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I don't understand why so many people feel the urge to psycho-analyze a publicly available subreddit that currently has 8.2m million subscribers. I can just rea

I don't understand why so many people feel the urge to psycho-analyze a publicly available subreddit that currently has 8.2m million subscribers. I can just read it an make up my own mind. It would be one thing if they provided specific links, but most of the time it's just wild generalization. As far as coverage, I liked this explanation of internal mechanics of stock trading: https://rumble.com/vdf437-gamestop-and-short-squeezes-with-andrew-wang-and-chris-wang-of-runnymede-ca.html https://rumble.com/vdf437-gamestop-and-short-squeezes-with-a... I also enjoyed watching Rossmann's take on the whole thing: https://odysee.com/@rossmanngroup:a https://odysee.com/@rossmanngroup:a Reddit is just one small piece of the system that this even is occurring in.

ajross 6y ago
> I don't understand why so many people feel the urge to psycho-analyze a publicly available subreddit that currently has 8.2m million subscribers. Because we're genuinely curious how such a large and seemingly well-connected community could have been so mind-bogglingly wrong about something ("how short trading works") that should have been an unambiguous truth. Even now I'm still seeing people screaming about "hold the line" and inserting endless rocket emojis as the stock drops below 35% of its peak. People are still arguing on this very site that all that is needed is for the WSB community to refuse to sell to cause some kind of magical short call that isn't coming. People still insist that short leverage greater than 100% means an infinite price spike at some point in the indefinite future. People still think that the short leverage staying high (on a very clearly inflated stock!) means that the early players didn't exit positions. This was a scam. I mean, we don't know exactly by who yet, but it's abundantly clear that all these people were lied to to get them to buy a security that was just obviously a target of a pump and dump.
- amoitnga 6y ago
  what is the truth though? As someone who only knows about stocks from 'big short' film and 5min video on youtube and wsb thread. I genuinely curious what are the ways this could play out. is there a deadline on short sellers to close their positions? what is reasonable limit for the stock to go to? what happens if hypothetically nobody of wsb would sell their stocks?
  - ajross 6y ago
    So, a short squeeze is a real thing. The stock going up means that the people holding an underwater short need to rush to buy to close their positions before they go farther underwater. This then makes the stock go up faster. That's indeed what happened last week. But you don't need to buy back all the stock, just enough such that you have enough flexibility to hold the stock across the inevitable peak and drop. In a consumer brokerage, this generally takes the form of a "margin call" and the brokerage will often buy stock for you out of your margin so they don't get caught holding the bag, and eventually can seize your whole portfolio to make themselves whole (the regulations there get complicated and I'm not expert). It's an absolute thing, and you lose all your money. But that's not how it works for a hedge fund, the nature of which is to have access to financing regular people don't. They can just cut a deal with bigger players to get through, and that's how Melvin seems to have managed this. To be clear: Melvin made an outrageously inappropriate bet, got caught, and lots a ton of money. But they're out now and the story is over. Now GME is just a bubble like any other bubble, fed by naive investors believing it will go up when it won't. As far as "what happens if WSB doesn't sell?", the answer is nothing. WSB doesn't hold the full capitalization of GME. There are plenty of other shares out there being traded, and the price of those trades is what you see on the ticker.
    - amoitnga 6y ago
      > But they're out now and the story is over some say they are, some say they aren't. Is this in fact true? > WSB doesn't hold the full capitalization of GME does anybody know how much does wsb hold approximately? very rough number would still be interesting to know.
      - blackearl 6y ago
        It's hard to say because every source I can find shows institutional ownership is 120-160% and I don't know how it's possible to own more than 100% of a thing. I suppose that could all be the short positions leading up to the recent drama.
        6y ago
- WJW 6y ago
  > we don't know exactly by who yet, but it's abundantly clear that all these people were lied to We definitely know who lied to most of these people: themselves. They let themselves get swept away in a tide of rocket emoji and never stopped to think about (or cared to learn about) the mechanics of the trading situation. Sure there are a few exceptions (this /u/deepfuckingvalue seems to know what he's doing, several others too), but I'd wager that 99% of the 6 million new subscribers were either seeing red with "fuck Wall Street" fury or green with greed.
- toast0 6y ago
  Have you been in the presence of a large community before? People turn their brains off in large groups. It's even harder when it turns into a crowd and people are cheering on whatever is happening. Especially if there's moderation removing any messages of dissent. Add in that short interest data is either not timely from the every two weeks official report, or incomplete/of unknown accuracy from the third party reports. And that anyway, it doesn't have any indication of what price the shorts sold for, and it's easy to see how people saw 130% short interest a few weeks ago and turned it into a squeeze, and see 130% short interest at the end of last week, and it's not squeezing anymore. Shorts @ $20 got out (at a high cost), and new shorts @ $300 got in, so the reportable short interest is the same, but the new shorts are probably getting out soon at a high profit.
- polka_haunts_us 6y ago
  From my perspective, one of my friends daily posts idiotic, factless garbage in our discord. He doesn't trade stocks but reads Reddit religiously. He constantly says he has no investment in either side but what do I think about (Citadel blackmailing Robinhood or some such garbage). I am thoroughly convinced that if he weren't currently jobless and lacking bonus money, he would've bought GME at 300, thinking it was going to the moon. I think the core issue is, there is a significant number of people who only get their news from what is upvoted on Reddit, and what is upvoted on Reddit not only has no correlation with actuality, factuality, or reality, it also follows a lot of really nasty biases due to the upvote system. For example, another chat I'm in with a lot of Europeans had this one Portuguese guy last March posting daily fear mongering about the US burning down from Covid. I finally figured out after a week of it that all his headlines were coming from the Covid subreddit. I went and looked, the top 80 stories were all US based. No mention of Italy, Spain, UK, or any other European countries who were having similar rates at the time. I'm not convinced this guy even realized Covid existed in Europe at the time. The moral of the story is, if you're going to try to form an opinion on something you know nothing about, you NEED to consider at least 2 different positions, and a lot of these people who fell into the conspiracy trap only considered 1. (And yes, even though Reddit is an aggregator, it is just 1 source).
- stopChanging 6y ago
  You sure talk in certain terms. I would think someone claiming to understand the issue at such a more sophisticated level than WSB would know better than to think one can fully understand the situation. Regardless of the outcome, there was a pile of gold to be made with your certainty if there was any credibility to back it up. Do you have a finance background and relevant expertise, or are you just another armchair critic getting his word in...looking at where the price has moved and arguing "of course it has!". in this case, what makes you any different from those you're condescending? It's new territory for all of us, why pretend otherwise?
  - deleted 6y ago
    [deleted]
- zzbzq 6y ago
  > Even now I'm still seeing people screaming about "hold the line" and inserting endless rocket emojis I've been saying of WSB since before this debacle exploded, these are bots. The same bots that have run many other meme-y subreddits like r/the_donald, the same bots that are kingmakers on twitch. Spamming emoji-laden slogans as non-sequitur replies to comments nested 3 layers deep is a telltale sign. I can't be the only one who sees this? Maybe the whole internet is bots. Maybe I'm the only non-bot.
- goatinaboat 6y ago
  Because we're genuinely curious how such a large and seemingly well-connected community could have been so mind-bogglingly wrong about something ("how short trading works") that should have been an unambiguous truth. Now do HN’s collective beliefs about startups...
- totalZero 6y ago
  I see it differently. The GME situation highlighted disparities in market access and shed light upon loopholes in short-selling regulations (including the bona-fide market-maker exemption) that allow market participants to sell delta that they can't find. I also think the caveat of using the epithet "pump and dump" is that you should have some evidence that the initial information was false or misleading. As it turns out, Melvin was extremely short, as were others, and everyone who got involved prior to the squeeze had ample opportunity to make money. Not every hyped name that rallies immensely and then sells off aggressively is a "pump and dump." The stock is still up 20x in a year.
2ion 6y ago
They're having fun running sentiment analysis on themselves and building an index out of it.
rozab 6y ago
Furthermore, WSB today is just a pile of bots and newbies who heard about it on local news. It isn't representative of the WSB who caused this in the first place. There's been several announcements by the mods about really bad bot activity, with examples promoting both sides. https://twitter.com/EpsilonTheory/status/1355526361570541572 https://twitter.com/EpsilonTheory/status/1355526361570541572

ajross 6y ago

> I don't understand why so many people feel the urge to psycho-analyze a publicly available subreddit that currently has 8.2m million subscribers. Because we're genuinely curious how such a large and seemingly well-connected community could have been so mind-bogglingly wrong about something ("how short trading works") that should have been an unambiguous truth. Even now I'm still seeing people screaming about "hold the line" and inserting endless rocket emojis as the stock drops below 35% of its peak. People are still arguing on this very site that all that is needed is for the WSB community to refuse to sell to cause some kind of magical short call that isn't coming. People still insist that short leverage greater than 100% means an infinite price spike at some point in the indefinite future. People still think that the short leverage staying high (on a very clearly inflated stock!) means that the early players didn't exit positions. This was a scam. I mean, we don't know exactly by who yet, but it's abundantly clear that all these people were lied to to get them to buy a security that was just obviously a target of a pump and dump.

amoitnga 6y ago
what is the truth though? As someone who only knows about stocks from 'big short' film and 5min video on youtube and wsb thread. I genuinely curious what are the ways this could play out. is there a deadline on short sellers to close their positions? what is reasonable limit for the stock to go to? what happens if hypothetically nobody of wsb would sell their stocks?
- ajross 6y ago
  So, a short squeeze is a real thing. The stock going up means that the people holding an underwater short need to rush to buy to close their positions before they go farther underwater. This then makes the stock go up faster. That's indeed what happened last week. But you don't need to buy back all the stock, just enough such that you have enough flexibility to hold the stock across the inevitable peak and drop. In a consumer brokerage, this generally takes the form of a "margin call" and the brokerage will often buy stock for you out of your margin so they don't get caught holding the bag, and eventually can seize your whole portfolio to make themselves whole (the regulations there get complicated and I'm not expert). It's an absolute thing, and you lose all your money. But that's not how it works for a hedge fund, the nature of which is to have access to financing regular people don't. They can just cut a deal with bigger players to get through, and that's how Melvin seems to have managed this. To be clear: Melvin made an outrageously inappropriate bet, got caught, and lots a ton of money. But they're out now and the story is over. Now GME is just a bubble like any other bubble, fed by naive investors believing it will go up when it won't. As far as "what happens if WSB doesn't sell?", the answer is nothing. WSB doesn't hold the full capitalization of GME. There are plenty of other shares out there being traded, and the price of those trades is what you see on the ticker.
  - amoitnga 6y ago
    > But they're out now and the story is over some say they are, some say they aren't. Is this in fact true? > WSB doesn't hold the full capitalization of GME does anybody know how much does wsb hold approximately? very rough number would still be interesting to know.
    - blackearl 6y ago
      It's hard to say because every source I can find shows institutional ownership is 120-160% and I don't know how it's possible to own more than 100% of a thing. I suppose that could all be the short positions leading up to the recent drama.
      - 6y ago
WJW 6y ago
> we don't know exactly by who yet, but it's abundantly clear that all these people were lied to We definitely know who lied to most of these people: themselves. They let themselves get swept away in a tide of rocket emoji and never stopped to think about (or cared to learn about) the mechanics of the trading situation. Sure there are a few exceptions (this /u/deepfuckingvalue seems to know what he's doing, several others too), but I'd wager that 99% of the 6 million new subscribers were either seeing red with "fuck Wall Street" fury or green with greed.
toast0 6y ago
Have you been in the presence of a large community before? People turn their brains off in large groups. It's even harder when it turns into a crowd and people are cheering on whatever is happening. Especially if there's moderation removing any messages of dissent. Add in that short interest data is either not timely from the every two weeks official report, or incomplete/of unknown accuracy from the third party reports. And that anyway, it doesn't have any indication of what price the shorts sold for, and it's easy to see how people saw 130% short interest a few weeks ago and turned it into a squeeze, and see 130% short interest at the end of last week, and it's not squeezing anymore. Shorts @ $20 got out (at a high cost), and new shorts @ $300 got in, so the reportable short interest is the same, but the new shorts are probably getting out soon at a high profit.
polka_haunts_us 6y ago
From my perspective, one of my friends daily posts idiotic, factless garbage in our discord. He doesn't trade stocks but reads Reddit religiously. He constantly says he has no investment in either side but what do I think about (Citadel blackmailing Robinhood or some such garbage). I am thoroughly convinced that if he weren't currently jobless and lacking bonus money, he would've bought GME at 300, thinking it was going to the moon. I think the core issue is, there is a significant number of people who only get their news from what is upvoted on Reddit, and what is upvoted on Reddit not only has no correlation with actuality, factuality, or reality, it also follows a lot of really nasty biases due to the upvote system. For example, another chat I'm in with a lot of Europeans had this one Portuguese guy last March posting daily fear mongering about the US burning down from Covid. I finally figured out after a week of it that all his headlines were coming from the Covid subreddit. I went and looked, the top 80 stories were all US based. No mention of Italy, Spain, UK, or any other European countries who were having similar rates at the time. I'm not convinced this guy even realized Covid existed in Europe at the time. The moral of the story is, if you're going to try to form an opinion on something you know nothing about, you NEED to consider at least 2 different positions, and a lot of these people who fell into the conspiracy trap only considered 1. (And yes, even though Reddit is an aggregator, it is just 1 source).
stopChanging 6y ago
You sure talk in certain terms. I would think someone claiming to understand the issue at such a more sophisticated level than WSB would know better than to think one can fully understand the situation. Regardless of the outcome, there was a pile of gold to be made with your certainty if there was any credibility to back it up. Do you have a finance background and relevant expertise, or are you just another armchair critic getting his word in...looking at where the price has moved and arguing "of course it has!". in this case, what makes you any different from those you're condescending? It's new territory for all of us, why pretend otherwise?
- deleted 6y ago
  [deleted]
zzbzq 6y ago
> Even now I'm still seeing people screaming about "hold the line" and inserting endless rocket emojis I've been saying of WSB since before this debacle exploded, these are bots. The same bots that have run many other meme-y subreddits like r/the_donald, the same bots that are kingmakers on twitch. Spamming emoji-laden slogans as non-sequitur replies to comments nested 3 layers deep is a telltale sign. I can't be the only one who sees this? Maybe the whole internet is bots. Maybe I'm the only non-bot.
goatinaboat 6y ago
Because we're genuinely curious how such a large and seemingly well-connected community could have been so mind-bogglingly wrong about something ("how short trading works") that should have been an unambiguous truth. Now do HN’s collective beliefs about startups...
totalZero 6y ago
I see it differently. The GME situation highlighted disparities in market access and shed light upon loopholes in short-selling regulations (including the bona-fide market-maker exemption) that allow market participants to sell delta that they can't find. I also think the caveat of using the epithet "pump and dump" is that you should have some evidence that the initial information was false or misleading. As it turns out, Melvin was extremely short, as were others, and everyone who got involved prior to the squeeze had ample opportunity to make money. Not every hyped name that rallies immensely and then sells off aggressively is a "pump and dump." The stock is still up 20x in a year.

2ion 6y ago

They're having fun running sentiment analysis on themselves and building an index out of it.

rozab 6y ago

Furthermore, WSB today is just a pile of bots and newbies who heard about it on local news. It isn't representative of the WSB who caused this in the first place. There's been several announcements by the mods about really bad bot activity, with examples promoting both sides. https://twitter.com/EpsilonTheory/status/1355526361570541572 https://twitter.com/EpsilonTheory/status/1355526361570541572