12 ms·

GameStop Is Happening Again

121 points by kgwgk 6y ago

zpeti 6y ago
Do they get banned from Reddit too this time?
iso1631 6y ago
Gamestop went from 90 to 140 overnight in late/early trading - when retail on reddit are locked out. This isn't a reddit, or even retail, pump and dump.
- read_if_gay_ 6y ago
  Similar thing happened the first time as well.
  - iso1631 6y ago
    For every $50k some YOLO gambler on wsb makes from gambling their beer money, some hedge fund is making $500m (and another is losing $500m).
- toomuchtodo 6y ago
  https://old.reddit.com/r/GME/comments/ljwo3v/serious_researchers_needed_now_i_think_i_know/ https://old.reddit.com/r/GME/comments/ljwo3v/serious_researc... https://old.reddit.com/r/GME/comments/lr33yp/etfs_containing_gme_average_daily_short_volume/ https://old.reddit.com/r/GME/comments/lr33yp/etfs_containing... https://old.reddit.com/r/GME/comments/ls830a/found_the_reason_for_the_dip_they_are_shorting/ https://old.reddit.com/r/GME/comments/ls830a/found_the_reaso...
  - BasedInfra 6y ago
    You think big finance is shorting ETFs with a combined value in the trillions to put downward pressure on GME stock price?
    - toomuchtodo 6y ago
      ¯\_(ツ)_/¯ Something's up, that's all I know (along with level 2 data). $16.8 billion dollars lost so far and counting. That's real money. https://i.imgur.com/Rz1kUp7.mp4 https://i.imgur.com/Rz1kUp7.mp4 EDIT: https://twitter.com/deitaone/status/1364957363724288000 https://twitter.com/deitaone/status/1364957363724288000 "Gamestop Short Sellers Estimated To Have Lost $818 Million On Their Bearish Bets on Wednesday - Ortex"
      - gruez 6y ago
        Funny to see how upvoted that story is considering a few weeks ago the whole subreddit thought CNBC was "fake news" and in bed with wall st.
        cat199 6y ago
        not necessarily - typical failed spin cycle usually tries spin+fud at level 10, when that fails, retrench to level 9, acknowledging some points with their own new spin and fake surprise at 'learning something new', lather, rinse, repeat. Same thing when you call out a compulsive liar in real life. I have 0% doubt that many of the comments in these threads are calling exactly this out. update: literally 1st pair of comments i read in WSB on this one is: "Lol Cramer is such a great actor. “What?! Seriously?!” What a douche" "Is he okay? He was looking off camera so frequently I thought maybe they are holding his wife hostage there or something. Cramer, buddy, blink twice if we should call the cops."
        lotsofpulp 6y ago
        That whole subreddit is supposed to a joke, or at least it was.
      - iso1631 6y ago
        you don't believe "Cable News Boomer Crybabys" do you? /s
      - fractionalhare 6y ago
        That is false. $16.8B is greater than Melvin's AUM at the start of the year. The person in that video doesn't substantiate their claim either. As a more general aside: take everything said on Cramer's show with a grain of salt. He is a deeply unserious character in the financial space. His angle is to be provocative, not accurate.
- mikestew 6y ago
  when retail on reddit are locked out "Retail on reddit" doesn't use a broker that allows after-hours trading? Or am I reading this phrase incorrectly?
  - datalus 6y ago
    Robinhood only allows you to trade for an hour into after hours. WeBull, another retail platform, and I believe thinkorswim (TDA's offering) allows you to trade the full after hours length of time which ends at 8pm EST. edit: These are the only 3 platforms I have experience with, there are certainly others.
    - edoceo 6y ago
      Confirming that TD/TOS let's me make trades as GTC_EXT. Good till Closed, Extended Hours (it's till 2000h New York time) and early morning. For gamblers this is like: "hard ways, always working"
  - iso1631 6y ago
    "reddit" being the chatty ones on wsb. Certainly don't claim it from what they write Of course it could be that nobody posting on reddit has a single share, and all the screenshots are just virtual profiles on various accounts, but if we're assuming what people on reddit are saying is broadly true then that's the case
  - bo1024 6y ago
    Many of them probably do, but I strongly doubt they're doing a ton of trading after hours. For one thing, the people all excited about gamestop have been talking about it at $40-50 / share, so why would they suddenly all jump in at $150? For another, I read (but don't know how to verify) that after-hours volume was much higher. Doesn't seem likely that retail was much of a factor.
    - jobigoud 6y ago
      > why would they suddenly all jump in at $150? Don't try to apply logic to this, it's meme trading, it's not meant to be rational.
- wdn 6y ago
  Retail cannot move price. We are talking about 100 of million shares traded. Only in this age that a stock going up is bad.
  - iso1631 6y ago
    From what I can tell so far 97 million shares have traded hands today - an average of $140, that's $14 billion spent on shares today alone. Even if 10 million redditors were buying, that would be $1400 each. That's ridiculous
    - deleted 6y ago
      [deleted]
    - postalrat 6y ago
      Could instead be 1400 reddit millionaires.
      - CyberDildonics 6y ago
        You think 1400 wallstreetbets readers put in 10 million each over night?
    - emteycz 6y ago
      Many people are daytrading it
    - wdn 6y ago
      It will be day trading firm. There are much better stock or futures to day trade as GME properly still requires 100% margin.
- throwaway0956 6y ago
  Vlad Tenev, CEO of Robinhood, had an interview with the owner of Barstool Sports a few days ago. He said that after investigating buy/sell orders data from various Market Makers, they determined that the majority of retail were selling and it was the institutions that were doing most of the buying that shot the price over the moon. I do think Reddit got the ball rolling, but I think the institutions got on board as soon as they saw an opportunity for quick profits and it went from there.
- bilekas 6y ago
  I'm inclined to agree.. They drop the CFO, and then this, without much sentiment on reddit like before. Super strange
- aphextron 6y ago
  >Gamestop went from 90 to 140 overnight in late/early trading - when retail on reddit are locked out. Retail traders were not "locked out". Practically every retail brokerage offers extended hours trading, many from 4AM to 9PM.
  - outworlder 6y ago
    Extended hours vary a lot between brokers. Not all offer premarket. Aftermarket tends to be 1h after close for the vast majority.
    - selectodude 6y ago
      TD Ameritrade offers 7am to 8pm. You just need a real brokerage.
      - edoceo 6y ago
        To add: those are New Youk timezone
- viklove 6y ago
  Any reputable broker will let you trade after hours (ETrade, TD, etc.) If you're still using Robinhood after what they pulled last month... that's on you.
- dragontamer 6y ago
  > Gamestop went from 90 to 140 overnight in late/early trading - when retail on reddit are locked out. Retail can buy/sell call options overnight. The Bloomberg opinion article states: > Yesterday someone bought thousands of GameStop call options with an $800 strike price expiring tomorrow. They cost 87 cents per share. If the stock closes above $800 tomorrow those options will pay out; also though all notions of money and value and human society will be rendered meaningless, so I don’t know what you’ll do with your payout. That hypothetical person YOLOing $100,000+ could very easily be a retail investor throwing away money for the lulz. Maybe someone who won big a few months ago and feels fine throwing their excess money away.
  - cjbenedikt 6y ago
    Ever considered that someone just closed out short call positions ?
    - dragontamer 6y ago
      Open interest declines if someone closes positions. Open interest increases if someone opens a position. ---------- Open Interest is well over 10,000 on $800 GME expiring tomorrow. So __somebody__ bought-to-open call options at $800. (I presume the sell-to-open side of that call option is just the Market Maker who happened to close that deal, taking the free money). This is well over $1-million USD being YOLO'd onto an outrageous bet (that GME is going to be over $800 tomorrow at 4:30pm). https://www.nasdaq.com/market-activity/stocks/gme/option-chain/call-put-options/gme---210226c00800000 https://www.nasdaq.com/market-activity/stocks/gme/option-cha... --------- In any case, my point is that retail is absolutely allowed to trade options overnight. Just because stock market is closed doesn't mean that the options-market is closed. The options-market is 24/7.
      - TameAntelope 6y ago
        You should see the bets people make on the Superbowl, if you think this YOLO is crazy.
  - ConcernedCoder 6y ago
- fractionalhare 6y ago
  It's both retail and institutional. Retail traders can't swing that kind of volume in the underlying shares, no. But retail call buying as a proportion of total equity options volume is up massively in the past two years. The trading leverage inherent to retail call options herding together combined with the requirement for market makers to hedge the options they sell induces these huge movements. From there, momentum traders exacerbate the spark that's already lit.
Briel 6y ago
According to the thread about it on Reddit (https://old.reddit.com/r/gme_meltdown/comments/lrp639/why_is_gme_going_up/ https://old.reddit.com/r/gme_meltdown/comments/lrp639/why_is...), it's because: Some hedge fund bought a bunch of calls and then pumped the underlying. Option sellers had to buy shares to cover.
- deleted 6y ago
  [deleted]
- wdn 6y ago
  Option sellers don’t need to buy shares, they can just buy back the options they sold.
  - bluecalm 6y ago
    What if the buyer doesn't want to sell and requests the shares? Genuine question, I only have very superficial understating of the option market.
    - selectodude 6y ago
      Then the market maker has to give the option holder the shares.
    - jbeam 6y ago
      --Stock options are standardized contracts so it doesn't need to be the same buyer. --Call options cannot be exercised (this would be requesting the shares) until the stock price exceeds the strike price. American options can be exercised at any time, European options can only be exercised at expiry. --It's typically better to sell an American option rather than exercise early. Options have "intrinsic" and "extrinsic" value. The intrinsic value is what you get when you exercise. Simplifying a bit of messiness away, if your strike price is $30 and the stock is at $50 then by exercising and selling the shares you net $20. But the option at the same time will sell for more than $20. Thus by exercising early, you leave extrinsic value on the table. The time-to-expiry aspect is a significant portion of an option's extrinsic value.
legitster 6y ago
> Yesterday someone bought thousands of GameStop call options with an $800 strike price expiring tomorrow. They cost 87 cents per share. If the stock closes above $800 tomorrow those options will pay out; also though all notions of money and value and human society will be rendered meaningless, so I don’t know what you’ll do with your payout. > Fun fact, the Bloomberg options value calculator tells me that the delta of that $800-strike call option expiring tomorrow is zero. That is, the right theoretical hedge for a market maker who sells that option is to do nothing, to buy zero shares to hedge against the minuscule risk of the stock going to $800. Standard options math, and also frankly common sense, tells you that if the stock is trading at $40 or $90 or whatever, and someone comes to you and asks to buy a two-day option struck at $800, the proper reaction is to say “lol okay sure pal,” take their money and never think about it again. But I’m sure people bought other options that market makers did hedge, why not. We’ve discussed some recent research finding that options positioning predicts late-in-the-day trading moves, and I suppose the shape of yesterday’s late-afternoon rally could be partially explained by options. I hope if anything, this Gamestop saga has turned a lot of people onto Matt Levine's writing. He consistently puts out some of the most laugh-out-loud hilarious things I will read every day, in a way that is actually able to concisely explain really complex subjects. And he cranks out one of these every single day. I am simply in awe of him.
- rkalla 6y ago
  The brilliance in this is wonderful: > also though all notions of money and value and human society will be rendered meaningless, so I don’t know what you’ll do with your payout.
- bo1024 6y ago
  His writing is really entertaining and informative. But I have to disagree with this. The point of hedging is risk management. If something really weird and unexpected is happening, basing decisions on a standard options value calculator seems like a terrible idea. Also, you have to decide: do you think this was a stupid (retail) investor or a smart (institutional) one? If stupid, how do they have a few million dollars to blow on a bet like this? If smart, might they have some plan, like they think they can trigger a squeeze of some kind? This all just raises so many questions for me.
bo1024 6y ago
I think the T+2, T+1 settlement discussion is a red herring. What people are really upset about is a lack of accountability and transparency in trading, especially around short selling.
- Traster 6y ago
  What exact transparency do you want?
  - thebean11 6y ago
    There were accusations that the shorts lied about closing their positions, and that were they caught they'd only get a slap on the wrist. I'm not sure what the truth is here, but if the accusations are correct I think it's fraud level stock market manipulation.
    - fractionalhare 6y ago
      Who made those accusations, and what evidence did you see? I've only seen those accusations on reddit and twitter. The only "evidence" I've ever seen in support of those accusations is repeated citation of short interest. Short interest is an aggregate figure which doesn't track specific firms, so it can't be used to discover if an individual fund closed or opened a short position.
      - x3n0ph3n3 6y ago
        There's no actual evidence of those short positions actually being closed, other than vague language indicating that it would happen.
        fractionalhare 6y ago
        Well there's the evidence that any firm short at $20 would have been dead if they didn't get out before $200. I'm only aware of one firm that went bankrupt, and it wasn't Melvin or another major fund. Put yourself in the firm's position and think about this from a game theoretic perspective...what is the upside in lying? The thinking is that you might convince people to lay off the voracious buying if you make it seem like the short squeeze isn't possible because you're out? That seems like a stretch and would require navigating lots of wild assumptions about why this almost unprecedented price action is happening. On the other hand, there is tons of downside. If the plan doesn't work and the price continues its meteoric rise, you're bankrupt. If you're caught lying, you're additionally hit with securities fraud. Then the veil is pierced and the partners are at risk of losing their money. On top of this if your investors are savvy they'll sue you for breaking fiduciary duty because you didn't close out a position that makes selling naked SPY calls look safe. This also puts the partners' private capital at risk. It would be cartoonishly dumb to lie about closing the position instead of actually doing it.
nayuki 6y ago
> It is not unimaginable that the stock market could move to real-time settlement; you could put stocks on the blockchain hahaha. Wow this writer is condescending towards financial innovation. Snubbed. Here's a free archive for good measure: https://archive.is/MysFz https://archive.is/MysFz
- UShouldBWorking 6y ago
  My hero, thank you for doing this!!!
CyanLite2 6y ago
Shame on Gamestop management for not doing a secondary offering. Tesla did this a few times in the past 18 months to raise like $10-12 billion dollars.
- jpgvm 6y ago
  It's not clear if they can do an offering at inflated prices without running afoul of SEC. Even if they did it's unclear if it would be enough to end the situation because the shorts clearly think GME is on a one way road to bankruptcy. After initial short positions were unwound new shorts entered when the stock was flying super high so short interest naturally remains high. GME already has a decent pile of cash on the books (which is why attracted Burry in the first place) so it's also not clear if a secondary offering would do much to dissuade the shorts from re-entering their positions after using the offering to cover.
  - bo1024 6y ago
    > It's not clear if they can do an offering at inflated prices without running afoul of SEC. To add to this, the SEC issued a statement in the middle of it all that seems to discourage Gamestop from offering more shares. It's unclear to me but that's my interpretation of the last sentence of this paragraph: > In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. *Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.* https://www.sec.gov/news/public-statement/joint-statement-market-volatility-2021-01-29 https://www.sec.gov/news/public-statement/joint-statement-ma...
- wtf_is_up 6y ago
  A recent Reuters story claimed they couldn't issue shares without releasing preliminary earnings data per SEC regs. Apparently, they had too much data on the previous quarter. They chose not to release the prelim earnings. I wonder if this has anything to do with the CFO being ousted.
- 6y ago
underseacables 6y ago
I worry that eventually the major investment firms and banks will demand that in order to buy or sell securities you must have a license, and only a licensed securities trader is able to do that. It would be horrible for the day traders and companies like E*Trade but it’s possible.
- vinceguidry 6y ago
  It's already like that. You don't buy stock on RobinHood, RobinHood buys and holds the stocks for you.
- boh 6y ago
  You already have to be an accredited investor to buy 90% of the tradable assets available.
- SpicyLemonZest 6y ago
  That's pretty hard to imagine. The whole point of a publicly traded company is that the public can trade it; investment firms can (and many do) stick to private markets if they don't want to deal with that.
- intotheabyss 6y ago
  Then more people will just use decentralized finance.
- njharman 6y ago
  I doubt it. "retail" investors have too much money the bigger investors want to extract from them.
standardUser 6y ago
This seems like a good a time as any to sell my single share I bought so I could be part of... whatever the hell was going on. Or should I hold?
- xwdv 6y ago
  Hold no point in selling for some paltry sum of money.
  - WJW 6y ago
    Buy another no point in selling for some paltry sum of money.
- rcoveson 6y ago
  Sell no point in holding for some paltry sum of money.
- herval 6y ago
  both replies to this question are equally correct :-)
- Judgmentality 6y ago
  https://files.catbox.moe/1o6bzv.mp4 https://files.catbox.moe/1o6bzv.mp4
  - rexelhoff 6y ago
    WTF did I just watch?
    - Judgmentality 6y ago
      I had the same reaction but I fucking love it, whatever it is.
      - FrozenCow 6y ago
xwdv 6y ago
Rest of the market is getting trashed because of this shit, sick and tired of these red days back to back. Enough is enough!
- PartiallyTyped 6y ago
  According to [1], HFs are shorting ETFs with GME shares because there aren't any more shares to borrow. Shorting the etfs drops the price and causes them to liquidate some positions, this however, suggests to me that this is a hail Mary because any liquidation is not necessarily done on GME shares. In-fact, owning GME shares at this point is a hedge against the market. If anything, this actually causes some correction in the market. [1] https://old.reddit.com/r/GME/comments/ls830a/found_the_reason_for_the_dip_they_are_shorting/ https://old.reddit.com/r/GME/comments/ls830a/found_the_reaso...
  - gruez 6y ago
    >According to [1], HFs are shorting ETFs with GME shares because there aren't any more shares to borrow Why would be the shares be hard to borrow? Isn't short interest relatively low compared to a few weeks ago?
- iso1210 6y ago
  Why? If you like a stock, buy it, and enjoy. If you're gambling, tough. If you're a short seller who lost the best part of a billion dollars today, thoughts and prayers? https://www.reuters.com/article/us-retail-trading-gamestop-loss-idUSKBN2AP260 https://www.reuters.com/article/us-retail-trading-gamestop-l...
HockeyPlayer 6y ago
The March 19th calls are at 500% volatility. I couldn't help it, I sold a few contracts of the 200 strike. The trading activity was wacky, every time I joined the option offer I got lifted within a minute. I do not encourage anyone else to do the same. My risk tolerances are different from yours.
- bhouston 6y ago
  This is just a casino at this point where the underlying fundamentals are pretty broken and random on GME.
ketanmaheshwari 6y ago
It is unbelievable the amount of delusional talk going on at r/wsb. They think the price will magically go to 1K even 10K per share. Surely some of them will have lasting mental issues when it all ends.
- Judgmentality 6y ago
  Haters gonna hate. Gotta get dem tendies.
  - rdsubhas 6y ago
    You forgot the /s
    - Judgmentality 6y ago
      https://www.youtube.com/watch?v=04rRbf0cIjc&feature=youtu.be https://www.youtube.com/watch?v=04rRbf0cIjc&feature=youtu.be
      - ketanmaheshwari 6y ago
        These responses prove my exact point.
        Judgmentality 6y ago
        You might want to consider developing a sense of humor, friend.
        ketanmaheshwari 6y ago
        Real people are losing real money here -- it is a serious matter.
        Judgmentality 6y ago

121 points by kgwgk 6y ago

Do they get banned from Reddit too this time?

Gamestop went from 90 to 140 overnight in late/early trading - when retail on reddit are locked out. This isn't a reddit, or even retail, pump and dump.

read_if_gay_ 6y ago
Similar thing happened the first time as well.
- iso1631 6y ago
  For every $50k some YOLO gambler on wsb makes from gambling their beer money, some hedge fund is making $500m (and another is losing $500m).
toomuchtodo 6y ago
https://old.reddit.com/r/GME/comments/ljwo3v/serious_researchers_needed_now_i_think_i_know/ https://old.reddit.com/r/GME/comments/ljwo3v/serious_researc... https://old.reddit.com/r/GME/comments/lr33yp/etfs_containing_gme_average_daily_short_volume/ https://old.reddit.com/r/GME/comments/lr33yp/etfs_containing... https://old.reddit.com/r/GME/comments/ls830a/found_the_reason_for_the_dip_they_are_shorting/ https://old.reddit.com/r/GME/comments/ls830a/found_the_reaso...
- BasedInfra 6y ago
  You think big finance is shorting ETFs with a combined value in the trillions to put downward pressure on GME stock price?
  - toomuchtodo 6y ago
    ¯\_(ツ)_/¯ Something's up, that's all I know (along with level 2 data). $16.8 billion dollars lost so far and counting. That's real money. https://i.imgur.com/Rz1kUp7.mp4 https://i.imgur.com/Rz1kUp7.mp4 EDIT: https://twitter.com/deitaone/status/1364957363724288000 https://twitter.com/deitaone/status/1364957363724288000 "Gamestop Short Sellers Estimated To Have Lost $818 Million On Their Bearish Bets on Wednesday - Ortex"
    - gruez 6y ago
      Funny to see how upvoted that story is considering a few weeks ago the whole subreddit thought CNBC was "fake news" and in bed with wall st.
      - cat199 6y ago
        not necessarily - typical failed spin cycle usually tries spin+fud at level 10, when that fails, retrench to level 9, acknowledging some points with their own new spin and fake surprise at 'learning something new', lather, rinse, repeat. Same thing when you call out a compulsive liar in real life. I have 0% doubt that many of the comments in these threads are calling exactly this out. update: literally 1st pair of comments i read in WSB on this one is: "Lol Cramer is such a great actor. “What?! Seriously?!” What a douche" "Is he okay? He was looking off camera so frequently I thought maybe they are holding his wife hostage there or something. Cramer, buddy, blink twice if we should call the cops."
      - lotsofpulp 6y ago
        That whole subreddit is supposed to a joke, or at least it was.
    - iso1631 6y ago
      you don't believe "Cable News Boomer Crybabys" do you? /s
    - fractionalhare 6y ago
      That is false. $16.8B is greater than Melvin's AUM at the start of the year. The person in that video doesn't substantiate their claim either. As a more general aside: take everything said on Cramer's show with a grain of salt. He is a deeply unserious character in the financial space. His angle is to be provocative, not accurate.
mikestew 6y ago
when retail on reddit are locked out "Retail on reddit" doesn't use a broker that allows after-hours trading? Or am I reading this phrase incorrectly?
- datalus 6y ago
  Robinhood only allows you to trade for an hour into after hours. WeBull, another retail platform, and I believe thinkorswim (TDA's offering) allows you to trade the full after hours length of time which ends at 8pm EST. edit: These are the only 3 platforms I have experience with, there are certainly others.
  - edoceo 6y ago
    Confirming that TD/TOS let's me make trades as GTC_EXT. Good till Closed, Extended Hours (it's till 2000h New York time) and early morning. For gamblers this is like: "hard ways, always working"
- iso1631 6y ago
  "reddit" being the chatty ones on wsb. Certainly don't claim it from what they write Of course it could be that nobody posting on reddit has a single share, and all the screenshots are just virtual profiles on various accounts, but if we're assuming what people on reddit are saying is broadly true then that's the case
- bo1024 6y ago
  Many of them probably do, but I strongly doubt they're doing a ton of trading after hours. For one thing, the people all excited about gamestop have been talking about it at $40-50 / share, so why would they suddenly all jump in at $150? For another, I read (but don't know how to verify) that after-hours volume was much higher. Doesn't seem likely that retail was much of a factor.
  - jobigoud 6y ago
    > why would they suddenly all jump in at $150? Don't try to apply logic to this, it's meme trading, it's not meant to be rational.
wdn 6y ago
Retail cannot move price. We are talking about 100 of million shares traded. Only in this age that a stock going up is bad.
- iso1631 6y ago
  From what I can tell so far 97 million shares have traded hands today - an average of $140, that's $14 billion spent on shares today alone. Even if 10 million redditors were buying, that would be $1400 each. That's ridiculous
  - deleted 6y ago
    [deleted]
  - postalrat 6y ago
    Could instead be 1400 reddit millionaires.
    - CyberDildonics 6y ago
      You think 1400 wallstreetbets readers put in 10 million each over night?
  - emteycz 6y ago
    Many people are daytrading it
  - wdn 6y ago
    It will be day trading firm. There are much better stock or futures to day trade as GME properly still requires 100% margin.
throwaway0956 6y ago
Vlad Tenev, CEO of Robinhood, had an interview with the owner of Barstool Sports a few days ago. He said that after investigating buy/sell orders data from various Market Makers, they determined that the majority of retail were selling and it was the institutions that were doing most of the buying that shot the price over the moon. I do think Reddit got the ball rolling, but I think the institutions got on board as soon as they saw an opportunity for quick profits and it went from there.
bilekas 6y ago
I'm inclined to agree.. They drop the CFO, and then this, without much sentiment on reddit like before. Super strange
aphextron 6y ago
>Gamestop went from 90 to 140 overnight in late/early trading - when retail on reddit are locked out. Retail traders were not "locked out". Practically every retail brokerage offers extended hours trading, many from 4AM to 9PM.
- outworlder 6y ago
  Extended hours vary a lot between brokers. Not all offer premarket. Aftermarket tends to be 1h after close for the vast majority.
  - selectodude 6y ago
    TD Ameritrade offers 7am to 8pm. You just need a real brokerage.
    - edoceo 6y ago
      To add: those are New Youk timezone
viklove 6y ago
Any reputable broker will let you trade after hours (ETrade, TD, etc.) If you're still using Robinhood after what they pulled last month... that's on you.
dragontamer 6y ago
> Gamestop went from 90 to 140 overnight in late/early trading - when retail on reddit are locked out. Retail can buy/sell call options overnight. The Bloomberg opinion article states: > Yesterday someone bought thousands of GameStop call options with an $800 strike price expiring tomorrow. They cost 87 cents per share. If the stock closes above $800 tomorrow those options will pay out; also though all notions of money and value and human society will be rendered meaningless, so I don’t know what you’ll do with your payout. That hypothetical person YOLOing $100,000+ could very easily be a retail investor throwing away money for the lulz. Maybe someone who won big a few months ago and feels fine throwing their excess money away.
- cjbenedikt 6y ago
  Ever considered that someone just closed out short call positions ?
  - dragontamer 6y ago
    Open interest declines if someone closes positions. Open interest increases if someone opens a position. ---------- Open Interest is well over 10,000 on $800 GME expiring tomorrow. So __somebody__ bought-to-open call options at $800. (I presume the sell-to-open side of that call option is just the Market Maker who happened to close that deal, taking the free money). This is well over $1-million USD being YOLO'd onto an outrageous bet (that GME is going to be over $800 tomorrow at 4:30pm). https://www.nasdaq.com/market-activity/stocks/gme/option-chain/call-put-options/gme---210226c00800000 https://www.nasdaq.com/market-activity/stocks/gme/option-cha... --------- In any case, my point is that retail is absolutely allowed to trade options overnight. Just because stock market is closed doesn't mean that the options-market is closed. The options-market is 24/7.
    - TameAntelope 6y ago
      You should see the bets people make on the Superbowl, if you think this YOLO is crazy.
- ConcernedCoder 6y ago
fractionalhare 6y ago
It's both retail and institutional. Retail traders can't swing that kind of volume in the underlying shares, no. But retail call buying as a proportion of total equity options volume is up massively in the past two years. The trading leverage inherent to retail call options herding together combined with the requirement for market makers to hedge the options they sell induces these huge movements. From there, momentum traders exacerbate the spark that's already lit.

Briel 6y ago

According to the thread about it on Reddit (https://old.reddit.com/r/gme_meltdown/comments/lrp639/why_is_gme_going_up/ https://old.reddit.com/r/gme_meltdown/comments/lrp639/why_is...), it's because: Some hedge fund bought a bunch of calls and then pumped the underlying. Option sellers had to buy shares to cover.

deleted 6y ago
[deleted]
wdn 6y ago
Option sellers don’t need to buy shares, they can just buy back the options they sold.
- bluecalm 6y ago
  What if the buyer doesn't want to sell and requests the shares? Genuine question, I only have very superficial understating of the option market.
  - selectodude 6y ago
    Then the market maker has to give the option holder the shares.
  - jbeam 6y ago
    --Stock options are standardized contracts so it doesn't need to be the same buyer. --Call options cannot be exercised (this would be requesting the shares) until the stock price exceeds the strike price. American options can be exercised at any time, European options can only be exercised at expiry. --It's typically better to sell an American option rather than exercise early. Options have "intrinsic" and "extrinsic" value. The intrinsic value is what you get when you exercise. Simplifying a bit of messiness away, if your strike price is $30 and the stock is at $50 then by exercising and selling the shares you net $20. But the option at the same time will sell for more than $20. Thus by exercising early, you leave extrinsic value on the table. The time-to-expiry aspect is a significant portion of an option's extrinsic value.

legitster 6y ago

> Yesterday someone bought thousands of GameStop call options with an $800 strike price expiring tomorrow. They cost 87 cents per share. If the stock closes above $800 tomorrow those options will pay out; also though all notions of money and value and human society will be rendered meaningless, so I don’t know what you’ll do with your payout. > Fun fact, the Bloomberg options value calculator tells me that the delta of that $800-strike call option expiring tomorrow is zero. That is, the right theoretical hedge for a market maker who sells that option is to do nothing, to buy zero shares to hedge against the minuscule risk of the stock going to $800. Standard options math, and also frankly common sense, tells you that if the stock is trading at $40 or $90 or whatever, and someone comes to you and asks to buy a two-day option struck at $800, the proper reaction is to say “lol okay sure pal,” take their money and never think about it again. But I’m sure people bought other options that market makers did hedge, why not. We’ve discussed some recent research finding that options positioning predicts late-in-the-day trading moves, and I suppose the shape of yesterday’s late-afternoon rally could be partially explained by options. I hope if anything, this Gamestop saga has turned a lot of people onto Matt Levine's writing. He consistently puts out some of the most laugh-out-loud hilarious things I will read every day, in a way that is actually able to concisely explain really complex subjects. And he cranks out one of these every single day. I am simply in awe of him.

rkalla 6y ago
The brilliance in this is wonderful: > also though all notions of money and value and human society will be rendered meaningless, so I don’t know what you’ll do with your payout.
bo1024 6y ago
His writing is really entertaining and informative. But I have to disagree with this. The point of hedging is risk management. If something really weird and unexpected is happening, basing decisions on a standard options value calculator seems like a terrible idea. Also, you have to decide: do you think this was a stupid (retail) investor or a smart (institutional) one? If stupid, how do they have a few million dollars to blow on a bet like this? If smart, might they have some plan, like they think they can trigger a squeeze of some kind? This all just raises so many questions for me.

bo1024 6y ago

I think the T+2, T+1 settlement discussion is a red herring. What people are really upset about is a lack of accountability and transparency in trading, especially around short selling.

Traster 6y ago
What exact transparency do you want?
- thebean11 6y ago
  There were accusations that the shorts lied about closing their positions, and that were they caught they'd only get a slap on the wrist. I'm not sure what the truth is here, but if the accusations are correct I think it's fraud level stock market manipulation.
  - fractionalhare 6y ago
    Who made those accusations, and what evidence did you see? I've only seen those accusations on reddit and twitter. The only "evidence" I've ever seen in support of those accusations is repeated citation of short interest. Short interest is an aggregate figure which doesn't track specific firms, so it can't be used to discover if an individual fund closed or opened a short position.
    - x3n0ph3n3 6y ago
      There's no actual evidence of those short positions actually being closed, other than vague language indicating that it would happen.
      - fractionalhare 6y ago
        Well there's the evidence that any firm short at $20 would have been dead if they didn't get out before $200. I'm only aware of one firm that went bankrupt, and it wasn't Melvin or another major fund. Put yourself in the firm's position and think about this from a game theoretic perspective...what is the upside in lying? The thinking is that you might convince people to lay off the voracious buying if you make it seem like the short squeeze isn't possible because you're out? That seems like a stretch and would require navigating lots of wild assumptions about why this almost unprecedented price action is happening. On the other hand, there is tons of downside. If the plan doesn't work and the price continues its meteoric rise, you're bankrupt. If you're caught lying, you're additionally hit with securities fraud. Then the veil is pierced and the partners are at risk of losing their money. On top of this if your investors are savvy they'll sue you for breaking fiduciary duty because you didn't close out a position that makes selling naked SPY calls look safe. This also puts the partners' private capital at risk. It would be cartoonishly dumb to lie about closing the position instead of actually doing it.

nayuki 6y ago

> It is not unimaginable that the stock market could move to real-time settlement; you could put stocks on the blockchain hahaha. Wow this writer is condescending towards financial innovation. Snubbed. Here's a free archive for good measure: https://archive.is/MysFz https://archive.is/MysFz

UShouldBWorking 6y ago
My hero, thank you for doing this!!!

CyanLite2 6y ago

Shame on Gamestop management for not doing a secondary offering. Tesla did this a few times in the past 18 months to raise like $10-12 billion dollars.

jpgvm 6y ago
It's not clear if they can do an offering at inflated prices without running afoul of SEC. Even if they did it's unclear if it would be enough to end the situation because the shorts clearly think GME is on a one way road to bankruptcy. After initial short positions were unwound new shorts entered when the stock was flying super high so short interest naturally remains high. GME already has a decent pile of cash on the books (which is why attracted Burry in the first place) so it's also not clear if a secondary offering would do much to dissuade the shorts from re-entering their positions after using the offering to cover.
- bo1024 6y ago
  > It's not clear if they can do an offering at inflated prices without running afoul of SEC. To add to this, the SEC issued a statement in the middle of it all that seems to discourage Gamestop from offering more shares. It's unclear to me but that's my interpretation of the last sentence of this paragraph: > In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. *Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.* https://www.sec.gov/news/public-statement/joint-statement-market-volatility-2021-01-29 https://www.sec.gov/news/public-statement/joint-statement-ma...
wtf_is_up 6y ago
A recent Reuters story claimed they couldn't issue shares without releasing preliminary earnings data per SEC regs. Apparently, they had too much data on the previous quarter. They chose not to release the prelim earnings. I wonder if this has anything to do with the CFO being ousted.
6y ago

underseacables 6y ago

I worry that eventually the major investment firms and banks will demand that in order to buy or sell securities you must have a license, and only a licensed securities trader is able to do that. It would be horrible for the day traders and companies like E*Trade but it’s possible.

vinceguidry 6y ago
It's already like that. You don't buy stock on RobinHood, RobinHood buys and holds the stocks for you.
boh 6y ago
You already have to be an accredited investor to buy 90% of the tradable assets available.
SpicyLemonZest 6y ago
That's pretty hard to imagine. The whole point of a publicly traded company is that the public can trade it; investment firms can (and many do) stick to private markets if they don't want to deal with that.
intotheabyss 6y ago
Then more people will just use decentralized finance.
njharman 6y ago
I doubt it. "retail" investors have too much money the bigger investors want to extract from them.

standardUser 6y ago

This seems like a good a time as any to sell my single share I bought so I could be part of... whatever the hell was going on. Or should I hold?

xwdv 6y ago
Hold no point in selling for some paltry sum of money.
- WJW 6y ago
  Buy another no point in selling for some paltry sum of money.
rcoveson 6y ago
Sell no point in holding for some paltry sum of money.
herval 6y ago
both replies to this question are equally correct :-)
Judgmentality 6y ago
https://files.catbox.moe/1o6bzv.mp4 https://files.catbox.moe/1o6bzv.mp4
- rexelhoff 6y ago
  WTF did I just watch?
  - Judgmentality 6y ago
    I had the same reaction but I fucking love it, whatever it is.
    - FrozenCow 6y ago

xwdv 6y ago

Rest of the market is getting trashed because of this shit, sick and tired of these red days back to back. Enough is enough!

PartiallyTyped 6y ago
According to [1], HFs are shorting ETFs with GME shares because there aren't any more shares to borrow. Shorting the etfs drops the price and causes them to liquidate some positions, this however, suggests to me that this is a hail Mary because any liquidation is not necessarily done on GME shares. In-fact, owning GME shares at this point is a hedge against the market. If anything, this actually causes some correction in the market. [1] https://old.reddit.com/r/GME/comments/ls830a/found_the_reason_for_the_dip_they_are_shorting/ https://old.reddit.com/r/GME/comments/ls830a/found_the_reaso...
- gruez 6y ago
  >According to [1], HFs are shorting ETFs with GME shares because there aren't any more shares to borrow Why would be the shares be hard to borrow? Isn't short interest relatively low compared to a few weeks ago?
iso1210 6y ago
Why? If you like a stock, buy it, and enjoy. If you're gambling, tough. If you're a short seller who lost the best part of a billion dollars today, thoughts and prayers? https://www.reuters.com/article/us-retail-trading-gamestop-loss-idUSKBN2AP260 https://www.reuters.com/article/us-retail-trading-gamestop-l...

HockeyPlayer 6y ago

The March 19th calls are at 500% volatility. I couldn't help it, I sold a few contracts of the 200 strike. The trading activity was wacky, every time I joined the option offer I got lifted within a minute. I do not encourage anyone else to do the same. My risk tolerances are different from yours.

bhouston 6y ago
This is just a casino at this point where the underlying fundamentals are pretty broken and random on GME.

ketanmaheshwari 6y ago

It is unbelievable the amount of delusional talk going on at r/wsb. They think the price will magically go to 1K even 10K per share. Surely some of them will have lasting mental issues when it all ends.

Judgmentality 6y ago
Haters gonna hate. Gotta get dem tendies.
- rdsubhas 6y ago
  You forgot the /s
  - Judgmentality 6y ago
    https://www.youtube.com/watch?v=04rRbf0cIjc&feature=youtu.be https://www.youtube.com/watch?v=04rRbf0cIjc&feature=youtu.be
    - ketanmaheshwari 6y ago
      These responses prove my exact point.
      - Judgmentality 6y ago
        You might want to consider developing a sense of humor, friend.
        ketanmaheshwari 6y ago
        Real people are losing real money here -- it is a serious matter.
        Judgmentality 6y ago