As an ex fund guy: - I think he's right, it's other funds pushing it, not the little WSB people. But the funds that pushed the squeeze probably had a good eye

As an ex fund guy: - I think he's right, it's other funds pushing it, not the little WSB people. But the funds that pushed the squeeze probably had a good eye on WSB. At least it would make sense as a place to coordinate the buying, with the useful benefit that you don't even need to say anything, you just bet that other funds are reading it too and seeing the same names. - It does seem like RH ran out of collateral at the clearinghouse, forcing them to shut down buying. Probably not so smart from a business point of view. - I'm not sure market makers do that well out of the squeeze. You want someone to buy at 101 and someone else to sell at 99 all day, not buybuybuy. You'll end up selling 101, 102, 103... until you have a huge position averaging a sell at 110 when the market is 120. Options market making as well, yes you can sell at implieds above the market but with that short gamma you hurt yourself in the squeeze. Having said that there's probably some MMs who've done great from it, depends a lot on how you model it. - The reason Citadel likes to buy order flow is not that they have some cunning plan to screw everyone who comes through the RH pipe, it's more mundane. Normally a bunch of retail punters are not smart, and they're not coordinated. Some guy comes in, buys something. Another guy comes and sells something. Market maker takes that spread, happy days, they can even give you a discount because they win a lot that way. What they are trying to avoid is toxic flow. That's when some guy who knows he's going to move the market comes in and does that thing I mentioned above... buybuybuy, MM is left sad and short when the market is up massively. Luckily that fund shark guy doesn't use the RH app, he hides in the institutional broker world, maybe he has direct market access too. So by buying the RH flow, the MM avoids getting eaten by the shark, and that's worth something, because shark guy can really bite you. - He's right about it being dumb to short a thing that's already massively shorted. There's an implicit skewness in return in that it's the kind of strategy that is likely to win you a lot of little wins with the occasional catastrophic loss. Melvin probably got away with it many times before this happened. - There's nothing inherently wrong with shorting a stock. It's useful to be able to exchange risks, which is what trading is about. If you think it's going up, you want there to be people who think it's going down, so you can swap risks. Yes, there are complexities around naked shorting, but let's not get into that. - He tries to mix in the money printing and stimulus, but I don't think it really belongs in this story. That has many facets other than this particular thing.