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Continental Op

Continental Op 3934

Posted
Posted
1 hour ago, Beau Vine said:

1.  You mean a put option?

2.  Because you pay a premium.

3.  Because those expire.  

No.... Call options.  It cuts into your potential gain but you are not staring down the barrel of potentially limitless loss.  They expire but you can take the L and roll into ones with a later expiration date. 

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Sbbruin

Sbbruin 21697

Posted
Posted
21 minutes ago, Beau Vine said:

Come on, man, the SEC doesn't regulate Wall Street; they work for Wall Street.

Reminds me of the Moody's and S&P ratings of CMBs pre-financial crisis.  Supposedly 100% independent/impartial rating services.  Or not.  

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Bateshorn

Bateshorn 9882

Posted
Posted (edited)
38 minutes ago, Mrs Whiggins said:

So, is everything going to go to hell or not? Do I need to go to the liquor store or the ledge or both?

Are you putting enough away in your 401k to get your max company match and have it in an Target Age Date Fund?  
 

Then this is the entertaining shenanigans of a road side carnival. 
 

But you should drink anyway.
 

 

Edited by Bateshorn
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horn4life

horn4life 3753

Posted
Posted

So I will try to be clear- if you think I am wrong please correct me.

All sell/puts are tied to a certain specific date of expiration in the future. Below are the basics of how the two sides of Puts and Calls work.  

Sell call (paid a premium to sell a stock for a certain price by contract)

Buy call (pay a premium for a contract to buy a stock at a certain price)

----------------------------------------------------------------------------

Sell Put ( paid a premium to agree to buy a stock at a certain price)

Buy Put (pay a premium to sell a stock at a certain price)

Retail investors MUST secure the stock, or secure the position of the stock with CASH.  Hedge funds do not.  They had shorted over 100% of the stock, so they were "borrowing" the stock to go negative.  The shares there were borrowing were more than the shares even available.  As long as the stock drifted sideways or did not move much in any direction the borrowed position is manageable. If it goes up, you are FORCED to buy the shares, of which you have borrowed more than exist (in the GME scenario) so you bleed cash until buy enough shares to cover your "borrowed shares."  

The irony is that your FORCED buying of the shares to cover, drives up the same share prices that you need to buy MORE OF to try and close out the rest of your positions.  So in a way you become your own enemy.  The Reddit crew did two things.  They bought calls that were out of the money, then they started buying shares, to push the price up to make their out of the money calls, in the money. And that started the cascade.  The Reddit shares start to rise, while the hedge fund scrambles to buy the now reddit owned shares, to cover their contractual obligations.

It's possible the positions were naked calls. Contracts to sell a call, where the stock was held as in a covered call. But I think they were in the put position where they were borrowing shares to be sold at a certain price. 

Hope that was sort of maybe clear.... or clear as mud! 😉 

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horn4life

horn4life 3753

Posted
Posted (edited)

Sure wish I would have decided to click on that order of GME at $60 something....   Tomorrow is gonna be interesting, as there were people again buying shorts this afternoon with a Jan 29 expiration date so some degree of normalcy. With the big move tonight the first thing I am gonna look at is if there is any action on the put side of the ledger, or did tonights after hours rise make most folks flinch on the short side?

close today @ $193.60 down $153.91 on the day

after hours until 8 pm EST - up to $311.29 for an after hours gain of $118.39

Yesterday there were was not ANY activity at all that I could see on the put side.  Today there were people buying and I assume selling shorts.  Most of those positions are gonna get squeezed again tomorrow.  So it's take the loss or cover with cash to purchase shares if you are on the sell side of those puts.  IF a lot of those short positions were the big dogs buying back in, you may see dips in the broader market as they sell assets to create the cash needed to buy GME to cover their shorts. 

Eventually this bitch is gonna fall and fall hard.  But the greed is the moth to the flame.  Some folks are getting crushed on the way up, and a different set will get crushed on the way down.  That is the only certainty.

Edited by horn4life
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ChiTownDoc

ChiTownDoc 21091

Posted
Posted
30 minutes ago, horn4life said:

Sure wish I would have decided to click on that order of GME at $60 something....   Tomorrow is gonna be interesting, as there were people again buying shorts this afternoon with a Jan 29 expiration date so some degree of normalcy. With the big move tonight the first thing I am gonna look at is if there is any action on the put side of the ledger, or did tonights after hours rise make most folks flinch on the short side?

close today @ $193.60 down $153.91 on the day

after hours until 8 pm EST - up to $311.29 for an after hours gain of $118.39

Yesterday there were was not ANY activity at all that I could see on the put side.  Today there were people buying and I assume selling shorts.  Most of those positions are gonna get squeezed again tomorrow.  So it's take the loss or cover with cash to purchase shares if you are on the sell side of those puts.  IF a lot of those short positions were the big dogs buying back in, you may see dips in the broader market as they sell assets to create the cash needed to buy GME to cover their shorts. 

Eventually this bitch is gonna fall and fall hard.  But the greed is the moth to the flame.  Some folks are getting crushed on the way up, and a different set will get crushed on the way down.  That is the only certainty.

💎 💎💎💎💎 🙌🏼 

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henrygandorf

henrygandorf 29174

Posted
Posted
1 hour ago, horn4life said:

Sure wish I would have decided to click on that order of GME at $60 something....   Tomorrow is gonna be interesting, as there were people again buying shorts this afternoon with a Jan 29 expiration date so some degree of normalcy. With the big move tonight the first thing I am gonna look at is if there is any action on the put side of the ledger, or did tonights after hours rise make most folks flinch on the short side?

close today @ $193.60 down $153.91 on the day

after hours until 8 pm EST - up to $311.29 for an after hours gain of $118.39

Yesterday there were was not ANY activity at all that I could see on the put side.  Today there were people buying and I assume selling shorts.  Most of those positions are gonna get squeezed again tomorrow.  So it's take the loss or cover with cash to purchase shares if you are on the sell side of those puts.  IF a lot of those short positions were the big dogs buying back in, you may see dips in the broader market as they sell assets to create the cash needed to buy GME to cover their shorts. 

Eventually this bitch is gonna fall and fall hard.  But the greed is the moth to the flame.  Some folks are getting crushed on the way up, and a different set will get crushed on the way down.  That is the only certainty.

at around noon, rh had deplatformed gme.

at 7pm, it remained deplatformed, including a notice "robinhood does not support this stock".

(several stocks were "position closing only", but gme was completely unsupported)

at 7:15pm, that notice disappeared.  it's back in play.

robinhood will be "limiting" certain transactions tomorrow, but is almost assuredly going to overreact in one way or another.  tomorrow is sure to be bonkers.

probably should've kept my 200+ shares i bought at $7 back in oct from a random surly reco.  i bet it touches 5 bills tomorrow.

 

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Guest Lobo

Guest Lobo

Posted
Posted
8 hours ago, Neonmoon said:

This did not go well for Robinhood 

 

7 years in and you're just now getting around to looking at your deposit requirements on people who, in many cases, are not accredited investors, Mr. Tenev? 

And you admitted this on public TV.  I'm guessing you got a phone call 60 seconds later from Robinhood General Counsel.  You know your regulators watch this show, Vlad...right?  And by the smarmy resting face, you ain't gonna do well in federal prison.  

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SydneyCarton

SydneyCarton 47809

Posted
Posted
55 minutes ago, Lobo said:

7 years in and you're just now getting around to looking at your deposit requirements on people who, in many cases, are not accredited investors, Mr. Tenev? 

And you admitted this on public TV.  I'm guessing you got a phone call 60 seconds later from Robinhood General Counsel.  You know your regulators watch this show, Vlad...right?  And by the smarmy resting face, you ain't gonna do well in federal prison.  

I watched this whole thing last night live. I had a similar reaction. Dude's fucking smirk and whole demeanor just screamed shitbag. 

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PW119

PW119 166

Posted
Posted

https://nypost.com/2021/01/28/wh-shouldnt-be-a-surprise-yellen-paid-to-speak-to-wall-street/

 

White House Press Secretary Jen Psaki said Thursday it “shouldn’t be a surprise” that Treasury Secretary Janet Yellen was paid to speak to Wall Street, including a hedge fund involved in the GameStop populist investing struggle.

Yellen, a former Federal Reserve chairman, was paid $810,000 by hedge fund Citadel for three events in 2019 and 2020, according to disclosure forms.

The firm reportedly infused $2 billion into Melvin Capital Management, a hedge fund hammered by losses in the GameStop struggle waged by smaller investors.

“Separate from the GameStop issue, the secretary of Treasury is one of the world renowned experts on markets, on the economy. It shouldn’t be a surprise to anyone she was paid to give her perspective and advice before she came into office — before she came in to be the treasury secretary, I should say,” Psaki said at a White House briefing.

Small-dollar investors banded together on a reddit forum to buy GameStop stock and reap financial windfalls from hedge funds that were “shorting” the stock, or using an investing strategy that rewards them if the value decreases.

The hedge funds incurred significant losses by predicting declining value for GameStop. Instead, the stock value of the flailing video game retailer soared, forcing the hedge funds to pay the new investors the difference.

The Securities and Exchange Commission said it’s reviewing the stock-buying campaign and stock-trading platform Robinhood this week shut down purchasing of GameStop stock — enraging leftist and populist right-wing politicians who say big business and the government are unfairly focused on small investors rather than wealthy stock-shorting profiteers.

Yellen, whose agency is a powerful financial regulator, made $7 million from banks and Wall Street firms in 2019 and 2020 according to her financial disclosure forms.

 

I am not surprised in the least.

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MonkeyDoughnut

MonkeyDoughnut 10134

Posted
Posted

This is akin a bunch of gamblers hitting up Vegas and finding a glitch in how casino comps are calculated and now they have invited a whole bunch of friends to join in and people they don't even know are flocking to Vegas with them packing the casinos.

We know who benefits most from this. They are very excited more dumb money has entered as they know where it eventually ends up. Plus companies like Robinhood (that they control) are the holy grail of easy money for them. There is a reason they have made trading "free".

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Bateshorn

Bateshorn 9882

Posted
Posted
6 minutes ago, MonkeyDoughnut said:

This is akin a bunch of gamblers hitting up Vegas and finding a glitch in how casino comps are calculated and now they have invited a whole bunch of friends to join in and people they don't even know are flocking to Vegas with them packing the casinos.

We know who benefits most from this. They are very excited more dumb money has entered as they know where it eventually ends up. Plus companies like Robinhood (that they control) are the holy grail of easy money for them. There is a reason they have made trading "free".

Robinho is was great for Wall Street when they could use the analytics off of the amateur trading to game the system and profit off both sides of the trades. Now that it’s blown up in their faces, they’ve predictably lost their taste for letting the paroles sit at the big boy table.

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Brisketexan

Brisketexan 104462

Posted
Posted
7 minutes ago, Bateshorn said:

Robinho is was great for Wall Street when they could use the analytics off of the amateur trading to game the system and profit off both sides of the trades. Now that it’s blown up in their faces, they’ve predictably lost their taste for letting the paroles sit at the big boy table.

This.  It was all a great idea while the fat cats could game the phenomenon.  Now that the fat cats are on the losing side of the ledger, well, it doesn't make sense!  It's bad economics and sends bad signals!  We should probably make it illegal!

It's as if the fat cats invented the forward pass, spent a few seasons running up the score, and then the other teams figured out that if you drop people into coverage, you can pick off passes and run them back for your own TD, and starting beating the shit out of team Fat Cat....."we need to make a rule that an interception means the ball is down at that spot!  No returns for TDs!"  Shit, this batch of Fat Cats, they'd try to ban interceptions altogether. 

There is only two rules for Wall Street:

1) Fat Cats should be insured of nothing but upside, any downside should be minimal.

2) everyone else should be at risk of losing it all.

 

Fuck 'em.  Fuck oligarchy.

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MonkeyDoughnut

MonkeyDoughnut 10134

Posted
Posted
16 minutes ago, Bateshorn said:

Robinho is was great for Wall Street when they could use the analytics off of the amateur trading to game the system and profit off both sides of the trades. Now that it’s blown up in their faces, they’ve predictably lost their taste for letting the paroles sit at the big boy table.

Robinho sells its order flow to the quant firms who are basically scalping positions in real time with the gained knowledge. The problem Robinho has right now is they know they have a lot of investors trading on margin that are about to blow up and they won't be able to recoop all the losses the dumb money are about to take. (The losses of course being taken by the Wall Street "house" once again).  The only regulation that goes on in Wall Street is the bigger firms keeping any smaller firms from ever becoming a "big" firm.  

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DonkeyCigars

DonkeyCigars 144

Posted
Posted (edited)
21 minutes ago, Brisketexan said:

This.  It was all a great idea while the fat cats could game the phenomenon.  Now that the fat cats are on the losing side of the ledger, well, it doesn't make sense!  It's bad economics and sends bad signals!  We should probably make it illegal!

It's as if the fat cats invented the forward pass, spent a few seasons running up the score, and then the other teams figured out that if you drop people into coverage, you can pick off passes and run them back for your own TD, and starting beating the shit out of team Fat Cat....."we need to make a rule that an interception means the ball is down at that spot!  No returns for TDs!"  Shit, this batch of Fat Cats, they'd try to ban interceptions altogether. 

There is only two rules for Wall Street:

1) Fat Cats should be insured of nothing but upside, any downside should be minimal.

2) everyone else should be at risk of losing it all.

 

Fuck 'em.  Fuck oligarchy.

I feel like the last week this narrative has really taken hold and become a kitchen table narrative/topic.

The fact is, Wall St. is not a monolith. Everyone there is out to make as much money as they can, the firms are in constant conflict with each other and a good number of Wall St. aren’t the huge Goldman, Morgan Stanley, bulge brackets or even mid market banks, but boutiques and small shops in an existential crisis every time a big bet goes sideways. 

Just spend some time in the FiDi post covid (if you never did pre-covid), you think politics makes strange bedfellows? You can’t imagine the weird relationships and how cut throat and nasty Finance is beyond the veneer. It makes Capital Hill and D.C. look like a church potluck.

Anyways; are there a couple of firms specifically affected by this GameStop grease fire? Absolutely! Are they pulling strings (via RH, connected buddies, other stakeholders who have an interest to help?) almost 100% assured.

Is all Wall St in on some conspiracy to take down the common man with his retail bets and newfound addiction and dopamine highs, as if they are the Illuminati or something? Of course not.

Does Reddit have the actual money, volume and power to hurt Wall St. proper and the majority of firms NOT caught in a squeeze? Absolutely not.

Are other firms fueling this quietly to cripple rival firms Melvin and Citadel, etc? Of course.

If anything, I think 80% Wall St is thinking this is hilarious right along with us and doesn’t want any more regulation, especially against retail investors than we do.

Edited by DonkeyCigars
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DonkeyCigars

DonkeyCigars 144

Posted
Posted
11 minutes ago, MonkeyDoughnut said:

Robinho sells its order flow to the quant firms who are basically scalping positions in real time with the gained knowledge. The problem Robinho has right now is they know they have a lot of investors trading on margin that are about to blow up and they won't be able to recoop all the losses the dumb money are about to take. (The losses of course being taken by the Wall Street "house" once again).  The only regulation that goes on in Wall Street is the bigger firms keeping any smaller firms from ever becoming a "big" firm.  

Smack on.

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Aqua Buddha

Aqua Buddha 14488

Posted
Posted
3 minutes ago, DonkeyCigars said:

I feel like the last week this narrative has really taken hold and become a kitchen table narrative/topic.

The fact is, Wall St. is not a monolith. Everyone there is out to make as much money as they can, the firms are in constant conflict with each other and a good number of Wall St. aren’t the huge Goldman, Morgan Stanley, bulge brackets or even mid market banks, but boutiques and small shops in an existential crisis every time a big bet goes sideways. 

Just spend some time in the FiDi post covid (if you never did pre-covid), you think politics makes strange bedfellows? You can’t imagine the weird relationships and how cut throat and nasty Finance is beyond the veneer. It makes Capital Hill and D.C. look like a church potluck.

Anyways; are there a couple of firms specifically affected by this GameStop grease fire? Absolutely! Are they pulling strings (via RH, connected buddies, other stakeholders who have an interest to help?) almost 100% assured.

Is all Wall St in on some conspiracy to take down the common man with his retail bets and newfound addiction and dopamine highs, as if they are the Illuminati or something? Of course not.

Does Reddit have the actual money, volume and power to hurt Wall St. proper and the majority of firms NOT caught in a squeeze? Absolutely not.

Are other firms fueling this quietly to cripple rival firms Melvin and Citadel, etc? Of course.

[b]If anything, I think 80% Wall St is thinking this is hilarious right along with us and doesn’t want any more regulation, especially against retail investors than we do.[/b]

Solid post.  

I have CNBC on all day in the background and this week is one of the best in recent memory.  The older Wall Street types are horrified by this but the younger non Wall Street players (Cuban, Chamath Palihapitiya, etc.) think this is hilarious.  

Basically, a few firms got overextended and some internet trolls figured it out and buried them.  If this was one hedge fund guy short squeezing another hedge fund guy, they'd be slurping his balls.

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Dr. Teeth

Dr. Teeth 5813

Posted
Posted
3 minutes ago, Aqua Buddha said:

Solid post.  

I have CNBC on all day in the background and this week is one of the best in recent memory.  The older Wall Street types are horrified by this but the younger non Wall Street players (Cuban, Chamath Palihapitiya, etc.) think this is hilarious.  

Basically, a few firms got overextended and some internet trolls figured it out and buried them.  If this was one hedge fund guy short squeezing another hedge fund guy, they'd be slurping his balls.

Except as he pointed out, it really still is hedge funds taking out other hedge funds. A couple of larger funds are taking advantage of this trade and helping fuel the rally to harm Melvin. The average investor that didn't get it early on will likely get hurt. Also, people keep forgetting that small investors can also short the market. They are getting caught up in this as well. Hedge funds are still the ones making the most from this rally. Don't let the WSB posts fool you, average investors are losing money on this trade.

The old guys on CNBC are barely even talking this specific trade. They are rallying against stimulus checks and taxing the rich.

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Aqua Buddha

Aqua Buddha 14488

Posted
Posted
11 minutes ago, Dr. Teeth said:

Except as he pointed out, it really still is hedge funds taking out other hedge funds. A couple of larger funds are taking advantage of this trade and helping fuel the rally to harm Melvin. The average investor that didn't get it early on will likely get hurt. Also, people keep forgetting that small investors can also short the market. They are getting caught up in this as well. Hedge funds are still the ones making the most from this rally. Don't let the WSB posts fool you, average investors are losing money on this trade.

The old guys on CNBC are barely even talking this specific trade. They are rallying against stimulus checks and taxing the rich.

Yeah, one guy yesterday was irate that "unsophisticated" people were using their stimulus checks to do this.  (Doubtful.)

They were sophisticated enough not to lose $3B.

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Nivek

Nivek 16807

Posted
Posted

Melvin needs to pull itself up by its boot straps and get ready for a trickle down economics. /Colbert

Last night AOC made a comment, if you steal/defraud the poor or middle class you get fired with a golden parachute. If you steal/defraud the rich you go to prison. The speakers were a little young for Enron, but still mostly true.

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Beau Vine

Beau Vine 53964

Posted
Posted
2 hours ago, Lobo said:

7 years in and you're just now getting around to looking at your deposit requirements on people who, in many cases, are not accredited investors, Mr. Tenev? 

 

I may be wrong, but I didn't think there were any deposit requirements for a 100% equity position.  Deposit requirements are for when there's a liability issue, such as margins or short positions.  


Can anyone confirm/refute?

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Guest Lobo

Guest Lobo

Posted
Posted

Yeah, it's not needed for straight long equity.  I was marrying his comments there with another article I read about covered call positions with lagging deposit requirements.  Concerning given everything else I've been reading about them (admittedly, not keeping up with nearly as close as most of y'all) and that so many of their investors are armchair reddit traders who are not accredited investors.  

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DonkeyCigars

DonkeyCigars 144

Posted
Posted
1 minute ago, Celery Man said:

It is absolutely black and white, and "not fair" would be for the guy engaged in attacking the legislature to just plop back into his seat and everyone to treat him like he's the respectable senator from Texas. He's not, he's a seditionist who should be shunned until he resigns and croaks, but *at the very least* he should not expect to be treated like a peer or working partner in government until he he has repented and changed. He has done neither. Accountability is fair. Lot of fucking snowflakes who bitch and moan about that stuff with a complete lack of awareness.

I think you aren't understanding how I used the term fair, here. I was characterizing your interpretation of the event, not the actions of those involved. 

Also lol you are unhinged. 

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MonkeyDoughnut

MonkeyDoughnut 10134

Posted
Posted
22 minutes ago, Beau Vine said:

I may be wrong, but I didn't think there were any deposit requirements for a 100% equity position.  Deposit requirements are for when there's a liability issue, such as margins or short positions.  


Can anyone confirm/refute?

There are deposit requirement on cash accounts "if" the account is buying and selling on the same day.  Usually you get a warning from your broker about this now that if it happens X more times within next X days your account will be frozen and/or converted to a "day-trader" account which required 25K minimum usually.  Its part of the  Fed's Reg T prohibition against "free-riding" which goes back to how trades settle nightly and not the instant they happen. All trading is done during some period but then the firms basically get together at night to bless things and settles who has what.  So if you buy Gamestop today but then close it out today, you have effectively sold Gamestop without technically owning it yet since the original buy hasn't officially settled and could technically not settle (price glitch, error, etc causing a void of the buy).

So for a buy and hold type cash accounts there is not a deposit requirement.  For a buy today, sell tomorrow cash account there is also not a deposit requirement.

For a buy today / sell today cash account.... that is not allowed without a higher requirement.

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