I get this knee jerk reaction but there is something to be said about the risk analysis, sophistication, etc of said hedge funds. They’re not gambling in the same sense, but sure in some sense they are. Even having an entry level “risk model” is more sophistication than most home traders.

You can’t just dismiss all that as nothing.

Seems like throwing out the baby with the bathwater. Many derivatives are just insurance.

Derivatives involves a lot of betting. It also involves legitimate hedging. A farmer can lock in their revenue, and a manufacturing company can lock in exchange rates.

Which can be viewed as market manipulation. I'm not in US either but it looks pretty dodgy on their part. A key message of all these new trading platforms is that your capital is at risk. Their users know this, so why are they restricting trades?

The T&Cs will almost certainly allow them a huge amount of latitude in what they will let people do with their platform.

Although if a decent amount of retail investors lose money as a result of not being able to sell stock they already own then the blood is in the water for a class action. Saul Goodman is waiting for your call!

That’s a great question, can they unilaterally shutdown trading?

Robinhood is a private company, and are allowed to decide what types of people they want to let trade on their platform.

hide/flag the post and move on

Not to mention any speculators who took short positions yesterday.

Platforms are banning buys for retail, ofc it's going down. If rh and td didnt ban it I bet it would be even higher.

Its easy for a stock to decrease in value when most of the American trading platforms don't allow Americans to buy it.

Matt Levine:

"It seems meaningless to talk about the price of GameStop stock, as though a single number could represent such an elusive concept. GameStop stock has all the prices at once."

We will be reading "I lost all my savings" posts in a few days on reddit. It is for sure GME will hit 30, and those bought it at high will be sharing their real life pain instead of memes.

> Does it matter that your're underwater by 50%? The goal was to beat Wallstreet, They did.

1. If you end up losing money in the end, I'd hardly call that "beating".

2. "wall st" isn't a single entity. The hedge funds shorting GME might have lost money, but there's plenty of companies that made money on the side, eg. the asset management firm that unloaded their GME shares.

They didn't beat wall street, they just dinged a handful of speculators. Who do you think is on the other side of that 50% loss? I am going to assume that a whole bunch of speculators swooped in yesterday to take advantage of the situation and they just walked away with some easy money, courtesy of the WSB crowd.

> The hedgefunds should definitely take note not to play a dangerous game because losing is always on the table.

Taken at face value, this advice boils down to never doing anything that involves a large risk. No civil rights movement, no D-Day invasions, etc.

There's certainly a reminder here about tail risk, and the ability of the market to stay irrational longer than you can stay solvent. However, the takeaway isn't "only take on big risks if failure is impossible." Taking calculated risks is an important life skill, and so is realizing that humans have pretty bad intuitions about risk.

In hindsight, we may find some funds that had 30 different short positions similar to this one. This one position blew up badly, but if the others come out moderately ahead, and they came out ahead net-net, then maybe this just validates their strategy.

The problem is that people were starting to get in for pure speculation. Two friends of mine who don't care at all about Wall Street told me yesterday that they bought in, because they read an explanation of why they're sure to see big gains on Friday. If the goal was just to beat Wall Street, hurt some hedge funds and get egg on a lot of people's faces... like you said, they've already succeeded, so putting a stop to it before speculative investors get hurt seems appropriate.

Well exactly, if you're holding a single share and you lose $200 dollars in the end, obviously it's not the end of the world.

I think the later investors were coming in because they saw the craze on the news, Facebook, Twitter, etc and wanted to get rich quick. I have a few friends who invested yesterday.

Sorry for ignorant question here not acquainted to stock market mechanisms, but: why the time imposition of tomorrow? Who dictates that storters have to return shares and when?

Frankly I thought with puts you state time limits, and with shorts you decide for yourself when you’ll have to give shares back. If that is not so, then I guess I finally understand why everyone says shorts are super risky.

> everyone who bought yesterday is fighting exchanges whose only option for GME is "sell" because buying is restricted

I can’t really understand how the exchange is saying “no, you’re not allowed to buy, but you can sell all you want” is legal.

>I don't know how some of these shorts will find 20 million shares by tomorrow.

you're confusing shorts with options. shorts don't expire. They can be held indefinitely as long as you have the margin to keep up with the losses.

they could always deal with the lenders, which don't gain anything if their borrowers go bankrupt and they won't even get back their pennystock. And I think these lenders already deal with them quite a bit. And obviously there's still a lot of shares with WSB and I don't see how the current situation prevents offering shares for the rocket-like USD1k.