I guess it could be possible with extreme leverage? But not sure what it gains them.
Suppose I have $100 to short GME. I could use it to open a short position in GME of $100. I see there is some ETF that holds 100 stocks, including GME. To gain the same short exposure to GME by shorting that ETF, I would need to short $10,000 worth of it. So I borrow $19,800 so that I now have a total of $19,900. I spend $10,000 shorting the ETF and I spend the other $9,900 buying $100 each in the other 99 stocks in the ETF. I now have a net position equivalent to the original $100 short position in GME, by using 199x leverage.
Now let's say GME goes to the moon and reaches $1,000 (20x). The other 99 stocks stay where they are. That ETF will rise about 20% from this. So a 20% loss on $10,000 is.....$2,000, or 20 times my equity. So I still go bankrupt. I still get margin called long before this. Not sure what I've gained here, other than maybe disguising the short position.
So yeah, this feels like grasping at straws.
Yep. And even if they short sold at the peak of $98 when everything went down, the gain when it stabilized back to $80 is pretty low, and I can't imagine GME is gonna drive the ETF any lower.
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The batman villians all seem to be one big joke that batman refuses to laugh at - SantaRPG