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Hedgefunds overstepped and now if you own a share of GME they are required to buy it back from you at any price. They made that contract when they shorted. They

Hedgefunds overstepped and now if you own a share of GME they are required to buy it back from you at any price. They made that contract when they shorted. They planned nobody would notice or care. Now every person who notices and does the most rudimentary hello world market action (buying a stock) hurts them. This could only happen in the context of the audacious 140% shorts. This is the type of shenanigan people are referring to.

dcolkitt 6y ago
A high short interest is not a sign of any sort of malfeasance. There’s no upper limit of shorting, since shares can be borrowed, sold, then borrowed again. Short interest above 100% is perfectly fine. Stocks can and do go over this imaginary line, without any fraud involved. It just means that many people disagree about the price. Allowing speculators to build up large short positions is a good thing, because it helps prevents overpriced bubble from forming. Read the actual academic research from my original look comment. If a hedge fund is willing to take the risky and thankless job of taking a large and concentrated short position, the public should be thanking them for their contribution to market efficiency.
- gmaster1440 6y ago
  There is nothing inherently wrong in short interest above 100%, as you point out. There is no disagreement from me that it's possible to both have large short interest and at the same time have healthy economic activity devoid of fraud. The core of the social movement here is an asymmetry in who gets to engage in audacious economic transactions. Is it reserved exclusively for the institutions we should be thanking for maintaining the pillars of our society? Maybe if a fund decides to take out an audacious short position, retail investors should be able to have an equal and opposite reaction to it. The suppression from trading platforms and the asymmetric response here is only supporting the cause of the movement, and not helping with getting us closer to "thanking" the funds.
  - notahacker 6y ago
    Anyone is able to have opposite reaction to an audacious economic transaction, it just takes a lot of retail traders to have an opposite reaction to one hedge fund. So even if the hedge fund's audacious bet is horribly wrong, the smart money reacts and profits before the crowd can coordinate their pile on. Hedge funds bet against other hedge funds too. The asymmetry is who loses, and unlike the hedge funds with dreadful risk management, most of the retail traders piling in this week won't have mansions and yachts to go back to after their bad bet turns sour.
    - gmaster1440 6y ago
      This is exactly where I will agree 100% with you, and why my original comment is more cautionary than optimistic.

dcolkitt 6y ago

A high short interest is not a sign of any sort of malfeasance. There’s no upper limit of shorting, since shares can be borrowed, sold, then borrowed again. Short interest above 100% is perfectly fine. Stocks can and do go over this imaginary line, without any fraud involved. It just means that many people disagree about the price. Allowing speculators to build up large short positions is a good thing, because it helps prevents overpriced bubble from forming. Read the actual academic research from my original look comment. If a hedge fund is willing to take the risky and thankless job of taking a large and concentrated short position, the public should be thanking them for their contribution to market efficiency.

gmaster1440 6y ago
There is nothing inherently wrong in short interest above 100%, as you point out. There is no disagreement from me that it's possible to both have large short interest and at the same time have healthy economic activity devoid of fraud. The core of the social movement here is an asymmetry in who gets to engage in audacious economic transactions. Is it reserved exclusively for the institutions we should be thanking for maintaining the pillars of our society? Maybe if a fund decides to take out an audacious short position, retail investors should be able to have an equal and opposite reaction to it. The suppression from trading platforms and the asymmetric response here is only supporting the cause of the movement, and not helping with getting us closer to "thanking" the funds.
- notahacker 6y ago
  Anyone is able to have opposite reaction to an audacious economic transaction, it just takes a lot of retail traders to have an opposite reaction to one hedge fund. So even if the hedge fund's audacious bet is horribly wrong, the smart money reacts and profits before the crowd can coordinate their pile on. Hedge funds bet against other hedge funds too. The asymmetry is who loses, and unlike the hedge funds with dreadful risk management, most of the retail traders piling in this week won't have mansions and yachts to go back to after their bad bet turns sour.
  - gmaster1440 6y ago
    This is exactly where I will agree 100% with you, and why my original comment is more cautionary than optimistic.