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Can someone explain how we're supposed to believe WSB can move the market that much? I mean, it's up against hedge funds etc with literal billions and we're sup

by nico_h 6y ago

Can someone explain how we're supposed to believe WSB can move the market that much? I mean, it's up against hedge funds etc with literal billions and we're supposed to believe a bunch of people on Robinhood can go against those higher power and cause them some inconvenience? The volume for GME today was like 89,734,235 vs an average of 24M . How does "retail" traders can keep the stock up 100% from the previous day for the second or third day running? And the stock went up 100% from close during after hours yesterday, and that is not retail traders.

svachalek 6y ago
No one is buying this stock because they want this junk company, it's all manipulation. They have an army of buyers and use some calculated techniques with options to gain leverage. They're not all college students in for $100. I know of people who have borrowed 6-digit sums to get in on this bet. Potentially there are also pros on the WSB side of this game but I think they would potentially face legal risks that the individuals don't have to worry about.
quantumElevator 6y ago
This is, I think, at the heart of the problem, and vastly unreported by mainstream media. In short I encourage you to look up the “nasdaq whale” trade from this past summer 2020, of soft bank fame. Butchering the premise, algorithms (algos) front run Robinhood options. This is how Robinhood makes money, selling this access to investment firms. These algos cause a compounding effect with those Robinhood trades. When combined with the compounding effect of a “melt up” in a short squeeze (described elsewhere in this thread), the effects are enormous. I believe WSB redditors stumbled upon this unintentionally, but the market effects are demonstrated at scale with the Nasdaq Whale trade (and the Essex boys crude oil crash before it). Whether you believe this is “right” perhaps should be informed by whether you believe a market where the majority (>50%) of trades are executed by computer algorithms reacting to preceding market moves most likely executed by computer algorithms. If ever more algorithms compound each other ad infinitum, can’t the market be manipulated by an ever smaller number of market participants, their motivations however perverse?

by nico_h 6y ago

svachalek 6y ago

No one is buying this stock because they want this junk company, it's all manipulation. They have an army of buyers and use some calculated techniques with options to gain leverage. They're not all college students in for $100. I know of people who have borrowed 6-digit sums to get in on this bet. Potentially there are also pros on the WSB side of this game but I think they would potentially face legal risks that the individuals don't have to worry about.

quantumElevator 6y ago

This is, I think, at the heart of the problem, and vastly unreported by mainstream media. In short I encourage you to look up the “nasdaq whale” trade from this past summer 2020, of soft bank fame. Butchering the premise, algorithms (algos) front run Robinhood options. This is how Robinhood makes money, selling this access to investment firms. These algos cause a compounding effect with those Robinhood trades. When combined with the compounding effect of a “melt up” in a short squeeze (described elsewhere in this thread), the effects are enormous. I believe WSB redditors stumbled upon this unintentionally, but the market effects are demonstrated at scale with the Nasdaq Whale trade (and the Essex boys crude oil crash before it). Whether you believe this is “right” perhaps should be informed by whether you believe a market where the majority (>50%) of trades are executed by computer algorithms reacting to preceding market moves most likely executed by computer algorithms. If ever more algorithms compound each other ad infinitum, can’t the market be manipulated by an ever smaller number of market participants, their motivations however perverse?