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| Topic | Explain the Gamestop situation like I'm ten and barely understand stocks |
| averagejoel 01/27/21 9:24:35 PM #15: | the stock market is basically a big roulette wheel where each stock is a different number on the board. the payout structure is such that the optimal play is to bet [total investment] */ n dollars on each space, where n is the number of squares on the board. that's more or less what a hedge fund is.a "short" is borrowing shares that someone else owns, selling them, and hoping you can buy the shares back for cheaper to make money on the difference. essentially making a bet that the price will tank. so basically what happened is this: hedge funds took out bets that $GME would decrease in value. the subreddit decided to start way overpaying for shares in order to fuck over the hedge funds the stock price is now so inflated that it's about to cause those hedge funds to implode because they can't cover the cost of their bets anymore --- peanut butter and dick ... Copied to Clipboard! |
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