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Markets still falling like whoa

Llano Estacado

By Llano Estacado
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Eastwood
Eastwood

That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if o

Rusty Shackelford
Rusty Shackelford
Eastwood
Eastwood

I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the l

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52-80

52-80 19162

Posted
Posted
21 minutes ago, Blotto said:

I was thinking about this myself. The vast majority of the retail investors that have piled into buying calls want no part of those options getting exercised Friday. If GME is hanging around $300, that would require 30K per contract. What percent of the reddit contigent can afford to exercise their options? So a mad rush begins to close out their options, but will there be buyers on a Friday afternoon? Could see some strange shit on Friday. I don't think I understand all the moving pieces on this deal enough to get involved but the entire thing is interesting as fuck.

they'll just flip the options for cash (market maker close the delta hedge), and use the cash proceeds to buy more shares.

 

tightening the screws.

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Wally Fairway

Wally Fairway 5550

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27 minutes ago, Blotto said:

I was thinking about this myself. The vast majority of the retail investors that have piled into buying calls want no part of those options getting exercised Friday. If GME is hanging around $300, that would require 30K per contract. What percent of the reddit contigent can afford to exercise their options? So a mad rush begins to close out their options, but will there be buyers on a Friday afternoon? Could see some strange shit on Friday. I don't think I understand all the moving pieces on this deal enough to get involved but the entire thing is interesting as fuck.

You make a good point, but you only owe based on the option strike price not the market value, so if your in $100 calls then your owe $10K per contract, that is worth $30k. Your broker will "lend" you the money at a margin rate, but still you can sell 1/2 of the shares to cover that and have cash left over for tendies. 

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XYZ

XYZ 2154

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Posted

Let me get this straight, so GME is a stock that for whatever reason some hedge funds decided to short the fuck out of, even selling shares that don't exist. How the fuck is that even allowed? Actually, don’t answer that question. The SEC is and has been for a long time a paper tiger. Anyway, so a group of reddit dorks called wallstreetbets notice the massive short and they are like let’s fuck with these hedge funds and go long GME. So I assume they recruited an army of traders to drive the price up and crush the shorts. And I assume none of the price action has anything to do whatsoever with the balance sheet of Game Stop.

Did I get that more or less right?

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DonkeyCigars

DonkeyCigars 143

Posted
Posted
6 minutes ago, XYZ said:

Let me get this straight, so GME is a stock that for whatever reason some hedge funds decided to short the fuck out of, even selling shares that don't exist. How the fuck is that even allowed? Actually, don’t answer that question. The SEC is and has been for a long time a paper tiger. Anyway, so a group of reddit dorks called wallstreetbets notice the massive short and they are like let’s fuck with these hedge funds and go long GME. So I assume they recruited an army of traders to drive the price up and crush the shorts. And I assume none of the price action has anything to do whatsoever with the balance sheet of Game Stop.

Did I get that more or less right?

This is about the best short synopsis I’ve seen:

https://www.instagram.com/tv/CKhcBMFBHUM/?igshid=1urjjkugscquh

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Incredulity

Incredulity 11675

Posted
Posted
6 minutes ago, XYZ said:

Let me get this straight, so GME is a stock that for whatever reason some hedge funds decided to short the fuck out of, even selling shares that don't exist. How the fuck is that even allowed? Actually, don’t answer that question. The SEC is and has been for a long time a paper tiger. Anyway, so a group of reddit dorks called wallstreetbets notice the massive short and they are like let’s fuck with these hedge funds and go long GME. So I assume they recruited an army of traders to drive the price up and crush the shorts. And I assume none of the price action has anything to do whatsoever with the balance sheet of Game Stop.

Did I get that more or less right?

IMPO it's a longer story.

It starts early last year with the traditional investing thesis that Holidays 2020 was gaming platform "supercycle" and that the stock was undervalued because they were going to print money for a few quarters.

 

I know a couple of guys who bought and sold based on that thesis with some acknowledgement of the big short interest too.  One made a quick 50K and felt really smart.  He is kicking himself now because he bought about 12,000 shares at $4 and sold over $9.  Woulda, coulda, shoulda...

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Blotto

Blotto 23525

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Posted
8 minutes ago, Wally Fairway said:

You make a good point, but you only owe based on the option strike price not the market value, so if your in $100 calls then your owe $10K per contract, that is worth $30k. Your broker will "lend" you the money at a margin rate, but still you can sell 1/2 of the shares to cover that and have cash left over for tendies. 

True, but that 10k exercise price may not be worth 30k if there's a mad rush on Friday to close positions. If you look at last week there was a big dip Friday around noon, and then it came back at close. But the price of the underlying is higher so the stakes increase. It's basically a game of chicken, but one side is full of relatively novice investors who probably don't know much more than "stonks go up". It's gotta give all the brokers heartache because both sides of the trade could be fucked for different reasons, and they will have to sift through the debris on Monday. 

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Wally Fairway

Wally Fairway 5550

Posted
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1 minute ago, Blotto said:

True, but that 10k exercise price may not be worth 30k if there's a mad rush on Friday to close positions. If you look at last week there was a big dip Friday around noon, and then it came back at close. But the price of the underlying is higher so the stakes increase. It's basically a game of chicken, but one side is full of relatively novice investors who probably don't know much more than "stonks go up". It's gotta give all the brokers heartache because both sides of the trade could be fucked for different reasons, and they will have to sift through the debris on Monday. 

Yup - that is why I hate holding options to expiration, there is a lot of risk involved. And if you don't sell them, and the stock moves you can owe thousands of dollars at expiration on an option that is worth $0.05 per contract, if it moves at close to. It happened to me when I was playing with DIS calls last year, luckily I had the cash to cover and got out of the shares at a small profit, though I should have held them because amusement parks and cruise lines were good businesses in 2020 (one of many things I just don't understand about 2020)

 

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Burt Macklin

Burt Macklin 19026

Posted
Posted (edited)
6 minutes ago, Eastwood said:

https://cognitivestruggle.files.wordpress.com/2019/02/resting.gif?w=364

I sold close to today's top. And now, I rest...

Really nice job. You’ve been on it this whole time. Do you have any idea how this will play out regarding when people cash out? I understand that it could theoretically keep going up til shorts get their margins called/run out of AUM and I see everyone on WSB saying hold the line, but they don’t really control enough of the overall stock to do that. Is it just going to be the first MM to take profit starts the drop for everyone and then it’s a mad dash to cash out? 

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Trey3216

Trey3216 15346

Posted
Posted (edited)
6 minutes ago, WBT said:

If only those hedge fund bros had known about the risk of naked shorts.  I guess Ivy MBAs aren't what they used to be.

That's what happens when you let mathematicians and physicists alone run portfolios rather than people that have some inkling of economic/financial thought.  

 

They tend to overlook variables involving human emotion.  

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Eastwood

Eastwood 4394

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Really nice job. You’ve been on it this whole time. Do you have any idea how this will play out regarding when people cash out? I understand that it could theoretically keep going up til shorts get their margins called/run out of AUM and I see everyone on WSB saying hold the line, but they don’t really control enough of the overall stock to do that. Is it just going to be the first MM to take profit starts the drop for everyone and then it’s a mad dash to cash out? 
That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if on the list at all. Think of retail investors as unsecured creditors. If there's anything left, they leave you to fight over it with everyone else. This thing could shoot up another $200 today, it could plummet to the ground, it could get a 10 day SEC halt, I just don't know.

As much as I love the idea of this retiring me, it's been a hard year, guys. I've been out of work since COVID locked us down, I have two kids and a mortgage... This lifted a huge weight off my shoulders and I get to treat myself and the family to a couple of nice things while leaving enough in my TDA account to hunt for the next whale.

I wanted to ride this thing to the end, but at the same time, I had to do right by my family. By pushing away now, I get to do that. And now I get to watch from the sidelines and enjoy the show.

Stay safe out there and Hook'em.
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Trey3216

Trey3216 15346

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1 minute ago, Cheeseweasel said:

Hard to predict the outright crazy that is WSB

It was one of the things that was consistently talked about during the financial crisis.  That models used to make mortgages, repackage them into CMO's, then CDO's, then CDO^2's, etc., were severely lacking in the ability to sit back and look at them and say "Human beings don't always look like a mathematical model, because they tend to act irrationally on the way up and even more irrationally on the way down".   

 

This is a microcosm of the exact same thing.  

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Trey3216

Trey3216 15346

Posted
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3 minutes ago, Eastwood said:

That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if on the list at all. Think of retail investors as unsecured creditors. If there's anything left, they leave you to fight over it with everyone else. This thing could shoot up another $200 today, it could plummet to the ground, it could get a 10 day SEC halt, I just don't know.

As much as I love the idea of this retiring me, it's been a hard year, guys. I've been out of work since COVID locked us down, I have two kids and a mortgage... This lifted a huge weight off my shoulders and I get to treat myself and the family to a couple of nice things while leaving enough in my TDA account to hunt for the next whale.

I wanted to ride this thing to the, but at the same time, I had to do right by my family. By pushing away now, I get to do that. And now I get to watch from the sidelines and enjoy the show.

Stay safe out there and Hook'em.

Well done, sir.  Well done indeed  

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Incredulity

Incredulity 11675

Posted
Posted
7 minutes ago, Eastwood said:

That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if on the list at all. Think of retail investors as unsecured creditors. If there's anything left, they leave you to fight over it with everyone else. This thing could shoot up another $200 today, it could plummet to the ground, it could get a 10 day SEC halt, I just don't know.

As much as I love the idea of this retiring me, it's been a hard year, guys. I've been out of work since COVID locked us down, I have two kids and a mortgage... This lifted a huge weight off my shoulders and I get to treat myself and the family to a couple of nice things while leaving enough in my TDA account to hunt for the next whale.

I wanted to ride this thing to the end, but at the same time, I had to do right by my family. By pushing away now, I get to do that. And now I get to watch from the sidelines and enjoy the show.

Stay safe out there and Hook'em.

Really glad for you.

No matter what happens from here you made a very solid and dare I say, the right, decision.

 

Congrats.

There will be blood.  That brings the government and WSB's doesn't have a seat at that table.

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B00M

B00M 6416

Posted
Posted
12 minutes ago, Eastwood said:

That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if on the list at all. Think of retail investors as unsecured creditors. If there's anything left, they leave you to fight over it with everyone else. This thing could shoot up another $200 today, it could plummet to the ground, it could get a 10 day SEC halt, I just don't know.

As much as I love the idea of this retiring me, it's been a hard year, guys. I've been out of work since COVID locked us down, I have two kids and a mortgage... This lifted a huge weight off my shoulders and I get to treat myself and the family to a couple of nice things while leaving enough in my TDA account to hunt for the next whale.

I wanted to ride this thing to the end, but at the same time, I had to do right by my family. By pushing away now, I get to do that. And now I get to watch from the sidelines and enjoy the show.

Stay safe out there and Hook'em.

Oh man, this is the fucking feel good story Surly needs. Very happy for you. Congrats!!

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Cheeseweasel

Cheeseweasel 26438

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41 minutes ago, Incredulity said:

There will be blood.  That brings the government and WSB's doesn't have a seat at that table.

Yup. I hope those kids understand this and pull out before the plane hits the ground.

 

Who am I kidding. They are playing with house money and will YOLO millions away for fake internet point.

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Eastwood

Eastwood 4394

Posted
Posted
[mention=247]Eastwood[/mention] tell me you kept at least 1 token share 
I'm buying back in after all the dust settles. I believe in the company with Cohen.

For anyone who blames Redditors, check out FIZZ, DDS, and IRM. Not on anyone's radar. Massive price action and volume over the last 10 days. I found a pattern. Any stock Melvin shorted that had BlackRock on the other side is pumping. This was a takedown, not a retail pump and dump.
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Trey3216

Trey3216 15346

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Just now, Eastwood said:

I'm buying back in after all the dust settles. I believe in the company with Cohen.

For anyone who blames Redditors, check out FIZZ, DDS, and IRM. Not on anyone's radar. Massive price action and volume over the last 10 days. I found a pattern. Any stock Melvin shorted that had BlackRock on the other side is pumping. This was a takedown, not a retail pump and dump.

Yep.  Trying to back a multi-trillion dollar MM into a corner is...bad business.   

 

"Never quarrel with a man who buys ink by the barrel, and paper by the ton"  

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sidis

sidis 9828

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Posted
31 minutes ago, Eastwood said:

I'm buying back in after all the dust settles. I believe in the company with Cohen.

For anyone who blames Redditors, check out FIZZ, DDS, and IRM. Not on anyone's radar. Massive price action and volume over the last 10 days. I found a pattern. Any stock Melvin shorted that had BlackRock on the other side is pumping. This was a takedown, not a retail pump and dump.

I just went and looked at that and you are right.  This is a pure takedown being veiled by the sideshow of an organic mob frenzy.

well done.

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Burt Macklin

Burt Macklin 19026

Posted
Posted
43 minutes ago, Eastwood said:

I'm buying back in after all the dust settles. I believe in the company with Cohen.

For anyone who blames Redditors, check out FIZZ, DDS, and IRM. Not on anyone's radar. Massive price action and volume over the last 10 days. I found a pattern. Any stock Melvin shorted that had BlackRock on the other side is pumping. This was a takedown, not a retail pump and dump.

Yeah, this is why I didn’t get in on GME as much as I apparently should have back when it was around $20 because even with all the money WSB throws around, they wouldn’t have the funds to pull this off by themselves. Turns out, they weren’t the only ones who caught on to the over-shorting, they’re just the only ones who posted about it out publicly. I had seen a post about this on WSB earlier, and it definitely looks like Blackrock is targeting Melvin over-shorting a ton of different stocks. 
 

But I’m sure when the dust settles, WSB will get blamed and retail investor will suffer the consequences. 

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