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> "This isn't investing, this is gambling" Yep. Agreed. Spot-on. That's what Wall St does. If you don't like it, try and stop it. But for everyone, including t

> "This isn't investing, this is gambling" Yep. Agreed. Spot-on. That's what Wall St does. If you don't like it, try and stop it. But for everyone, including the hedge funds. Treating the derivatives markets like a casino (and taxing appropriately) sounds like a great idea.

parhamn 6y ago
I get this knee jerk reaction but there is something to be said about the risk analysis, sophistication, etc of said hedge funds. They’re not gambling in the same sense, but sure in some sense they are. Even having an entry level “risk model” is more sophistication than most home traders. You can’t just dismiss all that as nothing.
- Splendor 6y ago
  Yet somehow they've been outwitted by a bunch of Redittors. Maybe you're giving them to much credit.
  - betterunix2 6y ago
    A handful of speculators were hurt. Now the WSB crowd is facing a large loss -- and guess who they are losing all that money to? You can bet that hedge funds with "dry powder" jumped on the opportunity to take short positions on GME as they watched the price and implied volatility balloon. All the people buying options and buying the underlying stock -- who do you think they were buying from?
    - WorldMaker 6y ago
      Which is why the squeeze will be fascinating if a high percentage of the WSB crowd really are going long.
- EpicEng 6y ago
  These clowns shorted 170% of float. If that's not pure gambling teetering on market manipulation, I don't know what is.
  - nsator 6y ago
    It's mostly just one hedge fund. It would be an overgeneralization to call all hedge fund clowns...
    - Ataraxy 6y ago
      Similar to calling all retail investors amateurs.
      - nsator 6y ago
        I didn't but a large portion of retail investors are likely amateurs.
        Ataraxy 6y ago
        Oh I know you didn't I was just pointing out the parallel to the point being made. :) Similarly the majority of people trading options are gamblers.
    - EpicEng 6y ago
      "These clowns" e.g. Citron and Melvin Capital. I know.
  - viro 6y ago
    Bruh, lets be honest its GameStop. That company IS going the way of blockbuster. "pure gambling" is a stretch everyone can read the tea leaves here. Honestly pre-covid when was the last time you went into a GameStop and saw more than two other people.
    - yifanl 6y ago
      Its going bankrupt in the medium term if nothing changes, but that ratio of shorts would only make sense if it was going bankrupt in a quarter or two, where Gamestop actually rallied on revenue with the release of the new console generation.
- slg 6y ago
  Or to put it another way, there is a difference between being a skilled poker player and sitting down at table in hopes of winning fairly versus doing what the MIT Blackjack Team did. That isn't to say that traditional Wall Street people haven't done anything wrong in the past or are in the right in any way here. It is simply pointing out there is a big spectrum in "its all gambling" and this activity seems like it is closer to the MIT Blackjack side.
- WorldMaker 6y ago
  Risk analysis and sophistication are in no way orthogonal to gambling. They are hallmarks of gambling at the highest levels. Horse handicapping among horse racing gamblers is extremely similar in every form to the stock market. Even "simple" games like poker have extraordinarily complex risk analysis schemes at the highest levels and you can listen to all sorts of stuff in the World Series of Poker broadcast commentary alone.
boxed 6y ago
Seems like throwing out the baby with the bathwater. Many derivatives are just insurance.
mathattack 6y ago
Derivatives involves a lot of betting. It also involves legitimate hedging. A farmer can lock in their revenue, and a manufacturing company can lock in exchange rates.

parhamn 6y ago

I get this knee jerk reaction but there is something to be said about the risk analysis, sophistication, etc of said hedge funds. They’re not gambling in the same sense, but sure in some sense they are. Even having an entry level “risk model” is more sophistication than most home traders. You can’t just dismiss all that as nothing.

Splendor 6y ago
Yet somehow they've been outwitted by a bunch of Redittors. Maybe you're giving them to much credit.
- betterunix2 6y ago
  A handful of speculators were hurt. Now the WSB crowd is facing a large loss -- and guess who they are losing all that money to? You can bet that hedge funds with "dry powder" jumped on the opportunity to take short positions on GME as they watched the price and implied volatility balloon. All the people buying options and buying the underlying stock -- who do you think they were buying from?
  - WorldMaker 6y ago
    Which is why the squeeze will be fascinating if a high percentage of the WSB crowd really are going long.
EpicEng 6y ago
These clowns shorted 170% of float. If that's not pure gambling teetering on market manipulation, I don't know what is.
- nsator 6y ago
  It's mostly just one hedge fund. It would be an overgeneralization to call all hedge fund clowns...
  - Ataraxy 6y ago
    Similar to calling all retail investors amateurs.
    - nsator 6y ago
      I didn't but a large portion of retail investors are likely amateurs.
      - Ataraxy 6y ago
        Oh I know you didn't I was just pointing out the parallel to the point being made. :) Similarly the majority of people trading options are gamblers.
  - EpicEng 6y ago
    "These clowns" e.g. Citron and Melvin Capital. I know.
- viro 6y ago
  Bruh, lets be honest its GameStop. That company IS going the way of blockbuster. "pure gambling" is a stretch everyone can read the tea leaves here. Honestly pre-covid when was the last time you went into a GameStop and saw more than two other people.
  - yifanl 6y ago
    Its going bankrupt in the medium term if nothing changes, but that ratio of shorts would only make sense if it was going bankrupt in a quarter or two, where Gamestop actually rallied on revenue with the release of the new console generation.
slg 6y ago
Or to put it another way, there is a difference between being a skilled poker player and sitting down at table in hopes of winning fairly versus doing what the MIT Blackjack Team did. That isn't to say that traditional Wall Street people haven't done anything wrong in the past or are in the right in any way here. It is simply pointing out there is a big spectrum in "its all gambling" and this activity seems like it is closer to the MIT Blackjack side.
WorldMaker 6y ago
Risk analysis and sophistication are in no way orthogonal to gambling. They are hallmarks of gambling at the highest levels. Horse handicapping among horse racing gamblers is extremely similar in every form to the stock market. Even "simple" games like poker have extraordinarily complex risk analysis schemes at the highest levels and you can listen to all sorts of stuff in the World Series of Poker broadcast commentary alone.

boxed 6y ago

Seems like throwing out the baby with the bathwater. Many derivatives are just insurance.

mathattack 6y ago

Derivatives involves a lot of betting. It also involves legitimate hedging. A farmer can lock in their revenue, and a manufacturing company can lock in exchange rates.