Saw a news item about outstanding short position was 140% of total shares.
I wonder what % of that was naked?
REMINDER: THE ARENA PLATFORM, INC. has no obligation to monitor the Forums. However, THE ARENA PLATFORM, INC. reserves the right to review any materials submitted to or posted on the Forums, and remove, delete, redact or otherwise modify such materials, in its sole discretion and for any reason whatsoever, at any time and from time to time, without notice or further obligation to you. THE ARENA PLATFORM, INC. has no obligation to display or post any materials provided by you. THE ARENA PLATFORM, INC. reserves the right to disclose, at any time and from time to time, any information or materials that we deem necessary or appropriate to satisfy any applicable law, regulation, contract obligation, legal or dispute process or government request. Click on the following hyperlinks to further read the applicable Privacy Policy and Terms of Use.
How’s the stock market?
- Thread starter lagunaboy
- Start date
I wonder what % of that was naked?
Holy sh!t this fuckin shill....
Corporate lifelines? Like what? Bain Capital won't be able to raid what little equity is left and somehow that's bad for someone ringing a register in a strip mall?
Have you ever seen a bully or an asshole and NOT instantly wanted to orally vacuum their nuts dry???
ok, so shorting a stock is essentially borrowing shares (presumably from someone who has shares), with the obligation to replace those shares at a future point. money is made if the short seller can replace the shares for less than what he borrowed them for (stock subsequently went down), money is lost if the short seller has to pay more then he what he borrowed them for (stock subsequently went up)First, short positions aren't purchase shares with cash to cover their positions. They're increasing their positions. That's a big difference.
The only time a short gets burned is when they run out of appetite for risk and the financial ability to cover. This by nature doesn't describe shorts investors.
Investors that are taking short positions aren't worried about covering. These are people or funds with ridiculous cash reserves. They are going at the fundamentals of a company and making decisions based on the facts of the financial condition of a company. A bunch of reddit users can't change these facts. If the shorts are in, they're in for the long haul and if the stock rises their opportunity only increases. Reddit group users aren't going to keep GME or any other company afloat indefinitely. Do you think a multi-billion dollar hedge fund doesn't have the wherewithal to wait/ride this out?Shorting this dogshit stock at a 300% temporary inflation is a short investors wet dream.
GME is and has been a dead man walking. The shorts are going to collect a premium as they short their way up to the tip top of the 300% turd.
I love that we can social media ourselves into some gains after solid runs and that the little guy found a way to crack the market...but this isn't new....runs are as old as the market itself....the only change is the way its been communicated and who has access.
The victims here are GME share holding employees and actual real investors....and the workers who are going to be finished off sooner than expected when GME flames out because reddit users short circuited the corporate lifelines.
so ELI5, how can over 100% of the shares get shorted?
tia
New "best knife" consumer advertorial pitch:
We see what the best knife is, testing it on these people.
I call it: "Stab in the Dick"
Didn't you read Von Meister's post? The shorts are the good guys here. That extra 40% of effectively fucking counterfeit GameStop stock couldn't possibly be naked shorted.
Fraudulently.so ELI5, how can over 100% of the shares get shorted?
tia
I have an idea.
We find out who shorted above 100% and/or naked. AKA counterfeited stock.
We cuff them, toss them on a fucking street in Minneapolis, and we have someone kneel on their neck for eight minutes, with a bunch of iPhone-toting hipsters filming it for InstaYouTubeTokChat clout.
It happens, even though it's illegal. There are loopholes and discrepancies in trading systems. Here is one scenario.ok, so shorting a stock is essentially borrowing shares (presumably from someone who has shares), with the obligation to replace those shares at a future point. money is made if the short seller can replace the shares for less than what he borrowed them for (stock subsequently went down), money is lost if the short seller has to pay more then he what he borrowed them for (stock subsequently went up)
so ELI5, how can over 100% of the shares get shorted?
tia
1. Investor opens short position (they borrow shares from broker to sell)
2. Broker has 3 days to find shares available to lend to investor for his short.
3. If broker can't find available shares, it's called a 'fail to deliver'.
4. And now the investor is essentially in a 'naked short' because he holds a short position with shares he did not actually have to sell.
5. If broker does not deliver shares within 13 days of initial transaction, broker has to buy them back.
isn't the fraud/crime/whatever committed by the bookie here, not the bettor? if i short a stock, it's presumably only because Charles Schwab (in my case) knew that amount of shares i'm shorting were obtainable elsewhere, no? i assume that's why i get a little "hard to borrow" notice in my order window that tells me they know what's available. seems like the broker is more of the problem here than the trader, because they took the short bet. just my meager two cents.
The term "naked" is way overblown and misunderstood. It's not a devious way of shorting.
Generally I'm against shorting. I don't see it as a value function or adding any liquidity to the market or private sector...but if you make ti illegal there will be another very similar practice as a result. In order to be able to bet with the market you need to be able to bet against it or it becomes a Ponzi scheme.
I'm no lawyer and this gets complicated. But I believe it's on the broker, as the SEC has stated they want to protect the investor in this situation.
"Easy to Borrow" list
"Hard to Borrow" list
If the stock is on the 'easy' list, the broker does not have to go find shares on the market to lend to the investor because the broker has a 'blanket' of insurance for that security.
If the stock is on the 'hard' list, then the broker has 3 days to deliver since the transaction.
If broker fails to deliver, the SEC could put a mandatory pre-borrow (on future short transactions) in place for that broker, and possibly block them from future short sells, and/or fines.
To borrow shares to short, you need collateral (unless you are doing it naked).
For a wuss like me, this is cash.
If a stock trading at $50 is what I want to short, I want to have $60 for every share because I am a conservative money person. If the price doesn't go down like I expect and goes up to $58, I would cover and have some left over to pay for interest.
If you have a lot of $$, you can keep shorting (but still need collateral if you are going to hold onto that short position for a while) to force the perception that the share price will go down. You can leverage this perception with options. This is not a bad move if you have the $.
If the longs have more $, they can push back with the same tools.
Side with more $$$ usually wins.
In the moment, shorts are getting burned. They are covering at higher prices than what they shorted at. You read the Melvin says they covered with a loss, right? And then got a bailout, right? That is textbook of getting burned.
They are covering.
Reddit users are changing perception (not fact that GME may not be a long term viable company) and presently some are making $$ on the long position.A bunch of reddit users can't change these facts. If the shorts are in, they're in for the long haul and if the stock rises their opportunity only increases. Reddit group users aren't going to keep GME or any other company afloat indefinitely. Do you think a multi-billion dollar hedge fund doesn't have the wherewithal to wait/ride this out?
That the institutional investors are covering their shorts now means they aren't waiting things out at their initial short position. Fighting the tape means the shorts would have to start putting up more collateral, paying more interest, and that takes $ away from other things they could be doing, potentially costing them more $.
I would hate the be the one buying a long position at these prices. If I had lots of $$, I might consider shorting at today's prices.
And it will cost the more to short at these higher levels.
More collateral, more interest.
It seems the underlying issue for the GME shorts was shorting more shares than what actually exists.
Access to the markets has never been greater, the ability to use tools to dive into the data never easier (cheaper), and realtime communication within loose coalitions seems plenty new to those who make less than $100,000 a year.
Not sure I follow this.
Actual GME investors who were staring at sub teen prices have probably been selling all the way to the top. Those who had been holding this on the way down from their buy in at, oh $20 in 2015 (or whenever), probably would have sold when it came roaring back and passed $50.
If the GME share holding employees are restricted from selling, then that sucks for them, but those holders would probably high up the chain of command at GME. Usually the people working the lines who have shares aren't restricted from selling, but they might be. If they are, then the way to play it would be to use their shares to short against the box at the current price of $330 because wow, that seems unsustainable to me. But yeah, that takes more $$ and ovaries than I have.
Where you're getting lost in the difference between the short and the cover. If I short GEM @ 20 the most I stand to gain is 20. If I time out and cover those 20's with shorts @ 80, I've increased my opportunity by 60. GME hasn't changed and essentially has a future value of near zero as it's business becomes obsolete. By saying "sorts are covering"....well, no sh!t. It's part of the agreement. No way does that mean they are stroking checks.
No one is shorting and profit taking on the settlement date. The risk/value isn't there.
No way the big firms want change. They have developed their strategies on the existing system and it's taken them decades of constant refinement to fine tune their methodologies for making huge money.
Change is bad for anyone who is currently in full control of a system.
Agreed
"Time out" of your short position at 20 because shareprice is now 80 means, margin call, right?
Or does it mean "I covered at some price above $20, and now shorting at $80?"
Borrowing shares at $80 to cover the borrowed shares at $20 is akin to digging yourself out of a hole by digging deeper. Sure, if you have the $, you may be able to find gold but how many fortunes have been lost looking for gold?
Agree to a point. Their storefront business model doesn't seem great for long term, but maybe they could pivot to something else...still wouldn't put my $ on that bet though.
Am unsure what 'stroking checks' means. Am sure the institutional shorts have lost a bunch of cash or they wouldn't be getting a bailout. Am further sure that bailout usually come with strings.
You had said earlier
and by me saying 'short are covering' the subtext is 'they are worried enough to not lose any more by covering now'. I should have also said that this was specific to the institutions who shorted in the teens and lower and to any who shorted more as it kept going up.
You don't think anyone in the money on their options won't exercise them take profit this Friday? Isn't that the point?
I might be misunderstanding your statement.
1 -This way of thinking about capital is what fuels bitcoin pricing.
2 - Can't see GME ever getting to $9000, but I am often wrong.
It does not mean a margin call. it means you have to return the shares you borrowed. Shorts do this by increasing their short position...which is easy because the facts about GME didn't change so this is just a better opportunity because it has a lot further to fall now...which is the margin the shorts want.
Like I said earlier. The fundamentals that got GME shorted did not disappear. GME isn't going to compete with Amazon, or Best Buy, or Walmart, or Target. They are done...the market didn't kill them soon enough so the shorts piled on.
In order to sell a stock you need to have a buyer. Large-scale unloading of options or selling of stock is going to drive the price down and the pool of buyers will become scarce. No one is going to look at GME as an opportunity on the way down.
So... a bunch of traders gamblers are working the system by manipulating derivatives, nobody seems to get in trouble, paper losses pile up to the point where some investment houses are on shaky ground, while a select few manipulators cash in big.
Feeling a little deja-vu here.
Feeling a little deja-vu here.
