The GameStop phenomenon
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Re: The GameStop phenomenon
Anyway, as I was saying before being interrupted.
Max Keiser was predicting this, literally, years ago.
As he was Bitcoin.......
Max Keiser was predicting this, literally, years ago.
As he was Bitcoin.......
Re: The GameStop phenomenon
What does “Globalist” mean in this context?
Genuine question.
Last edited by Greenmile on Sun Jan 31, 2021 12:06 am, edited 1 time in total.
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Re: The GameStop phenomenon
Ringo - March 2020- "reintroducing borders across Europe that have been got rid of thanks to the Schengen Zone rules will help prevent the spread of Covid-19 "
Lowbankclaret- "that's racist"
Who was proved entirely and utterly correct Lowbank!?
Genuine question.
Last edited by RingoMcCartney on Sat Jan 30, 2021 11:57 pm, edited 1 time in total.
Re: The GameStop phenomenon
Just had a look, Lowbank, and it seems you're right. Overall it's about where it was on Dec 31st. Rose after that for obvious reasons (the you-know-what deal), but it has been on a slide since about the 20th, and the big movements with GME have been happening just this week, so maybe it's just further compounding a downturn that already existed? I don't know. I'm no analyst so people should completely ignore me at their pleasure. I'm all about the rhetoric, babeeeyyy!!!Lowbankclaret wrote: ↑Sat Jan 30, 2021 11:43 pmThe city has been affected, perhaps you have not noticed the FTSE dropped over 3% in 3 days and futures since Friday are down 2.3%.
In the main due to hedge funds having to sell shares to cover the 2.1 billion dollar loss due the Gamestore.
Re: The GameStop phenomenon
Formal subjunctive, indicative of a hypothetical. Nah, think I'm reyt with 'were', mate.
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Re: The GameStop phenomenon
I do watch it closely being retired. That gives me the time to do it.Spiral wrote: ↑Sat Jan 30, 2021 11:57 pmJust had a look, Lowbank, and it seems you're right. Overall it's about where it was on Dec 31st. Rose after that for obvious reasons (the you-know-what deal), but it has been on a slide since about the 20th, and the big movements with GME have been happening just this week, so maybe it's just further compounding a downturn that already existed? I don't know. I'm no analyst so people should completely ignore me at their pleasure. I'm all about the rhetoric, babeeeyyy!!!
But I do have just a shade over 1 million invested , so I am personally interested.
Re: The GameStop phenomenon
Jesus Christ!!!Lowbankclaret wrote: ↑Sun Jan 31, 2021 12:15 amI do watch it closely being retired. That gives me the time to do it.
But I do have just a shade over 1 million invested , so I am personally interested.
Re: The GameStop phenomenon
Good luck!
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Re: The GameStop phenomenon
Last edited by RingoMcCartney on Sun Jan 31, 2021 12:43 am, edited 4 times in total.
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Re: The GameStop phenomenon
Ringo, I will not be drawn into your childish games. You are going to get this thread locked. Please grow up.
Re: The GameStop phenomenon
It’s like one of those tests you got at school - highlight the error in this sentence.
And it only took Ringo three attempts.
And it only took Ringo three attempts.
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Re: The GameStop phenomenon
Ringo - March 2020- "reintroducing borders across Europe that have been got rid of thanks to the Schengen Zone rules will help prevent the spread of Covid-19 "Lowbankclaret wrote: ↑Sun Jan 31, 2021 12:40 amRingo, I will not be drawn into your childish games. You are going to get this thread locked. Please grow up.
Lowbankclaret- "that's racist"
Who was proved entirely and utterly correct Lowbank!?
Genuine question. Please answer.
Re: The GameStop phenomenon
Who are the “Globalists” who have been rumbled, Ringo?
Genuine question (and it’s relevant to this thread). Please answer.
Last edited by Greenmile on Sun Jan 31, 2021 12:50 am, edited 1 time in total.
Re: The GameStop phenomenon
There's definitely been a re-evaluation of the ethics of shorting among a lot of folks, especially the public at large (or among those paying attention to this), and that's great. Noticed there's a research organisation which has been providing short reports for 20 years that called it a day on shorts (now just providing long position research for individual investors) in response to this movement, and like you say, a lot of hedges now need to work the retail/vigilante element into their models. It's almost like sci-fi where overnight a civilisation has the $hit slapped out of it by the aliens and they have to totally rethink how they organise and function.Lowbankclaret wrote: ↑Sun Jan 31, 2021 12:35 amIt’s ok, it’s just the ebb and flow of the markets.
It will blow over.
Some hedge funds have already said they will never short again.
That’s a good thing.
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Re: The GameStop phenomenon
At a gues and this is completely hypothetical.Spiral wrote: ↑Sun Jan 31, 2021 12:49 amThere's definitely been a re-evaluation of the ethics of shorting among a lot of folks — especially the public at large (or among those paying attention to this) — and that's great. Noticed there's a research organisation which has been providing short reports for 20 years that called it a day on shorts (now just providing long position research for individual investors) in response to this movement, and like you say, a lot of hedges now need to work the retail/vigilante element into their models. It's almost like sci-fi where overnight a civilisation has the $hit slapped out of it by the aliens and they have to totally rethink how they organise and function.
If a hedge fund went major short and another hedge fund bought shares in a short squeeze, they rang each other. Agreed a get out position ala boys club unwritten rules.
Unfortunately some people outside of the club sussed out if you have enough funds you can squeeze a short position.
Having made millions from the first one they are moving to the next.
Thing is the hedge funds will learn and change.
I suspect they may have a few more wins before the tide turns.
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Re: The game stop phenomenon
Be careful, there is real outlay. Futures trades require cash margin, both original/"initial" and variation margin to guarantee that you will perform your side of the trade and whoever is on the other side of your trade knows that the exchange has always got the cash to honour their gains, if you are holding a losing position.
Yes, some futures brokers may give some of their larger clients credit positions, though this has always been quite limited even for the "biggest of the biggest." The reforms since 2008, now also require off-exchange, i.e. over-the-counter derivative trades to be collateralised.
As for the "Essex boys" - it's highly probable that though the made a vast amount of money on that one day last year, there would be many many days when they also lost money. Who knows, they might not be in profit, net, by the end of the year....
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Re: The GameStop phenomenon
Yeah, like I mentioned on page one this is a common thing in the finance world, and hedge fund battling hedge fund is kind of like the Joshua v Fury of the finance world, routinely making the front pages of its media publications, but the big difference in this is that reddit is on crack cocaine and has brass knuckles, and is kicking and biting, and isn't just in the fight to win, but to murder someone, and to teach the entire sport a lesson in morality and justice! And of course, they love the stock.Lowbankclaret wrote: ↑Sun Jan 31, 2021 12:59 amAt a gues and this is completely hypothetical.
If a hedge fund went major short and another hedge fund bought shares in a short squeeze, they rang each other. Agreed a get out position ala boys club unwritten rules.
Unfortunately some people outside of the club sussed out if you have enough funds you can squeeze a short position.
Having made millions from the first one they are moving to the next.
Thing is the hedge funds will learn and change.
I suspect they may have a few more wins before the tide turns.
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Re: The GameStop phenomenon
I will highlight the funds argument .
They have looked at the Companies position.
Take GameStop. Small company who sold games for PC and Consoles , it’s business had been affected by the pandemic as people moved to online downloads.
Share price slumped due to this , hence hedge funds went really short.
But if you believe the shops could recover you buy shares and gain from the shares going up as that happens but if you can buy enough to force the share price up , shorters have a problem.
They are complaining that private nvestors are not buying because the company can survive and increase profits.
They are just buying to squeeze shorters and that’s market manipulation.
Will not wash they have done it for years as part of the boys club.
A new game is afoot.
They have looked at the Companies position.
Take GameStop. Small company who sold games for PC and Consoles , it’s business had been affected by the pandemic as people moved to online downloads.
Share price slumped due to this , hence hedge funds went really short.
But if you believe the shops could recover you buy shares and gain from the shares going up as that happens but if you can buy enough to force the share price up , shorters have a problem.
They are complaining that private nvestors are not buying because the company can survive and increase profits.
They are just buying to squeeze shorters and that’s market manipulation.
Will not wash they have done it for years as part of the boys club.
A new game is afoot.
Re: The GameStop phenomenon
Exactly this!Lowbankclaret wrote: ↑Sun Jan 31, 2021 1:12 amI will highlight the funds argument .
They have looked at the Companies position.
Take GameStop. Small company who sold games for PC and Consoles , it’s business had been affected by the pandemic as people moved to online downloads.
Share price slumped due to this , hence hedge funds went really short.
But if you believe the shops could recover you buy shares and gain from the shares going up as that happens but if you can buy enough to force the share price up , shorters have a problem.
They are complaining that private nvestors are not buying because the company can survive and increase profits.
They are just buying to squeeze shorters and that’s market manipulation.
Will not wash they have done it for years as part of the boys club.
A new game is afoot.
Then you have all the illegal financial advice on the forums and/or Twitter with people literally telling others when to buy the stock and when to sell it. You need to be a regulated and licensed financial company or person to provide financial advice.
Re: The GameStop phenomenon
Ha!!! Financial advice!!! Never seen emojis in a fiduciary report, if I'm being honest. Nobody is telling anyone when to buy or sell, you loon. This is a bunch of self-confessed retards sharing memes about having ape brains and diamond hands and rocketing to the moon, and ejaculating into the rings of Saturn, probably...and they like the stock! and who can blame them!...LOOK AT ITS PRICE!!! If the entire financial cervix sceptre is being outplayed by smooth-brained autistic millennials on reddit who like the stock, and if that stock's popularity just so happens to be too much for the galaxy-brain geniuses on Wall Street who over-leveraged, then you really do need to question the big-brain intelligence of those geniuses up whose anuses you seem intent on blowing that sweet, sweet smoke.RVclaret wrote: ↑Sun Jan 31, 2021 1:24 amExactly this!
Then you have all the illegal financial advice on the forums and/or Twitter with people literally telling others when to buy the stock and when to sell it. You need to be a regulated and licensed financial company or person to provide financial advice.
If you think no hedge fund has ever squeezed another's short positions on the basis of its ability to extract profit from the squeeze, regardless of the supposed viability of the company stock being shorted, they you really ought to do your clients a favour, quit your job, and collect bins for a living. (No offence to the binmen, you're more valuable to the world than stock bonkers). I know I wouldn't want a dunce like you advising me. I'd want a cynical b@stard, a stone cold pragmatist advising me, thankyouverymuch, and not some crybaby who has difficulty comprehending the battlefield he's sent to.
Last edited by Spiral on Sun Jan 31, 2021 2:28 am, edited 2 times in total.
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Re: The GameStop phenomenon
True, but they are all in the boys club of making money on the back of private investors.RVclaret wrote: ↑Sun Jan 31, 2021 1:24 amExactly this!
Then you have all the illegal financial advice on the forums and/or Twitter with people literally telling others when to buy the stock and when to sell it. You need to be a regulated and licensed financial company or person to provide financial advice.
So private investors have put their heads together and worked out they are being had and fought back.
The boys club who pay themselves big bonuses on our money don’t like it.
They made the rules so they win, someone worked out how they could win against them and they do not like it.
Bit like us beating Liverpool, should not be allowed in your rules of the game.
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Re: The GameStop phenomenon
I will put this forward as a regulated example.
When my mum retired she got a lump some of £300k which she put in the hands of a well known local financial firm .
Two weeks I reviewed her investments with her.
20 years on its worth £320 k and for this wonderful management advise she has paid £80k .
Regulated sharks if you ask me.
When my mum retired she got a lump some of £300k which she put in the hands of a well known local financial firm .
Two weeks I reviewed her investments with her.
20 years on its worth £320 k and for this wonderful management advise she has paid £80k .
Regulated sharks if you ask me.
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Re: The GameStop phenomenon
If they had just put it in a very low cost S and P 500 tracker, it would now be worth just under 2 million.
But it’s about financial advisors making money, not the clients.
Hence the major back lash.
Change is here.
But it’s about financial advisors making money, not the clients.
Hence the major back lash.
Change is here.
Re: The GameStop phenomenon
https://www.bloomberg.com/opinion/artic ... nder-first
Good article for anyone who wants everything summarised along with the possible next steps outlined. It’s going to be a really interesting week ahead.
Spiral, you don’t seem to have abilities to debate without personal attacks which I have no interest in so let’s leave it at that.
Good article for anyone who wants everything summarised along with the possible next steps outlined. It’s going to be a really interesting week ahead.
Spiral, you don’t seem to have abilities to debate without personal attacks which I have no interest in so let’s leave it at that.
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Re: The GameStop phenomenon
This is not good and I would agree these kind of sharks need rooting out.Lowbankclaret wrote: ↑Sun Jan 31, 2021 2:34 amI will put this forward as a regulated example.
When my mum retired she got a lump some of £300k which she put in the hands of a well known local financial firm .
Two weeks I reviewed her investments with her.
20 years on its worth £320 k and for this wonderful management advise she has paid £80k .
Regulated sharks if you ask me.
Re: The game stop phenomenon
What I don't get about this explanation is why the original owner of the stock would loan his share to someone who will sell it short. In your scenario he has a share that is worth $10 and will soon have one worth $2?Spiral wrote: ↑Thu Jan 28, 2021 8:41 pmI don't mean for any of this to sound patronising, apologies if it comes across that way, but I'll keep it as simple as possible.(Though it's a bit of a long explanation). Gamestop is a video game store in the US. Struggling in an increasingly-digitised world where physical copies of games are (it is reasoned) being bought less and less often. Think, HMV struggling to sell CD's. Wall Street (i.e. the people working in finance who somehow earn a living shuffling numbers around on a screen) collectively decided Gamestop is practically dead, and they wanted to make money off this. Arbitrary figures and time-frames used here-on-in for the sake of keeping it simple.
So, people own Gamestop stocks. Have done for a long time. Some people on Wall Street propose to those stock owners, "I'll borrow your stock from you for, say, a fortnight, and you'll get a bit of interest on it. You'll get in back in a fortnight". That's not a promise, it's a legally binding trade. Stock owners goes "cool, deal, nice bit of interest for me". Wall Street broker now in possession of Gamestop stock takes newly borrowed stock and flogs it so some other mug for, say $10 (it's market price), in a trade structured in a way that means they are LEGALLY bound to buy it back in, say, a week, whatever the price. Wall Street begins to make a song and dance about how Gamespot stock are being sold off left, right and centre, the price drops, the bloke who borrowed-then-sold the stock now buys it back a week later as per the deal at its new low price of, say, $2. Poor ignorant sucker who bought it for $10 loses money. Wall Street short-seller flogged it for $10, $10 goes in his pocket, he buys it back for $2, pockets the $8 difference and buys champagne with it, and as per the deal, gives the stock back to the person he originally borrowed it from (plus a little interest for them) when the time on the loan is up. This is short-selling. It's basically a bet placed that a stock price will drop. If the stock drops, you win. If it rises above what you originally sold it for, you're completely f.ucked.
Re: The game stop phenomenon
The most simple reason is that the borrow rates are crazy. You can loan it out and earn a lot of money by doing nothing. But what it really comes down to is homework. Short sellers do a LOT of homework (analysis) on a stock because the profits are, by definition, limited — the most you can earn per stock shorted is the market value at the time of the sale, because it can't drop any lower than zero — and the potential losses are, theoretically, infinite (well, you go bankrupt before that happens), so it's a VERY high risk move and a lot of research goes into it. But shorting isn't as exact a science as some would argue; some hedge funds heavy in short positions do lag behind the indexes, and the lenders are acutely aware of this. If a lender has done his own homework on the stock he owns, he might believe the shorter is wrong in his analysis, and try to make money off his (it is hoped) failed gamble. It could also be that a lender believes his holdings are too small to move the price, so they ask themselves the question: "how does the potential for my fairly small holding having an ability to move the price weigh up against the fairly substantial fees I can rake in by loaning?"
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Re: The GameStop phenomenon
Bloomberg is interesting read. Thanks for posting rv.RVclaret wrote: ↑Sun Jan 31, 2021 4:04 amhttps://www.bloomberg.com/opinion/artic ... nder-first
Good article for anyone who wants everything summarised along with the possible next steps outlined. It’s going to be a really interesting week ahead.
PS: I intended to "like" once. I clicked twice and it's given you two "likes." Strange, on other mbs a second click would reverse the first.
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Re: The game stop phenomenon
Hi Hipper, securities lending is a second income stream for those institutions - pension funds, insurance companies and others - that are long securities. It is limited risk to the lender, as the borrower provides collateral, usually cash, to guarantee the return of the securities. There are always different views on which direction security prices will move. We can assume that the lender has a different view from the shorter and is content to remain long, which is what they can do, while picking up some revenue from making their securities available to those who want to go short.
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Re: The GameStop phenomenon
In case anyone is interested in learning a little more about repos....
In an earlier post I mentioned the ACT had published a guide in 2004 (or thereabouts). Looking at their website, they've updated these details in 2014. It tells another side to the securities lending, holders of securities can obtain low cost borrowing by repo'ing the securities they hold.
Practical steps to investing in Repos - ACT briefing note (Updated May 2014)
In May 2014 the ACT updated and republished the Practical Steps to Investing in Repos briefing note. Updates include choosing collateral, haircuts, income paid on collateral and re-use or re-hypothecation of collateral.
https://www.treasurers.org/repos
Repos are typically used by banks and building societies to borrow money on a short term basis in the absence of unsecured money market funding which has almost dried up post global financial crisis. Non-financial companies, on the other hand, continue to conserve their cash given current uncertainties and face the challenge of diversifying their investment portfolio from a list of financial counterparties with dwindling credit ratings. Even though repos provide additional protection to the investor through ownership of collateral, they are not widely used by non-financial companies.
The ACT believes one reason may be the lack of practical knowledge that exists in the market so the operational processes remain mysterious to the treasurer and CFO. This repo briefing note aims to fill some of this gap with a high level comparison of repos against five short term liquid investment products, a comparison of the key characteristics of tri-party and bilateral repos, steps that need to be taken before investing in repos, and an overview of transaction flows.
In an earlier post I mentioned the ACT had published a guide in 2004 (or thereabouts). Looking at their website, they've updated these details in 2014. It tells another side to the securities lending, holders of securities can obtain low cost borrowing by repo'ing the securities they hold.
Practical steps to investing in Repos - ACT briefing note (Updated May 2014)
In May 2014 the ACT updated and republished the Practical Steps to Investing in Repos briefing note. Updates include choosing collateral, haircuts, income paid on collateral and re-use or re-hypothecation of collateral.
https://www.treasurers.org/repos
Repos are typically used by banks and building societies to borrow money on a short term basis in the absence of unsecured money market funding which has almost dried up post global financial crisis. Non-financial companies, on the other hand, continue to conserve their cash given current uncertainties and face the challenge of diversifying their investment portfolio from a list of financial counterparties with dwindling credit ratings. Even though repos provide additional protection to the investor through ownership of collateral, they are not widely used by non-financial companies.
The ACT believes one reason may be the lack of practical knowledge that exists in the market so the operational processes remain mysterious to the treasurer and CFO. This repo briefing note aims to fill some of this gap with a high level comparison of repos against five short term liquid investment products, a comparison of the key characteristics of tri-party and bilateral repos, steps that need to be taken before investing in repos, and an overview of transaction flows.
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Re: The GameStop phenomenon
Thanks for posting the Bloomberg article, just as I thought and said this could blow up to a full blown change to how markets work. Which I think could be a good thing. Well at least I hope it will.
A bad thing would be to stop private investors being able to buy and sell as they want to and having put trades to a dealer.
When I had a level 2 account and traded many times a week, live prices and timing where everything. You could make an extra £200 on a single trade by seeing live increases and being able sell immediately.
A bad thing would be to stop private investors being able to buy and sell as they want to and having put trades to a dealer.
When I had a level 2 account and traded many times a week, live prices and timing where everything. You could make an extra £200 on a single trade by seeing live increases and being able sell immediately.
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Re: The GameStop phenomenon
That’s absolutely shocking and really thought provoking.Lowbankclaret wrote: ↑Sun Jan 31, 2021 2:34 amI will put this forward as a regulated example.
When my mum retired she got a lump some of £300k which she put in the hands of a well known local financial firm .
Two weeks I reviewed her investments with her.
20 years on its worth £320 k and for this wonderful management advise she has paid £80k .
Regulated sharks if you ask me.
But to get back on topic, is AMC worth a punt this week?
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Re: The GameStop phenomenon
Investment charges are big debating issue.
The Vanguard platform has given the investor a very cheap option and etoro is pushing a no charges service which I haven’t looked into.
The old school insurance houses are still charging way to much for the crap service they provide.
Now my pension is with Prudential and the charges are obscene in my opinion. But my Financial Advisor only uses them and I had to have an advisor to move my pension.
In short the charges will be £12,000 a year. So over 20 years it will be £240,000 in charges on my money. I will review in a couple of years if I will go it alone as I bring charges down to a couple of grand on Vanguard.
The one thing you cannot void is charges , but you want your money to grow.
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Re: The GameStop phenomenon
Short interest is still over 100%, it feels like despite some big hedgefunds cutting their losses there's no shortage of shorts rushing in behind them. It's hard to ignore the fact that the stock is massively over priced, as the ever ludicrous market cap rises you're going to see people (despite what they say on reddit) taking their money and running. They might say this isn't about the money, but a lot of them are lying. That combined with the bears getting a better price to come in behind any closed shorts means I would tip the battle in their favour. If it turns, it'll happen fast and crash. I think a short squeeze was possible before the very dodgy suspension of GS stock by Robinhood etc, but not now. The momentum was lost.
I don't have an ounce of sympathy for HFs that have been at this for years, but I am concerned that ordinary folk with not much cash are being encouraged to buy stock at ever riskier prices. It's very easy to promote the narrative that the stock will rocket stood with your shares bought at 30 dollars or whatever. If you were to believe the mostly well intentioned mob on twitter, this is low risk AND you get to screw over the rich while making some dough. At 300+ dollars a share, that is far from certain
I don't have an ounce of sympathy for HFs that have been at this for years, but I am concerned that ordinary folk with not much cash are being encouraged to buy stock at ever riskier prices. It's very easy to promote the narrative that the stock will rocket stood with your shares bought at 30 dollars or whatever. If you were to believe the mostly well intentioned mob on twitter, this is low risk AND you get to screw over the rich while making some dough. At 300+ dollars a share, that is far from certain
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Re: The GameStop phenomenon
I agree and will watch from the sidelineswillsclarets wrote: ↑Sun Jan 31, 2021 11:18 pmShort interest is still over 100%, it feels like despite some big hedgefunds cutting their losses there's no shortage of shorts rushing in behind them. It's hard to ignore the fact that the stock is massively over priced, as the ever ludicrous market cap rises you're going to see people (despite what they say on reddit) taking their money and running. They might say this isn't about the money, but a lot of them are lying. That combined with the bears getting a better price to come in behind any closed shorts means I would tip the battle in their favour. If it turns, it'll happen fast and crash. I think a short squeeze was possible before the very dodgy suspension of GS stock by Robinhood etc, but not now. The momentum was lost.
I don't have an ounce of sympathy for HFs that have been at this for years, but I am concerned that ordinary folk with not much cash are being encouraged to buy stock at ever riskier prices. It's very easy to promote the narrative that the stock will rocket stood with your shares bought at 30 dollars or whatever. If you were to believe the mostly well intentioned mob on twitter, this is low risk AND you get to screw over the rich while making some dough. At 300+ dollars a share, that is far from certain
A short squeeze is not new.
Many shorters have lost a lot money shorting Tesla.
Re: The GameStop phenomenon
Okay so now this is going to make me sound like a tinfoil hat lunatic, but everything I say here is verifiable.Gordaleman wrote: ↑Sat Jan 30, 2021 10:09 pmThe latest target for the 'Reddit' and 'Robin Hood' brigade is Silver. In the last couple of days the Silver price has been forced up, but it's a lot larger market and they have realised it's not as easy. Now they are targeting individual Silver mining companies, Majestic Silver for one.
I hold a couple of small mining companies on the UK AIM market, and even they have risen in the last couple of days.
Next week could get very interesting.
It appears as though silver is being spammed by bots on social media. The Street is trying to 'memeify' silver in the hope of goading WSB into buying silver. Now then, let's backtrack a bit.
Remember that Robinhood is the app most WSB users are using. Robinhood charges its users no commission. But what is Robinhood's business model? How do they make money? Well, they are in partnership with Citadel Securities, which is a company owned by Kenneth Griffin, who is also the owner of Citadel Securities' parent company, Citadel LLC, a Wall Street hedge fund. Citadel Securities is a market maker, and carries out transactions for traders. Robinhood is the app WSB users use to manage their portfolios, and Robinhood primarily uses Citadel to carry out those transactions. Robinhood makes its profit from what they call 'rebates' from Citadel and other market makers for sending what is called the 'order flow' to those market makers. Retail traders (folks sat at home, WBS users) make trades on the Robinhood app, Robinhood uses Citadel (and other market makers) to carry out the trade, Citadel pays Robinhood. But why? Why would Citadel pay Robinhood to carry out its trades?
Answer: High frequency trading — computer algorithms that allow market makers such as Citadel to get in front of retail traders and use the information from those real-world trades to rapidly (we're talking microseconds) adjust algorithms to better position hedge funds such as Citadel. High frequency trading is algorithm-run trading. No humans involved, except for those writing the algorithms in the first place. It's somehow legal (take it up with the government, I suppose) for Citadel to essentially buy a report (the term is 'payment for order flow') showing how Robinhood users are trading, and to feed this data in real-time into its algorithm in order to allow Citadel to make trades literally microseconds before the Robinhood transactions are carried out. They're getting in front of the trade, thus giving them a more advantageous market position, and because high frequency trading is not very well regulated it's all completely above board.
Late last year Robinhood paid a fine of $65m (without accepting or denying guilt) relating to practices dating back a few years of withholding receipts of payments for routing its order flow to market makers, and crucially, for not providing its users what is called 'best execution' — providing its users either the best price available or the quickest trade available. These shady practices by Robinhood are estimated to have cost its retail users an estimated total of $34.1m, even taking into account the fact users pay no commission, and this is all prior to the explosion of Robinhood's popularity. So who is Robinhood's real customer? Its users, or the market makers such as Citadel? It's easy to work that one out. It's the one who pays them money.
But how does this all relate to silver? I'll get there eventually, but first, a comment on Melvin Capital. The hedge fund Melvin Capital holds the biggest of the big short positions on Gamestop. They're haemorrhaging money because the price isn't dropping, because WSB has diamond hands, and those ape-brain idiots on reddit like the stock. Reminder, the trades on Gamestop are overwhelmingly made via the Robinhood app and executed by Citadel. So then, last week Melvin Capital almost dies because of their bungled short position and starts looking for a lifeline. Who steps in to save Melvin Capital? F.ucking Citadel LLC, who bails out Melvin for over $2bn (if I recall the figure correctly). Citadel swoops in and gets a piece of Melvin on the cheap. So now Citadel is invested in Melvin, who are dying, but who are also stuck with a short position on GME and bleeding all over the place. So what does Citadel do? It tries to memeify silver on reddit using sock-puppet social media accounts and amplifying silver using bots...you know, classic astroturfing techniques...knowing that reddit users are using Robinhood, the app Citadel is in business with, and whose partnership allows Citadel access to virtually real-time information pertaining to Robinhood users' trades, allowing Citadel's high frequency trades to get in front of Robinhood users' trades by literally microseconds, giving them an advantageous market position. So aside from telling lies in the media that Melvin has closed its short position on GME (it almost certainly hasn't, and they do this because the fine for this kind of market manipulation is lower than what they stand to lose from the short position), Citadel begins to try and memeify silver, hoping that reddit moves on from GME and into silver. Why would Citadel want this? Why would they want a rise in the price of silver?
BECAUSE CITADEL IS THE FIFTH BIGGEST HOLDER OF SILVER ON THE PLANET! THIS IS VERIFIABLE!
Reddit has caught wind of this...
AND THEY ARE HOLDING!!! REDDIT IS TAKING GME TO THE MOON!!! HOLD GME!!! DIAMOND HANDS!!!
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Re: The GameStop phenomenon
Oliver Shah in The Sunday Times.
Bedroom traders are misguided in their rage against the hedge funds
https://www.thetimes.co.uk/article/1273 ... 17dffc4907
A different view and some facts I hadn't seen in other reports.
Bedroom traders are misguided in their rage against the hedge funds
https://www.thetimes.co.uk/article/1273 ... 17dffc4907
A different view and some facts I hadn't seen in other reports.
Re: The GameStop phenomenon
I'm going to save anyone a click who doesn't want to give Rupert Murdoch the traffic: "Waaaaaaaaaaaaaaaahhhh!"
At the end of the article even the culture wars were invoked. Apparently, the wokies are crushing the brave and proud free speech advocates by squeezing their short position...er, I mean... their "opinions" on Gamestop stock. All of a sudden, a short squeeze is somehow a infringement upon one's free speech. By God, it's cancel culture run amok!
Redditors on WallStreetBets call themselves "retards" every other post, but then folks read articles like the one above and nod in agreement, so I'm not so sure the word hasn't lost all meaning if I'm being honest.
At the end of the article even the culture wars were invoked. Apparently, the wokies are crushing the brave and proud free speech advocates by squeezing their short position...er, I mean... their "opinions" on Gamestop stock. All of a sudden, a short squeeze is somehow a infringement upon one's free speech. By God, it's cancel culture run amok!
Redditors on WallStreetBets call themselves "retards" every other post, but then folks read articles like the one above and nod in agreement, so I'm not so sure the word hasn't lost all meaning if I'm being honest.
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Re: The GameStop phenomenon
Great article! Exactly what I was alluding to further up.Paul Waine wrote: ↑Mon Feb 01, 2021 12:46 amOliver Shah in The Sunday Times.
Bedroom traders are misguided in their rage against the hedge funds
https://www.thetimes.co.uk/article/1273 ... 17dffc4907
A different view and some facts I hadn't seen in other reports.
Re: The GameStop phenomenon
Surely the charge of £80k seems over the top. How could they justify that?Lowbankclaret wrote: ↑Sun Jan 31, 2021 2:34 amI will put this forward as a regulated example.
When my mum retired she got a lump some of £300k which she put in the hands of a well known local financial firm .
Two weeks I reviewed her investments with her.
20 years on its worth £320 k and for this wonderful management advise she has paid £80k .
Regulated sharks if you ask me.
Remember, as you people are always telling us, things can go down as well as up.
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Re: The GameStop phenomenon
Over the time the investment has been in its fairly typical rate of charges.
Financial investment managers charge from 0.5% up to 2% on the fund each year.
On top of that you are going to have to pay platform charges.
Vanguard from 0.3 to 0.7/8 % per year.
Hargreaves Lansdown 0.7-1.8% per year.
prudential 1.8-2.1% per year.
So on £100,000 using a FA and the Vanguard platform you could be paying as little as £800 per year.
However on the Pru platform you can be paying £2000 per year.
Therefore over 20 years the difference in charges can be huge. In the example above the difference would lowest £16,000 and the highest £40,000.
My point above was I think it’s ok to high charges as long as that FInancial Advisor makes your pot grow over the long term.
Many of my friends have left work this last year and between us we must have had meeting with every FA in the north west.
The variation in charges and lock in charges is crazy.
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Re: The GameStop phenomenon
Back on the OP subject matter.
Hedge funds have jumped in and heavily shorted Gamestop, let the battle commence I think.
The next target is apparently Silver, up 20% today.
The Hedge funds are trying to drive a drop in the gamestop share price as it price now has no bearing to the actual value of the company. They will be expecting a share price panic and they will get their shirts back and some PI will lose theirs.
Hedge funds have jumped in and heavily shorted Gamestop, let the battle commence I think.
The next target is apparently Silver, up 20% today.
The Hedge funds are trying to drive a drop in the gamestop share price as it price now has no bearing to the actual value of the company. They will be expecting a share price panic and they will get their shirts back and some PI will lose theirs.
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Re: The GameStop phenomenon
I haven't followed these trades as closely as you obviously have. All I know is that after I pointed this out on Friday I bought quite a bit of bullion at close to spot price of about £20 a Troy ounce. (I trade Silver coins almost every day.) As soon as the Asian markets opened last night, Silver rose by about 8% and the futures market by even more, and the rise continued once London opened.Spiral wrote: ↑Mon Feb 01, 2021 12:11 amOkay so now this is going to make me sound like a tinfoil hat lunatic, but everything I say here is verifiable.
It appears as though silver is being spammed by bots on social media. The Street is trying to 'memeify' silver in the hope of goading WSB into buying silver. Now then, let's backtrack a bit.
Remember that Robinhood is the app most WSB users are using. Robinhood charges its users no commission. But what is Robinhood's business model? How do they make money? Well, they are in partnership with Citadel Securities, which is a company owned by Kenneth Griffin, who is also the owner of Citadel Securities' parent company, Citadel LLC, a Wall Street hedge fund. Citadel Securities is a market maker, and carries out transactions for traders. Robinhood is the app WSB users use to manage their portfolios, and Robinhood primarily uses Citadel to carry out those transactions. Robinhood makes its profit from what they call 'rebates' from Citadel and other market makers for sending what is called the 'order flow' to those market makers. Retail traders (folks sat at home, WBS users) make trades on the Robinhood app, Robinhood uses Citadel (and other market makers) to carry out the trade, Citadel pays Robinhood. But why? Why would Citadel pay Robinhood to carry out its trades?
Answer: High frequency trading — computer algorithms that allow market makers such as Citadel to get in front of retail traders and use the information from those real-world trades to rapidly (we're talking microseconds) adjust algorithms to better position hedge funds such as Citadel. High frequency trading is algorithm-run trading. No humans involved, except for those writing the algorithms in the first place. It's somehow legal (take it up with the government, I suppose) for Citadel to essentially buy a report (the term is 'payment for order flow') showing how Robinhood users are trading, and to feed this data in real-time into its algorithm in order to allow Citadel to make trades literally microseconds before the Robinhood transactions are carried out. They're getting in front of the trade, thus giving them a more advantageous market position, and because high frequency trading is not very well regulated it's all completely above board.
Late last year Robinhood paid a fine of $65m (without accepting or denying guilt) relating to practices dating back a few years of withholding receipts of payments for routing its order flow to market makers, and crucially, for not providing its users what is called 'best execution' — providing its users either the best price available or the quickest trade available. These shady practices by Robinhood are estimated to have cost its retail users an estimated total of $34.1m, even taking into account the fact users pay no commission, and this is all prior to the explosion of Robinhood's popularity. So who is Robinhood's real customer? Its users, or the market makers such as Citadel? It's easy to work that one out. It's the one who pays them money.
But how does this all relate to silver? I'll get there eventually, but first, a comment on Melvin Capital. The hedge fund Melvin Capital holds the biggest of the big short positions on Gamestop. They're haemorrhaging money because the price isn't dropping, because WSB has diamond hands, and those ape-brain idiots on reddit like the stock. Reminder, the trades on Gamestop are overwhelmingly made via the Robinhood app and executed by Citadel. So then, last week Melvin Capital almost dies because of their bungled short position and starts looking for a lifeline. Who steps in to save Melvin Capital? F.ucking Citadel LLC, who bails out Melvin for over $2bn (if I recall the figure correctly). Citadel swoops in and gets a piece of Melvin on the cheap. So now Citadel is invested in Melvin, who are dying, but who are also stuck with a short position on GME and bleeding all over the place. So what does Citadel do? It tries to memeify silver on reddit using sock-puppet social media accounts and amplifying silver using bots...you know, classic astroturfing techniques...knowing that reddit users are using Robinhood, the app Citadel is in business with, and whose partnership allows Citadel access to virtually real-time information pertaining to Robinhood users' trades, allowing Citadel's high frequency trades to get in front of Robinhood users' trades by literally microseconds, giving them an advantageous market position. So aside from telling lies in the media that Melvin has closed its short position on GME (it almost certainly hasn't, and they do this because the fine for this kind of market manipulation is lower than what they stand to lose from the short position), Citadel begins to try and memeify silver, hoping that reddit moves on from GME and into silver. Why would Citadel want this? Why would they want a rise in the price of silver?
BECAUSE CITADEL IS THE FIFTH BIGGEST HOLDER OF SILVER ON THE PLANET! THIS IS VERIFIABLE!
Reddit has caught wind of this...
AND THEY ARE HOLDING!!! REDDIT IS TAKING GME TO THE MOON!!! HOLD GME!!! DIAMOND HANDS!!!
As the Robin Hood and Reddit brigade are largely America based, it could get very interesting this afternoon when their markets open,
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Re: The GameStop phenomenon
They just showed a chart on Bloomberg, sales in silver were the biggest ever on Friday $944 million dollars worth sold.Gordaleman wrote: ↑Mon Feb 01, 2021 12:44 pmI haven't followed these trades as closely as you obviously have. All I know is that after I pointed this out on Friday I bought quite a bit of bullion at close to spot price of about £20 a Troy ounce. (I trade Silver coins almost every day.) As soon as the Asian markets opened last night, Silver rose by about 8% and the futures market by even more, and the rise continued once London opened.
As the Robin Hood and Reddit brigade are largely America based, it could get very interesting this afternoon when their markets open,
An analyst was saying Silver is a bad choice as there is no big short position, so the explanation above seems very creditable.
Re: The GameStop phenomenon
The front page of reddit is just a wall of 'HOLD GME - SILVER IS A SCAM' type posts. NYSE opens in a few minutes, so it'll be interesting. If silver rockets, then that's just smashing for anyone holding silver, and good for them! But the important point in all this is that it appears there has been an underhanded campaign designed to encourage redditors specifically to divest from GME and go into silver. Going in on silver isn't the reason this is noteworthy, it's noteworthy because the very people with huge silver holdings stand to benefit if GME sinks.
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Re: The GameStop phenomenon
It doesn't seem that bad a choice right now. It's on the cusp of $30 at the moment. (Up $3 since Friday.) It might take a while to break through $30, but once it does, anything goes.Lowbankclaret wrote: ↑Mon Feb 01, 2021 2:17 pmThey just showed a chart on Bloomberg, sales in silver were the biggest ever on Friday $944 million dollars worth sold.
An analyst was saying Silver is a bad choice as there is no big short position, so the explanation above seems very creditable.
Personally, I'm not that bothered. I trade Silver whatever the price is, so apart from my stock being worth more, it doesn't really affect me.