago
  You're missing the point completely. Short squeezes have nothing to do with pump and dumps

6nf 6y ago

How do you know they don’t think that the GameStop bag will have money in it?

fennecfoxen 6y ago
It's possible they think so, but if they think it'll have money in it, after it lost money six of the last seven quarters, I'm not sure what they're smoking.
- llampx 6y ago
  You could have said the same about $TSLA or $AMZN at some point in their history. If stocks were rational, TSLA shorts would have made money last year instead of losing billoins.
  - fennecfoxen 6y ago
    Neither Tesla nor Amazon went +10,000% in the space of a week. There's a long term bull case for Gamestop at the $5/share levels of August. There's a bull case for Gamestop at the $17/share levels of early January. I might not believe them personally, but someone can make that case without being insane. There's no bull case for Gamestop at $468.50 a share this moment as I type. There is no way that Gamestop goes from slightly negative EPS to $23/share earnings (a P/E of 20). And that's what it would take to put money in the bag. All that is here is a Ponzi scheme.
    - throw0101a 6y ago
      > There's no bull case for Gamestop at $468.50 a share this moment as I type. Yes there is. The bull case is for those people who have options contracts that they need to fulfill. If they do not fulfill those contracts there will be consequences: perhaps reputation loss, perhaps law suits, perhaps SEC investigations (with fines and/or jail time). For those people, GME at even at $1000/share may be "cheap" compared to the consequences they face.

EGreg 6y ago

Are you saying bubbles never form and the market value equals the underlying value of every asset? No speculators? Please. And these guys aren’t even taking money from those late to the party, so much as from the short sellers (vultures) who were happy to see the company go into the ground. Elon Musk hates short sellers with a passion. They try to sabotage a business. When trading is halted on a stock that is in freefall, I can understand that. But here they are halting a stock that is rising based on short squeezing! Honestly 148% naked shorting by private hedge funds should be illegal, and you’re gonna tell me that the government should side with the short sellers against a crowd of everyday people who are INVESTING INTO A COMPANY THEY LIKE? How exactly is wall street the little guy? They snap their fingers and get trillion dollar bailouts instantly. Regular people barely get a $1200 check. And now even speculative SHORT POSITIONS are supposed to be protected?? This sounds like how a casino finds out that a game has a loophole and then tells people they can’t actually keep their winnings. And the fourth wall is broken. Apparently hedge funds can short any stock and if regular people notice and beat them back, then it’s the speculative hedge fund that’s trying to kill the company, that should just go ahead eh. How dare regular folks threaten the tried and true methods of speculation?

hungryhobo 6y ago

Are you saying stocks are supposed to be riskless? And you are entitled to guaranteed gains?