4 ms·

> Well if a stock market crash triggered by this is realistic (which I agree is), doesn't it make sense to hold a bit of GME for insurance What is the reasonin

> Well if a stock market crash triggered by this is realistic (which I agree is), doesn't it make sense to hold a bit of GME for insurance What is the reasoning here? Are you under the impression GME wouldn't crash right alongside the market? This isn't BTC or gold we're talking about. It's just another stock.

yreg 6y ago
Presumably the crash would occur after the GME price skyrockets and shorts (and then their brokers and clearing houses) go broke trying to close the short positions. The insurance pays up if they buy your share. Do you have another idea how it could end?
- SpicyLemonZest 6y ago
  It could end by simply crashing without shorts going broke. There's not much reason to believe a larger short squeeze is forthcoming.
  - yreg 6y ago
    Why would that crash the entire stock market?
    - SpicyLemonZest 6y ago
      The theory I've seen is that there could be hidden systemic risks here. If GME tanks suddenly, there's some possibility that traders bailing out of their trades will take down Robinhood (who doesn't seem to be very healthy right now), and a major broker collapsing is never gonna be great for the market. I share your skepticism that it would actually happen this way, but it seems at least somewhat plausible.
      - girvo 6y ago
        Robinhood are tiny on the brokerage stage. Important to retail, barely matter otherwise. That’s my understanding at least
        deleted 6y ago
        [deleted]
        SpicyLemonZest 6y ago
        That seems consistent with what I've read recently. Good news.
      - lwigo 6y ago
        It's got nothing to do with Robinhood. If a hedge decides to cover the short so they don't have to admit defeat and go bankrupt, then the entire market goes down because they'll end up selling thousands of unrelated shares for their cover.
        SpicyLemonZest 6y ago
        You've fallen victim to some common misinformation that's spreading. Multiple hedge funds have already been able to cover their shorts, and there's not much reason to believe this will change.
        lwigo 6y ago
        Not an endorsement but this was retweeted by Kai Ryssdal: https://twitter.com/TheStalwart/status/1355531873896824834 https://twitter.com/TheStalwart/status/1355531873896824834
- deleted 6y ago
  [deleted]
leadingthenet 6y ago
> Are you under the impression GME wouldn't crash right alongside the market? Well ... yeah. Today it hasn't.
- tinyhouse 6y ago
  We all know why it hasn't. Do you really believe it will last forever? or even 6 months from now? People are trying to make money. Once the momentum slows down the big sell off will start and nobody would be able to stop it. Not DFV or even the biggest troll of all, mr. Elon Musk.
  - leadingthenet 6y ago
    Forever is a long time. No, I do not believe it will last forever, or even six months. I do believe it will last at least one more week, though, yeah. And I'm putting money where my mouth is. The best part in all of this is that you're free to short it if you disagree. See where that leads you.
    - tinyhouse 6y ago
      So you basically agree with me. You still wrote your last paragraph. That is because you're invested emotionally in this. Never shorted a stock in my life. Not going to start now. I cannot predict when this will stop. Nither can you. What currently holds everything together is the unknown. People don't know who, when, and how the shorter s are going to close their positions. Once things will clear out I predict it's gonna be the beginning of the end. Just to be clear. I don't think it will crash to nothing any time soon. It will keep trading much higher than what it was pre this saga. When I say crash I mean down around 70-80% from its current value of $330.

yreg 6y ago

Presumably the crash would occur after the GME price skyrockets and shorts (and then their brokers and clearing houses) go broke trying to close the short positions. The insurance pays up if they buy your share. Do you have another idea how it could end?

SpicyLemonZest 6y ago
It could end by simply crashing without shorts going broke. There's not much reason to believe a larger short squeeze is forthcoming.
- yreg 6y ago
  Why would that crash the entire stock market?
  - SpicyLemonZest 6y ago
    The theory I've seen is that there could be hidden systemic risks here. If GME tanks suddenly, there's some possibility that traders bailing out of their trades will take down Robinhood (who doesn't seem to be very healthy right now), and a major broker collapsing is never gonna be great for the market. I share your skepticism that it would actually happen this way, but it seems at least somewhat plausible.
    - girvo 6y ago
      Robinhood are tiny on the brokerage stage. Important to retail, barely matter otherwise. That’s my understanding at least
      - deleted 6y ago
        [deleted]
      - SpicyLemonZest 6y ago
        That seems consistent with what I've read recently. Good news.
    - lwigo 6y ago
      It's got nothing to do with Robinhood. If a hedge decides to cover the short so they don't have to admit defeat and go bankrupt, then the entire market goes down because they'll end up selling thousands of unrelated shares for their cover.
      - SpicyLemonZest 6y ago
        You've fallen victim to some common misinformation that's spreading. Multiple hedge funds have already been able to cover their shorts, and there's not much reason to believe this will change.
        lwigo 6y ago
        Not an endorsement but this was retweeted by Kai Ryssdal: https://twitter.com/TheStalwart/status/1355531873896824834 https://twitter.com/TheStalwart/status/1355531873896824834
deleted 6y ago
[deleted]

leadingthenet 6y ago

> Are you under the impression GME wouldn't crash right alongside the market? Well ... yeah. Today it hasn't.

tinyhouse 6y ago
We all know why it hasn't. Do you really believe it will last forever? or even 6 months from now? People are trying to make money. Once the momentum slows down the big sell off will start and nobody would be able to stop it. Not DFV or even the biggest troll of all, mr. Elon Musk.
- leadingthenet 6y ago
  Forever is a long time. No, I do not believe it will last forever, or even six months. I do believe it will last at least one more week, though, yeah. And I'm putting money where my mouth is. The best part in all of this is that you're free to short it if you disagree. See where that leads you.
  - tinyhouse 6y ago
    So you basically agree with me. You still wrote your last paragraph. That is because you're invested emotionally in this. Never shorted a stock in my life. Not going to start now. I cannot predict when this will stop. Nither can you. What currently holds everything together is the unknown. People don't know who, when, and how the shorter s are going to close their positions. Once things will clear out I predict it's gonna be the beginning of the end. Just to be clear. I don't think it will crash to nothing any time soon. It will keep trading much higher than what it was pre this saga. When I say crash I mean down around 70-80% from its current value of $330.