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WSB is mostly buying options - not stocks directly and cashing out now (or at some top that could be in the future). The people on WSB that sold their call opt
by onlyrealcuzzo 6y ago
WSB is mostly buying options - not stocks directly and cashing out now (or at some top that could be in the future).
The people on WSB that sold their call options and made a killing are selling those options to other people on WSB who (likely) will lose everything. And the ones with diamond hands who haven't sold yet will (likely) lose everything.
So - this is like penny stock sellers in the 90s. Some little guys made a killing. Lots of little guys lost most of their savings.
It's not like all the little guys are going to win and Melvin Capital is the one paying the bill. It's like Melvin Capital went bankrupt, and some little guys on Reddit fooled a bunch of other Redditors into giving them a bunch of money.
- Aperocky 6y agowell, the short sellers contributed. WSB and other investors pocketed the 5 billion from those people. And I assume some diamond hands on WSB will end up losing everything. It's easy to understand why everyone is HODL in WSB, since that's the position you want others to hold whether you want to sell or hold. Won't surprise me if half already exited.