After listening to some knowledgeable people it seems there are more nuanced issues in the WSB v. RH/Melvin perspective. The process of clearing trade ties up money, and the short squeeze was so huge it was, or had the potential to affect the ability to clear other trades completely unrelated to any of these shorted stocks. I'm sure Ned or someone else can explain it. But now I'm wondering if this means . . . well what does it mean for the rest of the market?
Peter Schiff has, of course, been perpetually predicting a collapse (for as long as I can remember).
After listening to some knowledgeable people it seems there are more nuanced issues in the WSB v. RH/Melvin perspective. The process of clearing trade ties up money, and the short squeeze was so huge it was, or had the potential to affect the ability to clear other trades completely unrelated to any of these shorted stocks. I'm sure Ned or someone else can explain it. But now I'm wondering if this means . . . well what does it mean for the rest of the market?
Peter Schiff has, of course, been perpetually predicting a collapse (for as long as I can remember).
Anything to worry about?
Considering they were tapping credit lines and raising money to deal with the influx of trading and to cover potential option losses is worrisome.
mid they start to default or go bankrupt with tons of debt then we could see a snowball in effect
Robinhood raised $1 billion overnight from investors to shore up its balance sheet as the brokerage app was set to ease restrictions in the trading of certain volatile stocks.
The money raised was on top of $500 million the stock trading app accessed through credit lines to ensure it had the capital required to keep allowing its clients to trade heavily shorted stocks like GameStop and AMC Entertainment.
The core problem is that you shouldn't be able short more shares than what's in existence.
I don't think it's going to crash the system. The SEC and the company BOD are going to come up with an agreement to issue out more shares. And everyone holding (including front line employees of said companies) will become diluted.
After listening to some knowledgeable people it seems there are more nuanced issues in the WSB v. RH/Melvin perspective. The process of clearing trade ties up money, and the short squeeze was so huge it was, or had the potential to affect the ability to clear other trades completely unrelated to any of these shorted stocks. I'm sure Ned or someone else can explain it. But now I'm wondering if this means . . . well what does it mean for the rest of the market?
Peter Schiff has, of course, been perpetually predicting a collapse (for as long as I can remember).
Anything to worry about?
I assume they were talking about Robin Hood and whether or not they could pay for their trades (rather than the market in general).
The core problem is that you shouldn't be able short more shares than what's in existence.
I don't think it's going to crash the system. The SEC and the company BOD are going to come up with an agreement to issue out more shares. And everyone holding (including front line employees of said companies) will become diluted.
Good job, muthafuckers.
Why would they issue more shares? Do you have a source for this?
The core problem is that you shouldn't be able short more shares than what's in existence.
I don't think it's going to crash the system. The SEC and the company BOD are going to come up with an agreement to issue out more shares. And everyone holding (including front line employees of said companies) will become diluted.
The core problem is that you shouldn't be able short more shares than what's in existence.
I don't think it's going to crash the system. The SEC and the company BOD are going to come up with an agreement to issue out more shares. And everyone holding (including front line employees of said companies) will become diluted.
Good job, muthafuckers.
Why would they issue more shares? Do you have a source for this?
What?!? Article...WTF?
The plays from the playbook don't get published in no article you stupid ass muthafucker.
Let me tell ya how this shit goes down....First the corporate executives get to get out and sell thier shares at the inflated prices..Then the large institutions get those shares from the corporate execs and siphon them out to you sheeple and thr hedge funds to cover thier shorts up until they run out.
Then once the board members have all sold out of thier old shares, a bunch of new shares are issued and you sheeple keep buying them up at high prices. Once you sheeple buy them all up, the analysts at the investment houses downgrade those shares and they come crashing down. Then the executives buy them back up and retire rich, until the next cycle repeats again.
Dont play this game. Just go and save up and invest into your company's matching 401k, or into the S&P and be done with it.
The core problem is that you shouldn't be able short more shares than what's in existence.
I don't think it's going to crash the system. The SEC and the company BOD are going to come up with an agreement to issue out more shares. And everyone holding (including front line employees of said companies) will become diluted.
The core problem is that you shouldn't be able short more shares than what's in existence.
I don't think it's going to crash the system. The SEC and the company BOD are going to come up with an agreement to issue out more shares. And everyone holding (including front line employees of said companies) will become diluted.
Good job, muthafuckers.
Why would they issue more shares? Do you have a source for this?
Probably because the hedge funds shorted 140% more shares than even existed.
The clearing thing is silly imo. Although the volume was a lot in those stocks it in no way was anywhere near what you would need to effect clearing streetwide. Some B/Ds may put up restrictions on margin and increase their deposits where they clear and such, but it isn't really a huge systemic issue.
There are other ripple effects. Such as that GME is held in certain ETFs and MFs and is in the Russel, so the huge gains distort the trading. For example the market was down yet IJR was flat, and that is basically because of GME being up. So it created some disconnects and some arb scenarios.
Nothing really alarming.
I think the longer term effects are that congress is going to go after the short sellers. 140% short interest? That is just silly and creates the window of opportunity for events like this. I won't shed a tear ove Cintron, or Citadel, or Melvin, or Point72 getting hurt.
The core problem is that you shouldn't be able short more shares than what's in existence.
I don't think it's going to crash the system. The SEC and the company BOD are going to come up with an agreement to issue out more shares. And everyone holding (including front line employees of said companies) will become diluted.
Good job, muthafuckers.
They won't issue more shares to fulfill the borrow needs of short sellers.
What they need to do is go back and check all of the affimred borrows, then when they figure out who is selling naked they need to do more than just the paltry fines they have been handing out.
HFs don't care, they short naked and take the fines, they look at it as a cost of doing business, the fines pale i comparison to the returns.