GameStop : GME

[Trader Pat]

It all smells like a massive pump & dump to me.

[jimibt]

It all smells like a massive pump & dump to me.

in many ways it will end up just that... however, this is mainly a flash mob *two fingers up* to the hedge funds event. driven initially by reddit users and then of course, picked up to a certain extent by the mainstream. eventually, the establishment will prevail alas and emergency measures will be put in place to halt this *egalitarian* pursuit...

[Trader Pat]

It all smells like a massive pump & dump to me.

in many ways it will end up just that... however, this is mainly a flash mob *two fingers up* to the hedge funds event. driven initially by reddit users and then of course, picked up to a certain extent by the mainstream. eventually, the establishment will prevail alas and emergency measures will be put in place to halt this *egalitarian* pursuit...

That's how it started but its turned into something completely different. When the arse falls out of this stock and it ends up back where it started its the people with the deep pockets who'll make a killing and the amateur investors will be left with their dick in their hand wondering what happened.

[jimibt]

It all smells like a massive pump & dump to me.

in many ways it will end up just that... however, this is mainly a flash mob *two fingers up* to the hedge funds event. driven initially by reddit users and then of course, picked up to a certain extent by the mainstream. eventually, the establishment will prevail alas and emergency measures will be put in place to halt this *egalitarian* pursuit...

That's how it started but its turned into something completely different. When the arse falls out of this stock and it ends up back where it started its the people with the deep pockets who'll make a killing and the amateur investors will be left with their dick in their hand wondering what happened.

true -i was thinking more of the wider picture (outside of GAM)... but yeah, the old adage holds true, when the taxi driver is pushing, it's time to pull!!

[jamesg46]

It all smells like a massive pump & dump to me.

100% a deliberate pump, no question about that (those doing it know they're doing it) but the reason is to punish highly leveraged hedge funds... the margin calls have created the need for billion dollar bail outs. The people who I feel for the most are those that were oblivious trading options contracts, some of those people didn't see this coming and were happily selling lottery ticket bets to the every day guy... well all those lottery tickets are being cashed in. People selling contracts now have to cover by buying shares & so do the hedge funds... the float is only 27 million, so these YOLO people are holding their shares so those hedge funds/option contract sellers can't cover... hence the conspiracy that brokers stopped people from buying stock and only allowing it to be sold, which would create liquidity of stock back into the open market.

[Trader Pat]

It all smells like a massive pump & dump to me.

100% a deliberate pump, no question about that (those doing it know they're doing it) but the reason is to punish highly leveraged hedge funds... the margin calls have created the need for billion dollar bail outs. The people who I feel for the most are those that were oblivious trading options contracts, some of those people didn't see this coming and were happily selling lottery ticket bets to the every day guy... well all those lottery tickets are being cashed in. People selling contracts now have to cover by buying shares & so do the hedge funds... the float is only 27 million, so these YOLO people are holding their shares so those hedge funds/option contract sellers can't cover... hence the conspiracy that brokers stopped people from buying stock and only allowing it to be sold, which would create liquidity of stock back into the open market.

Its a great story but unfortunately those hard working people who have a few thousand dollars to invest are the ones who'll get burned because most of them won't have bought at the bottom and won't have the nous to sell while they're in profit.

The people who are doing the real pump and dump are those who are now encouraging others to buy.

As a strategy going forward I'm not sure how viable it will be, I'm sure the hedge funds will argue its illegal.

[jamesg46]

It all smells like a massive pump & dump to me.

100% a deliberate pump, no question about that (those doing it know they're doing it) but the reason is to punish highly leveraged hedge funds... the margin calls have created the need for billion dollar bail outs. The people who I feel for the most are those that were oblivious trading options contracts, some of those people didn't see this coming and were happily selling lottery ticket bets to the every day guy... well all those lottery tickets are being cashed in. People selling contracts now have to cover by buying shares & so do the hedge funds... the float is only 27 million, so these YOLO people are holding their shares so those hedge funds/option contract sellers can't cover... hence the conspiracy that brokers stopped people from buying stock and only allowing it to be sold, which would create liquidity of stock back into the open market.

Its a great story but unfortunately those hard working people who have a few thousand dollars to invest are the ones who'll get burned because most of them won't have bought at the bottom and won't have the nous to sell while they're in profit.

The people who are doing the real pump and dump are those who are now encouraging others to buy.

As a strategy going forward I'm not sure how viable it will be, I'm sure the hedge funds will argue its illegal.

I get what you're saying and it's true but the point is the majority of the people (little guy) know what they're into... they're openly calling themselves "The Retards" out of sarcasm and obviously the YOLO speaks for itself. This will dump at some point and people will get burned, but if you scroll through the comments on social media they're openly saying that they know this and don't care... they're "The Retards proving a point" - not my words BTW.

[Trader Pat]

I get what you're saying and it's true but the point is the majority of the people (little guy) know what they're into... they're openly calling themselves "The Retards" out of sarcasm and obviously the YOLO speaks for itself. This will dump at some point and people will get burned, but if you scroll through the comments on social media they're openly saying that they know this and don't care... they're "The Retards proving a point" - not my words BTW.

No I agree with but most of those people will have been on from near the start. I'm talking more about the people who don't even know what a forum is, who have just seen this on the news as its obviously getting massive media attention in the States. They're the ones who are probably less aware of the dangers and will think the price will just keep going up.

[jamesg46]

I get what you're saying and it's true but the point is the majority of the people (little guy) know what they're into... they're openly calling themselves "The Retards" out of sarcasm and obviously the YOLO speaks for itself. This will dump at some point and people will get burned, but if you scroll through the comments on social media they're openly saying that they know this and don't care... they're "The Retards proving a point" - not my words BTW.

No I agree with but most of those people will have been on from near the start. I'm talking more about the people who don't even know what a forum is, who have just seen this on the news as its obviously getting massive media attention in the States. They're the ones who are probably less aware of the dangers and will think the price will just keep going up.

I guess that's the risk of speculation but yes I also feel sorry for anyone blissfully unaware of whats going on... luckily brokers restricted margin on it.

[napshnap]

This whole situation with brokers cutting off their customers' ability to buy certain shares...

[marksmeets302]

Sorry just re read this and realised you said 300+ on leverage... totally right to close them positions imo to mitigate risk. It's not just those positions that they're closing though if you believe what's said in sm land.

I hadn't thought of this but as an article on zerohedgehttps://www.zerohedge.com/markets/cash- ... llion-rich points out, the stock doesn't even have to go down for the brokers to have a problem. The reason is the clearing requires them to post money for trades that are still unsettled. Normally that isn't such a problem but because the amount depends on the 2-day value at risk this figure has exploded (the value at risk measure depends on the volatility of the underlying). And they can't use their customers money for that. In other words: RH have to carry the extra collateral for all their customers positions in extremely volatile stocks for as long as the trades are not settled.

[jamesg46]

Sorry just re read this and realised you said 300+ on leverage... totally right to close them positions imo to mitigate risk. It's not just those positions that they're closing though if you believe what's said in sm land.

I hadn't thought of this but as an article on zerohedgehttps://www.zerohedge.com/markets/cash- ... llion-rich points out, the stock doesn't even have to go down for the brokers to have a problem. The reason is the clearing requires them to post money for trades that are still unsettled. Normally that isn't such a problem but because the amount depends on the 2-day value at risk this figure has exploded (the value at risk measure depends on the volatility of the underlying). And they can't use their customers money for that. In other words: RH have to carry the extra collateral for all their customers positions in extremely volatile stocks for as long as the trades are not settled.

So when RH said they were protecting customers what they really meant was they're covering their own backside?

Edit: which would also lend weight to the stories that they've had to lend 100s of millions from banks. They had to do it in order to comply to regulations but in order to comply they turned off the open market.

[marksmeets302]

So when RH said they were protecting customers what they really meant was they're covering their own backside?

Edit: which would also lend weight to the stories that they've had to lend 100s of millions from banks. They had to do it in order to comply to regulations but in order to comply they turned off the open market.

Exactly, they were forced to take these steps. In finance there's never "we do this in the interest of our customers". It's either because they profit from it or are forced to do so by law or regulators. That may not sound very nice, but as a client at least you can have very clear expectations about how a company will operate. I like it that way.

[Trader Pat]

I'm sure the fact that one of Robinhood's biggest investors is a hedge fund that had a big short position might have something to do with it

[jimibt]

I'm sure the fact that one of Robinhood's biggest investors is a hedge fund that had a big short position might have something to do with it

yes, exactly... this was one of my 1st thoughts. *oh what a tangled web we weave when first we practice to deceive*