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This was me. I lost money on GME betting on the fact that more shorted shares still had to be covered. The short squeeze wasn't a complete failure. It happened

This was me. I lost money on GME betting on the fact that more shorted shares still had to be covered. The short squeeze wasn't a complete failure. It happened, it was just much smaller than many predicted. I still wonder what would've happened if Robinhood didn't shut off demand by preventing people from buying shares. My investment thesis didn't foresee this happening. I don't think anyone did. The other large part of the problem was that a lot of people, including myself, were going off of stale short interest data. Updated estimates for GME were reported to be 39% of float vs +100% on 1 Feb [1]. Hedge funds pay for more accurate data which us retail investors don't get visibility on. It's over for now, but please bear this in mind when talking to people that may have lost money on this. Some people did some research, knew the risk and allocated money they were willing to lose. I learned a lot along the way, it might make some hedge funds think twice about aggressively shorting a stock, and it was just plain fun to be part of it. [1] https://www.bloomberg.com/news/articles/2021-02-01/gamestop-short-interest-plummets-in-a-sign-traders-are-covering https://www.bloomberg.com/news/articles/2021-02-01/gamestop-... Edit: updated short interest data stats and link.

acover 6y ago
Note that is the short interest ratio which is different than short interest. Your link shows no data available for short interest.
cwyers 6y ago
Can I suggest that if you couldn't foresee the chance of a trading halt in a massive short squeeze like this, then your risk modelling wasn't as sophisticated as you seem to think it was?
compiler-guy 6y ago
That a small-time broker (as is Robin Hood) wouldn't have enough capital to cover a giant short-squeeze was entirely foreseeable by people who understand what it takes to successfully execute one. Big players know that when they plan big market moves, they need to notify their brokers in advance, so the broker can prepare. What we had here was a bunch of retail investors who are somewhat more informed than the average retail investor, but not well versed in the nuts and bolts of the maneuver they were involved in, and therefore the executed it without sufficient planning.
FabHK 6y ago
Also, I think to execute a short squeeze successfully, it is by no means sufficient that the outstanding short interest exceeds 100% - that boundary has no significance. I think what is required is that you control long interest of 100% or more of the net shares (or float). (The shorts being > 100% is neither necessary nor sufficient for that.)
dwaltrip 6y ago
It seems accurate information on short interest, etc, is very important for investors. Why can’t this be updated as often as possible (e.g at least daily) for the public?

acover 6y ago

Note that is the short interest ratio which is different than short interest. Your link shows no data available for short interest.

cwyers 6y ago

Can I suggest that if you couldn't foresee the chance of a trading halt in a massive short squeeze like this, then your risk modelling wasn't as sophisticated as you seem to think it was?

compiler-guy 6y ago

That a small-time broker (as is Robin Hood) wouldn't have enough capital to cover a giant short-squeeze was entirely foreseeable by people who understand what it takes to successfully execute one. Big players know that when they plan big market moves, they need to notify their brokers in advance, so the broker can prepare. What we had here was a bunch of retail investors who are somewhat more informed than the average retail investor, but not well versed in the nuts and bolts of the maneuver they were involved in, and therefore the executed it without sufficient planning.

FabHK 6y ago

Also, I think to execute a short squeeze successfully, it is by no means sufficient that the outstanding short interest exceeds 100% - that boundary has no significance. I think what is required is that you control long interest of 100% or more of the net shares (or float). (The shorts being > 100% is neither necessary nor sufficient for that.)

dwaltrip 6y ago

It seems accurate information on short interest, etc, is very important for investors. Why can’t this be updated as often as possible (e.g at least daily) for the public?