7 ms·

I’ve tried to explain this on HN twice before and been immediately downvoted, despite my best attempt at explaining the nuances. Your comment sums things up wel

by jw1224 5y ago

I’ve tried to explain this on HN twice before and been immediately downvoted, despite my best attempt at explaining the nuances. Your comment sums things up well, thanks for sharing. For anyone else who’s curious to learn more, as mentioned, Superstonk[1] is the place to go. Don’t be put off by the name — Superstonk is dedicated exclusively to monitoring the GME situation specifically. It’s actually the third subreddit used for this since January — r/WallStreetBets has clearly been taken over by pump-and-dump schemes on a mass scale, and the older r/GME subreddit saw a mass exodus of users to the newly-formed Superstonk, after mods lost control of it to speculated “shill” posters. Plenty of evidence has arisen showing anonymous recruiters offering to pay Redditors to spread GME misinformation. I’d suggest filtering Superstonk posts to just the “DD” flair to hide the humour/camaraderie, which can understandably be a bit off-putting to outsiders, unfamiliar with the myriad of crazy events that have happened so far[2]. Having followed the GME saga very closely since January, one of the most enlightening revelations for me has been the blatant media manipulation surrounding GME. There’s just far too many examples to ignore — so perhaps it’s unsurprising that many people still think it’s simply a “Reddit meme stock” that’s run it’s course. If the DD is to be believed, this thing is far from over. Regardless, I’m thoroughly enjoying watching how it unfurls. [1] https://www.reddit.com/r/Superstonk/ https://www.reddit.com/r/Superstonk/ [2] https://gmetimeline.com/ https://gmetimeline.com/

qeternity 5y ago
It gets downvoted because it’s nonsense. People who talk about naked shorting do not understand what it means. And in general people talking about these sorts of conspiracies definitely don’t understand options/greeks. Source: career hedge fund trader
- toomuchtodo 5y ago
  You say this, and then it’s reported that funds are bleeding out $800M-$1B per day when GME and AMC rally, so ¯\_(ツ)_/¯ https://www.bloomberg.com/news/articles/2021-06-01/amc-gamestop-rallies-deal-shorts-another-591-million-blow https://www.bloomberg.com/news/articles/2021-06-01/amc-games...
  - jw1224 5y ago
    Last week’s 8-K filing revealed GameStop are actively assisting the SEC with an investigation into ongoing manipulation of their share price. They even disclosed to investors the risk of a further short squeeze on their stock. If they don’t have reason to believe that’s a possibility, it would never have been put on the record in a public filing.
    - WJW 5y ago
      They can believe it is an exceedingly remote possibility but nonetheless put it in the filing just in case. These filings contain many risk statements about events that do not eventually come to pass. In addition, assisting the SEC about 'ongoing manipulation' can just as easily mean that the SEC may be considering mass hyping of the stock through reddit to be manipulation. It does not mean that there is definitely shady stuff going on that GameStop is worried about.
      - jw1224 5y ago
        Both fair points, thanks for your comment. GameStop’s filing did note the following [1]: “the inquiry is not expected to adversely impact us” I feel this is a statement they would be unlikely to make if they felt the SEC’s investigation was likely to result in retail sell-offs. They’ve been able to use the recent dramatic increase in their share price to pay off $216m in debt a year early, and add a further $551m to their bank account. Plus, they’re currently in the process of raising an additional $1.1bn from additional share sales. The SEC themselves have commented on the investigation too [2]: "SEC staff continues to monitor the market in light of the ongoing volatility in certain stocks to determine if there have been any disruptions of the market, manipulative trading, or other misconduct," a spokesperson for SEC said in a statement. "In addition, we will act to protect retail investors if violations of federal securities laws are found." That last sentence leaves me feeling optimistic. [1] https://www.bloomberg.com/news/articles/2021-06-09/gamestop-says-sec-is-investigating-trading-of-its-shares https://www.bloomberg.com/news/articles/2021-06-09/gamestop-... [2] https://www.reuters.com/world/us/us-sec-says-observing-market-meme-stocks-rally-2021-06-07/ https://www.reuters.com/world/us/us-sec-says-observing-marke...
- rezahussain 5y ago
  I am very interested in hearing the opposite side against GME. Can you provide some points on why the main premise(that there is still a large short position which is underwater) could be false? The DTCC new rules + ongoing restrictions at brokerages suggests to me something is going on. For instance tdameritrade makes me call in to sell covered calls on my GME position while they allow me to sell covered calls through the web interface for my other positions.
  - qeternity 5y ago
    > Can you provide some points on why the main premise(that there is still a large short position which is underwater) could be false? I never said this wasn’t true. By all accounts this appears to remain true. What I take issue with is all this talk of “naked shorting” which is a very specific thing and I’ve not seen any data to suggest this has happened at scale. It also fundamentally misunderstands now Citadel Securities makes money or even just options basics (the vast majority of retail are buying calls which means any MM will be long underlying against their short calls). It’s the conspiracy theory stuff which is nonsense.
    - jw1224 5y ago
      > the vast majority of retail are buying calls This is almost certainly NOT the case. Do you have any data to back this statement up? The MOASS theory relies simply on retail investors buying and holding shares. On the rare occasion when someone posts to Superstonk about their GME options, the user is quickly warned against them, without fail, every single time I’ve seen it happen. Retail investors were no doubt trading options through Robinhood back in January. But after all the drama back then, Robinhood has since suffered a mass exodus of users to different brokerages. It’s clear from spending any time at places like Superstonk that retail investors who’ve read any of the DD have moved away from RH en masse. There was a big push across the community to do this back in February, but I appreciate this isn’t obvious knowledge to someone who hasn’t kept up-to-speed with it for the past 6 months. Options are normally only ever mentioned by uninformed new users.
      - 5y ago
- paulpauper 5y ago
  Also, many hedge funds are betting on GME going up. To say that this GME rally hurts hedge funds demonstrates a lack of understanding about the market.
- gifnamething 5y ago
  Whether or not it's true is irrelevant. The point about the motivations and beliefs of the traders.
skybrian 5y ago
I agree that it’s not nihilism when some people really believe it. It might still be nonsense though, or a mixture of some sort. This is the sort of thing many people stay away from because dumb heuristics say it’s probably nonsense and therefore it’s not worth investigating, and some stranger on the Internet saying “no, there is something to it” isn’t enough to move the needle on being actually curious enough to investigate. Someone with a reputation for not being fooled would have to look into it and explain why, actually, it’s not nonsense. More: https://slatestarcodex.com/2019/06/03/repost-epistemic-learned-helplessness/ https://slatestarcodex.com/2019/06/03/repost-epistemic-learn...
- jw1224 5y ago
  Thankfully users at Superstonk are generally very open to “conflicting DD”, and have reached out to several industry experts to conduct interviews and learn more about the mechanics. The interviews so far have been extremely helpful in confirming many aspects of the theory, reinforcing the hypothesis that shorts never covered. They’ve also been great opportunities for experts to correct any errors, red herrings, or misinformation in the community’s DD, which hadn’t already been picked up by other users. Here’s one with Dr Susanne Trimbath, author of the book “Naked, Short and Greedy: Wall Street’s Failure to Deliver”. Her many other qualifications can be found in the video description: https://youtu.be/fGVY2Kco8ng https://youtu.be/fGVY2Kco8ng
  - skybrian 5y ago
    Thanks. I’m not actually curious (for reasons explained in my previous post) but maybe it will help someone who is?

by jw1224 5y ago

qeternity 5y ago

It gets downvoted because it’s nonsense. People who talk about naked shorting do not understand what it means. And in general people talking about these sorts of conspiracies definitely don’t understand options/greeks. Source: career hedge fund trader

toomuchtodo 5y ago
You say this, and then it’s reported that funds are bleeding out $800M-$1B per day when GME and AMC rally, so ¯\_(ツ)_/¯ https://www.bloomberg.com/news/articles/2021-06-01/amc-gamestop-rallies-deal-shorts-another-591-million-blow https://www.bloomberg.com/news/articles/2021-06-01/amc-games...
- jw1224 5y ago
  Last week’s 8-K filing revealed GameStop are actively assisting the SEC with an investigation into ongoing manipulation of their share price. They even disclosed to investors the risk of a further short squeeze on their stock. If they don’t have reason to believe that’s a possibility, it would never have been put on the record in a public filing.
  - WJW 5y ago
    They can believe it is an exceedingly remote possibility but nonetheless put it in the filing just in case. These filings contain many risk statements about events that do not eventually come to pass. In addition, assisting the SEC about 'ongoing manipulation' can just as easily mean that the SEC may be considering mass hyping of the stock through reddit to be manipulation. It does not mean that there is definitely shady stuff going on that GameStop is worried about.
    - jw1224 5y ago
      Both fair points, thanks for your comment. GameStop’s filing did note the following [1]: “the inquiry is not expected to adversely impact us” I feel this is a statement they would be unlikely to make if they felt the SEC’s investigation was likely to result in retail sell-offs. They’ve been able to use the recent dramatic increase in their share price to pay off $216m in debt a year early, and add a further $551m to their bank account. Plus, they’re currently in the process of raising an additional $1.1bn from additional share sales. The SEC themselves have commented on the investigation too [2]: "SEC staff continues to monitor the market in light of the ongoing volatility in certain stocks to determine if there have been any disruptions of the market, manipulative trading, or other misconduct," a spokesperson for SEC said in a statement. "In addition, we will act to protect retail investors if violations of federal securities laws are found." That last sentence leaves me feeling optimistic. [1] https://www.bloomberg.com/news/articles/2021-06-09/gamestop-says-sec-is-investigating-trading-of-its-shares https://www.bloomberg.com/news/articles/2021-06-09/gamestop-... [2] https://www.reuters.com/world/us/us-sec-says-observing-market-meme-stocks-rally-2021-06-07/ https://www.reuters.com/world/us/us-sec-says-observing-marke...
rezahussain 5y ago
I am very interested in hearing the opposite side against GME. Can you provide some points on why the main premise(that there is still a large short position which is underwater) could be false? The DTCC new rules + ongoing restrictions at brokerages suggests to me something is going on. For instance tdameritrade makes me call in to sell covered calls on my GME position while they allow me to sell covered calls through the web interface for my other positions.
- qeternity 5y ago
  > Can you provide some points on why the main premise(that there is still a large short position which is underwater) could be false? I never said this wasn’t true. By all accounts this appears to remain true. What I take issue with is all this talk of “naked shorting” which is a very specific thing and I’ve not seen any data to suggest this has happened at scale. It also fundamentally misunderstands now Citadel Securities makes money or even just options basics (the vast majority of retail are buying calls which means any MM will be long underlying against their short calls). It’s the conspiracy theory stuff which is nonsense.
  - jw1224 5y ago
    > the vast majority of retail are buying calls This is almost certainly NOT the case. Do you have any data to back this statement up? The MOASS theory relies simply on retail investors buying and holding shares. On the rare occasion when someone posts to Superstonk about their GME options, the user is quickly warned against them, without fail, every single time I’ve seen it happen. Retail investors were no doubt trading options through Robinhood back in January. But after all the drama back then, Robinhood has since suffered a mass exodus of users to different brokerages. It’s clear from spending any time at places like Superstonk that retail investors who’ve read any of the DD have moved away from RH en masse. There was a big push across the community to do this back in February, but I appreciate this isn’t obvious knowledge to someone who hasn’t kept up-to-speed with it for the past 6 months. Options are normally only ever mentioned by uninformed new users.
    - 5y ago
paulpauper 5y ago
Also, many hedge funds are betting on GME going up. To say that this GME rally hurts hedge funds demonstrates a lack of understanding about the market.
gifnamething 5y ago
Whether or not it's true is irrelevant. The point about the motivations and beliefs of the traders.

skybrian 5y ago

I agree that it’s not nihilism when some people really believe it. It might still be nonsense though, or a mixture of some sort. This is the sort of thing many people stay away from because dumb heuristics say it’s probably nonsense and therefore it’s not worth investigating, and some stranger on the Internet saying “no, there is something to it” isn’t enough to move the needle on being actually curious enough to investigate. Someone with a reputation for not being fooled would have to look into it and explain why, actually, it’s not nonsense. More: https://slatestarcodex.com/2019/06/03/repost-epistemic-learned-helplessness/ https://slatestarcodex.com/2019/06/03/repost-epistemic-learn...

jw1224 5y ago
Thankfully users at Superstonk are generally very open to “conflicting DD”, and have reached out to several industry experts to conduct interviews and learn more about the mechanics. The interviews so far have been extremely helpful in confirming many aspects of the theory, reinforcing the hypothesis that shorts never covered. They’ve also been great opportunities for experts to correct any errors, red herrings, or misinformation in the community’s DD, which hadn’t already been picked up by other users. Here’s one with Dr Susanne Trimbath, author of the book “Naked, Short and Greedy: Wall Street’s Failure to Deliver”. Her many other qualifications can be found in the video description: https://youtu.be/fGVY2Kco8ng https://youtu.be/fGVY2Kco8ng
- skybrian 5y ago
  Thanks. I’m not actually curious (for reasons explained in my previous post) but maybe it will help someone who is?