Board 8 > Stock Topic 18

(+) Yeah! (+)

I thought it might be a slow start on monday, since it's really only been one or two business days since the robinhood shenanigans, and that seems a bit too fast for users to get new accounts set up and money transferred over. This is a bit surprising - are other institutions driving this or is this still retail investors?

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CoolCly posted...

I thought it might be a slow start on monday, since it's really only been one or two business days since the robinhood shenanigans, and that seems a bit too fast for users to get new accounts set up and money transferred over. This is a bit surprising - are other institutions driving this or is this still retail investors?

This is Germany and low volume so it wouldn't be Robinhood traders in any case. But yeah, there are very likely a bunch of hedge funds in this now on the long side.

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Honestly hedge funds are probably mostly driving both stocks at this point, but I especially am counting on them for pumping the fuck out of AMC.

I hate it to break it to you but that's the reality. It's literally in the title of what they do - hedge funds. These guys can be losing a huge short position but hedging with long positions and as long as they have the funds to pay margin interest rates, they can probably hold off on closing their short position for long enough, since their long position is making money back.

Now that I know how short squeezes actually work, that's my personal theory on why all the blue chip stocks are down - not to pay margin interest, but to buy more GME and AMC because their long position was down.

I could be completely wrong. But if I'm not, just don't let the secret get out and we'll all get rich anyway. Melvin certainly got fucked from billions, I just don't think it's going to be as sweet as sending them to bankruptcy.

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StartTheMachine posted...

Honestly hedge funds are probably mostly driving both stocks at this point, but I especially am counting on them for pumping the fuck out of AMC.

I hate it to break it to you but that's the reality. It's literally in the title of what they do - hedge funds. These guys can be losing a huge short position but hedging with long positions and as long as they have the funds to pay margin interest rates, they can probably hold off on closing their short position for long enough, since their long position is making money back.

Now that I know how short squeezes actually work, that's my personal theory on why all the blue chip stocks are down - not to pay margin interest, but to buy more GME and AMC because their long position was down.

I could be completely wrong. But if I'm not, just don't let the secret get out and we'll all get rich anyway. Melvin certainly got fucked from billions, I just don't think it's going to be as sweet as sending them to bankruptcy.

It's different funds that would be on the long side. A single fund wouldn't have both long stock and be short. The positions would immediately offset. And even if that kind of position were allowed, it would be dumb, like playing baccarat by putting the same amount of money on both player and banker. Yeah, you won't lose more than 5% of one bet per hand, but you can literally never win no matter what happens. That's a dumb position.

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So how do you calculate the German/US stock price
Just convert Euro to USD?

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red sox 777 posted...

It's different funds that would be on the long side. A single fund wouldn't have both long stock and be short. The positions would immediately offset. And even if that kind of position were allowed, it would be dumb, like playing baccarat by putting the same amount of money on both player and banker. Yeah, you won't lose more than 5% of one bet per hand, but you can literally never win no matter what happens. That's a dumb position.

The positions would immediately offset? Uhhh is a hedge fund only allowed to use one broker or something?

It's not that hard to do. This thing will come tumbling down eventually and theoretically they could win both ways, regarding GME, if they got in early enough long, made massive gains off of that. When GME stops getting new buyers (but also doesn't squeeze) and people start taking profits and it all collapses at once, they close their short position when they're satisfied. But at this point, it's not about winning anymore for them, it's about not getting absolutely destroyed, and hedging their trades is the best way to do that.

I dunno maybe I need more sleep and these are all dumb conspiracies. This is how I would be thinking if I were a hedge fund though

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I wonder if there's a way for short sellers to be "long" on this without contributing to their own demise

Like they could buy stock and benefit from the gains but doing that in significant volume would contribute to hurting themselves in the short position by driving up the price further (and is really just the same as using the shares to settle). But I wonder if there are other options that could benefit from the price increase without actually hurting their short position? If so, I have to imagine they are are doing it. Couldn't they have just bought far calls that expire in a year early on that would have risen with price and just sit on those? They'd have tons of gains that offset with their short losses, and would keep them from being margin called.

That doesn't seem that different from when Lopen offsets his calls with puts or whatever.

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StartTheMachine posted...

The positions would immediately offset? Uhhh is a hedge fund only allowed to use one broker or something?

It's not that hard to do. This thing will come tumbling down eventually and theoretically they could win both ways, regarding GME, if they got in early enough long, made massive gains off of that. When GME stops getting new buyers (but also doesn't squeeze) and people start taking profits and it all collapses at once, they close their short position when they're satisfied. But at this point, it's not about winning anymore for them, it's about not getting absolutely destroyed, and hedging their trades is the best way to do that.

I dunno maybe I need more sleep and these are all dumb conspiracies. This is how I would be thinking if I were a hedge fund though

If they want to cover it's easier to just cover than to be 200% exposed to GME (net 0%). They need more margin set aside for GME to maintain the 200% exposure. Plus they need to pay interest. It just doesn't make sense and they can't make a dime more doing it.

It would make more sense to hedge with deep OTM call options. That one I don't rule out.

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red sox 777 posted...

It would make more sense to hedge with deep OTM call options. That one I don't rule out.

Okay, then that one. I don't know any hedging strategies as I've never done it, but yeah that sounds a lot smarter with bigger percentage winning plays.

My point is that I doubt WSB is sticking it to Wall Street quite as badly as they think are, other hedge funds are getting rich off their mania in the process (that are probably willing to help their buddies like Melvin out) and as long as the madness continues, I just want to get paid.

More than anything though, I feel bad for the first time retail investors who yolo'd 15k and would be millionaires now or close to it that will be the next suicide victims of the market

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Yeah GME doesn't have much steam going for it
AMC on the other hand...

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oh wow, Robinhood is showing AMC up to 16 something

if I had been using serious money instead of a couple hundred dollars I would have a bunch of money between this and dogecoin in the past week
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Considering the moonroof strategy of sell low buy high on AMC here...


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Welp I called that gap up. AMC gonna have a hell of a day.

Disappointed to hear RH is still limiting orders or this thing would really fly. Well, hope most of their users have moved their money around by now.

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If GME keeps plummeting and AMC keeps rising, WSB is going to be very entertaining to watch today.

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I like how AMC is going down a bit...despite there being no one who should be selling.

Like the more I watch the more obvious it is people are manipulating it lol

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bought 170 more at $15.39

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There's absolutely no volume right now so I think that was a good buy.

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Bought 1 share of GME at Friday for 325
Sold it today for 335
$5 purchase commission
$5 sell commission

Total P/L = Literally zero

This is how you make money folks

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I wonder how much I would have spend on commissions the past year if they still existed. Checking my brokerage data, I made 198 trades....so that would come out to about $1,000 at $5/trade commission. Well, not as bad as I thought.

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Man you guys are really brave. I support this whole WSB thing but this is exactly why I'm not touching GME or AMC at all for any reason.

Furious at myself for not putting a few grand into Dogecoin last week though.

It helps that amc has nothing to do with wsb for me

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"GME keeps plummeting" where are you guys seeing that? It hasn't gone below $300 all morning???

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If it were any other stock, a $375 to $300 swing would count as plummeting. With GME, it's less than usual variance.

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Plummeting was a silly word ro use there, yeah.

Hmmm, I'm already +15k at the moment for today. If my account hits 140k again I'm probably not gonna be able to resist selling and waiting for dips.

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Blur I'm holding AMC for you all day today brother let's do this

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If Robinhooders are ever allowed to buy real amounts again, I think we'd soar to ridiculous heights this week. But who knows if that will ever happen!

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They seriously nipped it in the bud on Thursday I'm telling you.

So many low attention span new buyers were flooding in Wednesday night/Thursday morning to buy fractional and when they couldn't, they were just like "eh nevermind then" and we lost them forever.

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also, WSB is absolutely FLOODED with bots and industry shills right now. Never seen the place so divided before this morning. Coordinated attack is coordinated.

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DoomTheGyarados posted...

It helps that amc has nothing to do with wsb for me

And AMC has a lot to do with WSB for me BUT I think it's a buy at $16 without WSB at this point.

WSB just gives us like $100/share upside

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red sox 777 posted...

I wonder how much I would have spend on commissions the past year if they still existed. Checking my brokerage data, I made 198 trades....so that would come out to about $1,000 at $5/trade commission. Well, not as bad as I thought.

I would not have signed up for a TD account if they still did $5 commissions. Screw that noise

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For AMC I am seeing a lot of retail investors interested. Not WSB folks who are serious investors cosplaying as retail investors. I'm talking about my friend from high school who is a history teacher and has a 401k and that's it prior to last week

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ExThaNemesis posted...

They seriously nipped it in the bud on Thursday I'm telling you.

So many low attention span new buyers were flooding in Wednesday night/Thursday morning to buy fractional and when they couldn't, they were just like "eh nevermind then" and we lost them forever.

It is more complicated than the WSB people think though. Like...it should be fucking illegal and the SEC is looking into it (who knows which side they come down on), but it has more to do with clearing houses that brokers work with not having the capital to support the volume these stocks were trading at. It's kinda complicated and I don't fully understand it myself, but here's a good watch if you want to get a better grasp:

https://youtu.be/MAqxQe0l4g0

That said, the whole "Robinhood is working with hedge funds" narrative is only going to help more people revolt buy, so I can't complain about ignorance here.

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masterplum posted...

For AMC I am seeing a lot of retail investors interested. Not WSB folks who are serious investors cosplaying as retail investors. I'm talking about my friend from high school who is a history teacher and has a 401k and that's it prior to last week

Precisely why I liked this play better

Eventually the whales at WSB will leave the newbies at WSB with the bag if GME continues to trade sideways. I hate to say it and hope I'm wrong, but human nature is what it is.

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StartTheMachine posted...

That said, the whole "Robinhood is working with hedge funds" narrative is only going to help more people revolt buy, so I can't complain about ignorance here.

The fix Robinhood made doesn't make sense if they're not with the hedges. If it was as simple as volume all Robinhood would have to do is require funds to be settled to invest more in AMC/GME etc

The way it's implemented is absolutely hedge conspiracy. This clearinghouse stuff is a front to try and get out without being sued/fined into the earth

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There is a chance I think that the SEC comes in and shuts things down which will cause AMC to plummet, but I also think there's a chance AMC soars to 50 or so, so the upside outweighs the down side in my mind.

I'm going to start selling a little at a time starting at 20 though.

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How can the SEC shut things down without freezing the price? If they decide to shut trading down on GME/AMC, things should be frozen so people can get out without losing everything.

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https://www.sec.gov/oiea/investor-alerts-and-bulletins/risks-short-term-trading-based-social-media-investor-alert

In other instances, fraudsters start negative rumors urging investors to sell their shares so that the stock price plummets and then the fraudsters take advantage of buying shares at the artificially low price.

Happy the SEC is publicly talking about this.

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StartTheMachine posted...

Precisely why I liked this play better

Eventually the whales at WSB will leave the newbies at WSB with the bag if GME continues to trade sideways. I hate to say it and hope I'm wrong, but human nature is what it is.

I don't see it. We've gained so much new support from crypto guys and mini-celebs that we should have another massive influx today. I'm sure there'll be a dip like always as the hedgies try to scare us off but we'll be okay.

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Good luck with those stocks! Id have considered joining in but Vanguard is still in the middle of authorizing my account.

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Lopen posted...

The fix Robinhood made doesn't make sense if they're not with the hedges. If it was as simple as volume all Robinhood would have to do is require funds to be settled to invest more in AMC/GME etc

The way it's implemented is absolutely hedge conspiracy. This clearinghouse stuff is a front to try and get out without being sued/fined into the earth

You should watch that video in case you're wrong because it's pretty thorough. Also Chamanth's podcast goes deep into it and they get in that exact debate about the point that you made:

https://youtu.be/rWEPSKkkdKQ

I genuinely think these guys understand this stuff better than we probably do, but either scenario wouldn't surprise me.

Learning about how RH gets paid though is possibly even more damning than them limiting buys on stocks. Somehow. Holy shit. The fact that selling data is their business model was corrupt as fuck as it is, so yeah, would love to see them go down for good.

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Robinhood's connections to Citadel/Melvin are way too fishy to explain that situation any other way IMO

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ExThaNemesis posted...

How can the SEC shut things down without freezing the price? If they decide to shut trading down on GME/AMC, things should be frozen so people can get out without losing everything.

Nobody would buy at a frozen price


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SEC doing anything with AMC would just be strange. It's not even overpriced.

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If there is a trading halt and you have straight shares, fully paid for with cash, you should be fine. The shorts are still stuck and they need an active market to cover. If you have options or have bought on margin you could get screwed.

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Even if the "truth" is that "clearing houses have infinite money tied up so it becomes too expensive to buy stocks" that doesn't change the fact that a fundamental flaw with the system has been discovered in this. People are not being allowed to spend their own money on something that they want to buy with their money. And it isn't that it's "sold out", it's just middle-man fuckery that has somehow created a situation where the stocks can be SOLD but not BOUGHT which can predictably only impact the market it one way.

Even if you have to give RH a pass because it isn't their "fault" in the most direct sense, the system is still borked for this to have occurred at all.

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ExThaNemesis posted...

Robinhood's connections to Citadel/Melvin are way too fishy to explain that situation any other way IMO

Yeah basically this. They sell all their users' data to places like them which is the bigger story in the first place

Though I mean allowing a stock only be sold in not bought is pretty goddamn unprecedented

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just absolutely criminal that I can't buy more shares of AMC now

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You can no longer exercise contracts to get over the share maximum and I can no longer sell calls as I'm above the contract minimum

Hurry up and get my money etrade dammit

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AMC rocket moon diamond

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Td just crashed. Boo

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