3 ms·

Wouldn't shock me if it were both

by adenadel 6y ago

UncleMeat 6y ago
Yeah I'm not sure I've ever felt as old as I feel today. I just don't get it.
- bedobi 6y ago
  here's my understanding (which may be wrong, and this isn't financial advice or a recommendation) if the stock is at $20 and you think it will go to $10 you can sell the stock at $20 (even if you actually don't own the stock, and never actually gave the buyer the stock, it's more like a promise that you will deliver the stock at some point) so now you've pocketed $20 and you're waiting for the stock to go down to $10 then, you can buy it for $10 and deliver the stock since you got paid $20, but you only paid $10 for the stock, you've made $10 this is called shorting people have been shorting to the point the number of stocks that are promised to be delivered is 140% of the actual number of stocks this means that, when those who promised to deliver stocks are actually called in to deliver the stocks they already sold for $20 (or whatever price they shorted at) they need to buy up 140% of the stocks in existence needless to say, there are not enough stocks to enable them to cover their shorts and this creates an insane spiral positive feedback loop in the price none of it has anything to do with fundamentals of the business, their dividends, balance sheets etc it's purely an artifact of a quirk state the stock has gotten into the funny thing is it's dumb retail investors who spotted it and kind of all jumped on in at the same time we like the stock! if and when the shorters are truly called in on their promises to deliver the stocks they shorted they will have to fight over an extremely limited supply of stocks, due to the nature of them having sold 140% of the stocks in existence AND us retail investors who have vacuumed up what little was for sale anyway (only a fraction of all stocks in existence are ever up for sale in the first place, so think of it like us vacuuming them all up and leaving them in a position where they have to deliver 140% of the stocks in existence when only a few percent of them are for sale = lol
  - UncleMeat 6y ago
    I get the mechanics of the short squeeze. That's easy. What I don't get is the memes. WSB has millions of subscribers and appears to be a combination of a weird nihilistic wasteland, populist anger, memes and jokes, and a few people getting rich. What the heck is that?
    - solarkraft 6y ago
      A lot of fun - specifically the thrill of mixing pretty serious topics like economic existence with purely silly memery.
    - bedobi 6y ago
      Ah, apologies, I didn't mean to be a wise ass! I agree /r/wallstreetbets is hard to grasp :P I'm just along for the ride

Wouldn't shock me if it were both

UncleMeat 6y ago

Yeah I'm not sure I've ever felt as old as I feel today. I just don't get it.

bedobi 6y ago
here's my understanding (which may be wrong, and this isn't financial advice or a recommendation) if the stock is at $20 and you think it will go to $10 you can sell the stock at $20 (even if you actually don't own the stock, and never actually gave the buyer the stock, it's more like a promise that you will deliver the stock at some point) so now you've pocketed $20 and you're waiting for the stock to go down to $10 then, you can buy it for $10 and deliver the stock since you got paid $20, but you only paid $10 for the stock, you've made $10 this is called shorting people have been shorting to the point the number of stocks that are promised to be delivered is 140% of the actual number of stocks this means that, when those who promised to deliver stocks are actually called in to deliver the stocks they already sold for $20 (or whatever price they shorted at) they need to buy up 140% of the stocks in existence needless to say, there are not enough stocks to enable them to cover their shorts and this creates an insane spiral positive feedback loop in the price none of it has anything to do with fundamentals of the business, their dividends, balance sheets etc it's purely an artifact of a quirk state the stock has gotten into the funny thing is it's dumb retail investors who spotted it and kind of all jumped on in at the same time we like the stock! if and when the shorters are truly called in on their promises to deliver the stocks they shorted they will have to fight over an extremely limited supply of stocks, due to the nature of them having sold 140% of the stocks in existence AND us retail investors who have vacuumed up what little was for sale anyway (only a fraction of all stocks in existence are ever up for sale in the first place, so think of it like us vacuuming them all up and leaving them in a position where they have to deliver 140% of the stocks in existence when only a few percent of them are for sale = lol
- UncleMeat 6y ago
  I get the mechanics of the short squeeze. That's easy. What I don't get is the memes. WSB has millions of subscribers and appears to be a combination of a weird nihilistic wasteland, populist anger, memes and jokes, and a few people getting rich. What the heck is that?
  - solarkraft 6y ago
    A lot of fun - specifically the thrill of mixing pretty serious topics like economic existence with purely silly memery.
  - bedobi 6y ago
    Ah, apologies, I didn't mean to be a wise ass! I agree /r/wallstreetbets is hard to grasp :P I'm just along for the ride