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It is pretty easy to tell that Melvin was lying through their teeth when they said this... the volume for them to cover was not there, and most estimates was th
by trsohmers 6y ago
It is pretty easy to tell that Melvin was lying through their teeth when they said this... the volume for them to cover was not there, and most estimates was that it would take 6-8 days for them to actually exit their position.
- nursur2011 6y agothe 6-8 days to cover is based on historical volume is my understanding. If volume spikes 10x in a day they cover much faster. Besides, this assumes 100% covering, why would they do that vs. just incrementally?
- pastrami_panda 6y agoThis was exactly my thinking, why wouldn't they utilize these days of extreme volume trading to their advantage. It's their bread and butter, no?
- nowherebeen 6y agoExactly. Hedge funds love volatility. They aren’t mutual funds. Hedge funds typically make the most and lose the most money during these times because they can take any side of the position as they see fit. People that invest in hedge funds know this.
- beagle3 6y agoThey are not magicians. They are on the losing side of what turned out to be a few billions dollar bet (real money. Not notional). They usually profit from switching side quickly or making informed bets you can’t easily make - like shorting stocks. Except, they dug too deep this time. We’re seeing another LTCM meltdown in process, albeit smaller and so far more contained.
- TuringNYC 6y agoBecause while volume went up the price did also, so it’s costing them 10x to 20x to cover.