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Shorted Stocks

Cute Hoor

I am going to suggest that we have a separate topic for the Shorting phenomena, and leave the Share Picks 2021 for the normal run of the mill stuff, might make it easier to follow both.

Feel free to ignore my suggestion of course

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Shedite27 wrote: »

I don't hear anyone saying that

Sorry, it was just my naivety in thinking people were investing in a cheap stock because they thought the company would recover, like AMD.

phunks

Can anyone explain what happens on Friday if these hedge funds literally can't close out their shorts. i.e. they don't have the funds if they reach 5k a share or if simply everyone was to hold and they didn't even have the option to cover.

Complete noob but it's fascinating to watch

Timing belt

phunks wrote: »

Can anyone explain what happens on Friday if these hedge funds literally can't close out their shorts. i.e. they don't have the funds if they reach 5k a share or if simply everyone was to hold and they didn't even have the option to cover.

Complete noob but it's fascinating to watch

If the hedge funds have a short position they will need to post margin with the dealer/Broker to cover a situation of a default in the Terms and conditions of the Trade. If the hedge fund defaulted on the trade then the broker would be covered with the margin.

Bodjhrjekekr

Timing belt wrote: »

If the hedge funds have a short position they will need to post margin with the dealer/Broker to cover a situation of a default in the Terms and conditions of the Trade. If the hedge fund defaulted on the trade then the broker would be covered with the margin.

I'm also a noob but have been reading that it might be extended to next week?

VinLieger

Bodjhrjekekr wrote: »

I'm also a noob but have been reading that it might be extended to next week?

It really depends on how things go after the rules were changed in the last hour, they've banned all the meme stocks from being bought on the retail apps, so basically people can sell but cant rebuy which is whats been keeping the prices high, if the market opens and dips and there's no retail to buy back the free shares then its probably gonna cascade down

inisfree0504

If it’s potentially the broker that is left to foot the bill in event of a hedge fund default, and it’s often discount brokers that facilitate shorting, then does that explain why discount brokers would want to block buys and suppress price of those stocks? Am I understanding this right?

Timing belt

inisfree0504 wrote: »

If it’s potentially the broker that is left to foot the bill in event of a hedge fund default, and it’s often discount brokers that facilitate shorting, then does that explain why discount brokers would want to block buys and suppress price of those stocks? Am I understanding this right?

the Broker doesn't foot the bill... the hedge fund would as they have posted margin (bonds/shares/cash) with the broker that in the event of a default the broker would take ownership of.

Looptheloop30

The tax man will be willing us all on

Squeeonline

Mad stonks.

Musk's tweet definitely drove things more to the mainstream.

Dickerty

I was aware of this a few days ago, but only did the full reading yesterday, so I'm late to the party. Hope there is a still a few multiples of my investment available. Also have a small bet on AMC and BB being next...

Shedite27

Disclosure, I own AMC and NOK, but I would not be buying more "shorted stocks" today

bluemachaveli

AMC just released 44.4 millions share in place of debt. Could send it either way.

dpforce

AMC already trading in pre market @13 and GME @285
There will a lot of blood spilled in tranding212, revolut and robinhood accounts when everybody will try to dump their shares.....

JazzyJ

dpforce wrote: »

AMC already trading in pre market @13 and GME @285
There will a lot of blood spilled in tranding212, revolut and robinhood accounts when everybody will try to dump their shares.....

It was at 470 only an hour or two ago in the pre-market trading.

timmyntc

JazzyJ wrote: »

It was at 470 only an hour or two ago in the pre-market trading.

Brokers locking people out from buying has likely spooked a lot of people.
Also prevents price from trending upwards, unless "other players" dictate it.

Dr Turk Turkelton

Lol Gamestop halted one minute after opening!

rapul

Very interesting to watch from the sidelines the whole gamestop fiasco, the start of something bigger, who knows.

dpforce

$200 move up on very light volume. I would bet on huge spike on the charts by the end of the day.
In reality - when all this madness is over, price will revert back to mean.

Bikerman2019

I just bought 50 dollars via revolut to see what happens. Trade declined and money returned.

JazzyJ

dpforce wrote: »

$200 move up on very light volume. I would bet on huge spike on the charts by the end of the day.
In reality - when all this madness is over, price will revert back to mean.

It's dropped about 50 since then - its all over the place.

Dickerty

It was a DELIBERATE action by multiple trading apps/sites to block buy actions on Gamestop stock, so many casual traders panicked and sold. They knew the volatility would work to stop the trading.

Market manipulation against the masses!

is_that_so

Here's a BBC update, now other targets as well it seems.

https://www.bbc.com/news/business-55837519

bluemachaveli

Atlas_IRL wrote: »

degiro have suspended buying for amc and gme

I got a message saying you can only buy with limit orders. Should still work with that.

Bodjhrjekekr

so basically there could have been collusion with some hedge funds and brokers? Hedge funds shorted these stocks for today, brokers stopped buying so had to sell? I mean its a theory but some serious market manipulation went on - all hope is with GME now I think lol

Bodjhrjekekr

is_that_so wrote: »

Here's a BBC update, now other targets as well it seems.

https://www.bbc.com/news/business-55837519

From that article "Regulators are watching" - I hope they bloody are!!

crushproof

Moral of story, don't fk with Wall Street

Gwanoman

Fair play to the people who took on Wall Street I say..

AMC down to 7$. I sincerely hope these guys weren't in up to their necks and if they bought low, they can still get out with a win...

growleaves

crushproof wrote: »

Moral of story, don't fk with Wall Street

Lol

In this case Wall Street could not rescue itself without exposing its manipulation of the markets.

dpforce

Bodjhrjekekr wrote: »

so basically there could have been collusion with some hedge funds and brokers? Hedge funds shorted these stocks for today, brokers stopped buying so had to sell? I mean its a theory but some serious market manipulation went on - all hope is with GME now I think lol

Brokers only facilitate trade between buyers and sellers.
The way short selling works - after securing required position, short sellers go public and start promoting their side of the story in a hope to change market sentiment to drive price down. Unfortunately for them - some fellas on reddit decided to go against them. But then big boys with deep pocket joined the show to make money at short sellers expense.
Also need to take into consideration how options sellers hedging their exposure.

Bodjhrjekekr

dpforce wrote: »

Brokers only facilitate trade between buyers and sellers.
The way short selling works - after securing required position, short sellers go public and start promoting their side of the story in a hope to change market sentiment to drive price down. Unfortunately for them - some fellas on reddit decided to go against them. But then big boys with deep pocket joined the show to make money at short sellers expense.
Also need to take into consideration how options sellers hedging their exposure.

But the brokers stopped the buying so aren't facilitating it, that's what I mean