I invest a little (very little) from each check in stocks on Robinhood/stash and a lady at my job made a ton with gamestock. Why is there so much outrage if a bunch of ppl buy a stock? I have like five thousand dogecoins and I see that has doubled in price.
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Because the plebs are making too much money and causing the elites to lose money. The goyim aren't supposed to be bankrupting Jews.
I had to go see what Jew Shapiro had to say and he did not disappoint. It was o the poor hedge fund managers that are just saints and offer such a good value for society and the bad people of reddit did this thing that is so not good for society.
The Hedge Fund guys went overboard with Short Positioning. They sold more shorts than there are shares of stock. Shorts are effectively "borrowing with the promise to buy it at value later, expecting it to decrease in value." Except once WSB went in, the value SKYROCKETED, and what would have cost them $20/share was looking like it would cost them $350/share. Now multiply the difference by ten million shares. That is how much of a loss the hedge fund is taking.
You've got some good responses here with respect to how it all works. I'll try to give an idea why at least in my opinion those of us our our side (sanity and free markets) are pissed. With respect to what's happening to the stock price it's all legal and I think most of us were just laughing.
But now, you've got trading platforms just straight up restricting transactions because they want to. Not because the SEC or the law tells them to, but to save their friends or side investments. Robinhood and TD Ameritrade are the ones getting the press for doing this.
There are reasonable restrictions a brokerage could do examples:
Then we have the unreasonable stuff, the main one being like what I'm hearing about Robinhood, in that for these certain stocks (e.g. GME) you can only sell them. They are just straight up not processing anything but sales. I'm not sure it's legal in the pre-one-party state sense. That's not to say that any order you put in is guaranteed to be filled, but you know allow the order. In a general sense a common market order for quantities most of us would be dealing with will get filled. If you do limit orders like I usually do, as soon as the Bid or Ask with enough quantity hits your limit price, you expect it to get filled.
A brokerage telling me they have decided they will not process legal orders as I have written them is one that would be losing my business. It's just way too much of a slippery slope. What happens when there's a huge drop and I want to sell on the way down, or more like me I want to buy some stuff after the huge drop for bargain prices, and they tell me "nah, we've decided you can't place that order because it doesn't benefit us"?
Is there any point for me to buy GME right now?
My opinion, no, I think the boat has been missed on it and now that a lot of the brokerages are limiting it then being able to manipulate the price up has lost some of it's strength. I'm not a super risky investor or a wall street bettor though. The underlying situation of it being way over-shorted is still out there, so I suppose it could still be squeezed again. Probably better to look for some stock gambler types over me to ask about it.
Yes: sticking it to the man!
Thanks for the breakdown. I get why regular people are pissed with the brokers.
Yeah it's one of those type things when you have AOC and Ted Cruz agreeing on something you know it's totally screwed up. Because at the very least it seems for politicians both of those stick to their principles or lack thereof.
Imagine the main characters of The Producers owned a TV network and, when their plan to deliberately crash the show failed, they immediately put out a report that everyone who enjoyed Springtime for Hitler was a literal Nazi.
All to salvage their plan to crash the show (and put everyone working on it on the street) for their own financial gain.
The way I understand it is like this.
Hedge fund "borrows" Gamestop stocks valued at $4 a piece or whatever.
They sell them at $4 a piece, expecting the stock to eventually crash, and then they'll buy them back at $0.10 a piece, and return them.
They keep the $3.90 per stock they've made in profit.
A bunch of mad lads saw this, and drove the price of the stock up, now around $400 a piece.
The hedge fund still has to return all the stocks they borrowed and therefore has to buy them, but now they cost $400 a piece, and they only made $4 a piece selling them, putting them $396 down for each stock. Basically they're losing a crapload of money.
Lmao
Almost 140% actually.
this. with the addition that you can borrow more stocks than the actual amount of stocks possible because "finance magic"
That's "naked" short-selling. It is illegal, and a shit ton of it was going on-- especially with regards to $gme. The figure I heard was 127% of the available shares were shorted, but I've heard higher as well. Anything over 100% is supposed to not be legal.
tl;dr: Someone got caught with their dick in the cookie jar.
Thanks!
The Hill is usually left wing drivel but they are spot on here
Some hedge fund gambled that the stock would lose value, as they borrowed the stock then sold it. They have to give it back within a set time. WSB finds out, and artificially inflates the value of the stock by having many people buy it at once. The hedge fund now has to buy back the stock and give it back to the owner, losing billions, which has drained their finances.
Simply put, they took a gamble, lost because of WSB, and don't have the money to pay back the stock.
And this is behavior that Wall Street firms pull every chance they get. If they find out another firm is up a creek on a particular trade, word spreads like wildfire and everyone bets against them. But when the little guys do it? Oh no, no, no.