GameStop (GME) Insane Ride

[Jauronimo]

Just now, Mark80 said:

 

Restricting purchase of options is WAY different than restricting purchases of stock.  I wouldn't have been upset if it was just the options, but it was flat out buying the stocks as well that was shut down which is complete and utter BS.

In what way is it different and how does that change the scenario I described above?

[Mark80]

10 minutes ago, Jauronimo said:

In what way is it different and how does that change the scenario I described above?

 

Because you aren't borrowing any money when you purchase a stock.  You own it, you don't owe anything you have to pay back, thus limiting your risk significantly.  I can see them being worried with an option that they wouldn't have the money to pay for them if the price crashed.  I am not an option expert and if I am wrong please inform me as I like learning.

 

Basically the opposite of shorting except instead of an unlimited ceiling of risk for shorters, there is a limit on floor risk since you can't go lower than $0.  I think they are concerned with inability to cover the option losses if it crashes, no?

Edited January 29, 2021 by Mark80

[Jauronimo]

Just now, Mark80 said:

 

Because you aren't borrowing any money when you purchase a stock.  You own it, you don't owe anything you have to pay back, thus limiting your risk significantly.  I can see them being worried with an option that they wouldn't have the money to pay for them if the price crashed.  I am not an option expert and if I am wrong please inform me as I like learning.

If you're buying stock on margin you're borrowing money.  Buying on margin in the most volatile stock on the market could easily amount in substantial losses that individuals cannot cover.  

 

The stoppage in trading is because RobinHood has to have sufficient capital on hand or the clearinghouse won't process the trades.  The amount of capital the clearing house will require the broker to hold is a direct function of the volatility as I understand it.  

 

This is hardly the first time that brokers have stopped out trading certain equities with crazy volatility and absurd trading activity.  

[4merper4mer]

1 hour ago, Jauronimo said:

The explanation I got on brokerages shutting down yesterday from a close friend who works in the industry and knows his stuff:

 

The real reason RobinHood shut off yesterday is because they ran out of money.  They have to post capital to the clearinghouse.  The amount of capital they have to post is a function of volatility [insert Bloomberg screen shot showing GME's volatility which is off the charts like in the 1,000%].  When you over index to this type of garbage AND you offer cheap margin to customers, you get stopped out.

That is completely backwards.  The most a short seller can make is the amount of the Strike Price - $0, theoretically.  Its actually even less upside because you need to buy back shares before delisting or bankruptcy.  Their downside risk is unlimited as price per share is uncapped.  

 

Also, don't believe everything you read on twitter and check out the explanation I just posted for RH suspending certain trades.  Remember RobinHood offers margin accounts and there are a ton of people playing a dangerous game with borrowed money.  

The limited loss comes in if trading platforms prohibit other people from buying.  It wasn’t just Robinhood that turned off GME and Robinhood still allowed trades on other stocks.  They didn’t “shut off”.

[Doc Brown]

3 hours ago, Jauronimo said:

If you're buying stock on margin you're borrowing money.  Buying on margin in the most volatile stock on the market could easily amount in substantial losses that individuals cannot cover.  

 

The stoppage in trading is because RobinHood has to have sufficient capital on hand or the clearinghouse won't process the trades.  The amount of capital the clearing house will require the broker to hold is a direct function of the volatility as I understand it.  

 

This is hardly the first time that brokers have stopped out trading certain equities with crazy volatility and absurd trading activity.  

That's what probably happened.  RobinHood is the equivalent of a rookie QB that ran into a Bill Beichick defense for the first time.

Edited January 29, 2021 by Doc Brown

[Jauronimo]

4 hours ago, 4merper4mer said:

The limited loss comes in if trading platforms prohibit other people from buying.  It wasn’t just Robinhood that turned off GME and Robinhood still allowed trades on other stocks.  They didn’t “shut off”.

You don't think the other brokerage houses weren't effected by 1,000% volatility in GME?  People who know how clearing houses work say capital requirements but Twitter and AOC say RobinHood conspired with hedge funds to slap the tendies out of your hands.

 

https://www.barrons.com/articles/gamestop-stock-short-squeeze-robinhood-51611930375?mod=hp_LEAD_2

 

Quote

Robinhood CEO Vladimir Tenev, for his part, went on CNBC and said his firm restricted trading in 13 stocks, not at the direction of any fund, but because brokers have capital requirements like other financial institution. Volatility can wreak havoc on required capital ratios. Volatility makes it tough to run a business where most of the money to run it is, essentially, debt. Don’t forget many stocks are bought on margin. Stocks swinging 100% in a day make it tougher to manage all that.

 

[US Egg]

My wife mentioned this GameStop thing today.

 

I said "oh well, I guessed we missed it".

 

We'll be alright financially.....?

[T&C]

Silver is the new Gamestop:

 

https://www.baynews9.com/fl/tampa/business/2021/02/01/silver-is-the-new-gamestop--price-boosted-by-online-movement

[Mark80]

No one on WSBs is on silver.  False narrative to distract from the real mission at hand.  Gamestop.  Just more market manipulation through lies by the hedgies and their bought and paid for media stooges.

[Jauronimo]

1 hour ago, Mark80 said:

No one on WSBs is on silver.  False narrative to distract from the real mission at hand.  Gamestop.  Just more market manipulation through lies by the hedgies and their bought and paid for media stooges.

You buying more?

[Chef Jim]

1 hour ago, Mark80 said:

No one on WSBs is on silver.  False narrative to distract from the real mission at hand.  Gamestop.  Just more market manipulation through lies by the hedgies and their bought and paid for media stooges.

 

I'm late to the discussion but not the story.  What exactly is the "real mission at hand"? 

[Just Jack]

2 hours ago, Chef Jim said:

 

I'm late to the discussion but not the story.  What exactly is the "real mission at hand"? 

 

To make money by getting others to pump up the stock so that you can sell it. 

[GoBills808]

 

The 'hedgies' lol

 

[Doc]

4 hours ago, Chef Jim said:

I'm late to the discussion but not the story.  What exactly is the "real mission at hand"? 

 

To lose interest in GME so the stock falls and their short positions don't incur more massive losses.

[Mark80]

8 hours ago, Doc said:

 

To lose interest in GME so the stock falls and their short positions don't incur more massive losses.

 

To add that, the real mission is to have people buy and hold their stock until the shorts expire and they are required to buy shares that no one is selling causing the price to skyrocket, literally bankrupting the short sellers.  They have continued to double down by shorting more and more.  Eventually, the shorts won't be available either and, if people hold, they are F'd.

 

Has nothing to do with Pump and Dump.  Look at how few shares are actually trading.  Retail investors are holding.  Hedge funds are manipulating prices amongst themselves to try and drive it down 100 shares at a time.  Im perfectly fine holding my shares for the rest of Gamestop's existence...or mine.  But if it skyrockets into the 4 figures, we would have won and I'll get out then.

 

Silver is a pump and dump, crypto currency talks are pump and dump, maybe even AMC and Blackberry, but not Gamestop IMO.

13 hours ago, Jauronimo said:

You buying more?

 

Probably not.  I'm comfortable losing 100% of what i put in.  Still super high risk / high reward, but at under $200 right now it is tempting to throw a bit more at it.

Edited February 2, 2021 by Mark80

[Mark80]

Also, all my Robinhood money settled yesterday and I started the transfer to my other accounts.  I'll never again have that app on my phone.  F* them and their BS.

[Jauronimo]

3 hours ago, Mark80 said:

 

To add that, the real mission is to have people buy and hold their stock until the shorts expire and they are required to buy shares that no one is selling causing the price to skyrocket, literally bankrupting the short sellers.  They have continued to double down by shorting more and more.  Eventually, the shorts won't be available either and, if people hold, they are F'd.

 

Has nothing to do with Pump and Dump.  Look at how few shares are actually trading.  Retail investors are holding.  Hedge funds are manipulating prices amongst themselves to try and drive it down 100 shares at a time.  Im perfectly fine holding my shares for the rest of Gamestop's existence...or mine.  But if it skyrockets into the 4 figures, we would have won and I'll get out then.

 

Silver is a pump and dump, crypto currency talks are pump and dump, maybe even AMC and Blackberry, but not Gamestop IMO.

 

Probably not.  I'm comfortable losing 100% of what i put in.  Still super high risk / high reward, but at under $200 right now it is tempting to throw a bit more at it.

https://www.bloomberg.com/news/articles/2021-02-01/gamestop-short-interest-plummets-in-a-sign-traders-are-covering

 

According to IHS and S3 short interest is way down as of Monday.  You sure retail isn't selling? 

[GoBills808]

But...my tendies

[Chef Jim]

13 hours ago, Just Jack said:

 

To make money by getting others to pump up the stock so that you can sell it. 

 

I see. So the mission is to make money regardless of the debris you leave in your wake.  That's what I thought.  

3 hours ago, Mark80 said:

 

To add that, the real mission is to have people buy and hold their stock until the shorts expire and they are required to buy shares that no one is selling causing the price to skyrocket, literally bankrupting the short sellers.  They have continued to double down by shorting more and more.  Eventually, the shorts won't be available either and, if people hold, they are F'd.

 

Has nothing to do with Pump and Dump.  Look at how few shares are actually trading.  Retail investors are holding.  Hedge funds are manipulating prices amongst themselves to try and drive it down 100 shares at a time.  Im perfectly fine holding my shares for the rest of Gamestop's existence...or mine.  But if it skyrockets into the 4 figures, we would have won and I'll get out then.

 

 

 

You're gonna lose.  It's probably going to plummet to double, maybe even single digits.  You're Pop Warner playing against the Chiefs.  

[Mark80]

29 minutes ago, Jauronimo said:

https://www.bloomberg.com/news/articles/2021-02-01/gamestop-short-interest-plummets-in-a-sign-traders-are-covering

 

According to IHS and S3 short interest is way down as of Monday.  You sure retail isn't selling? 

 

Hell no I am not sure.  But I'm still holding.  I'm wondering what the actual float numbers are to see if they changed significantly to alter the percentages or if there are ways to manipulate that data to show what they want.  No doubt that if that is the actual number and all other things are the same, then it is not a good sign.