GameStop: Anger as trading in GameStop shares is restricted (opens in new tab)

These clowns shorted 170% of float. If that's not pure gambling teetering on market manipulation, I don't know what is.

Risk analysis and sophistication are in no way orthogonal to gambling. They are hallmarks of gambling at the highest levels. Horse handicapping among horse racing gamblers is extremely similar in every form to the stock market. Even "simple" games like poker have extraordinarily complex risk analysis schemes at the highest levels and you can listen to all sorts of stuff in the World Series of Poker broadcast commentary alone.

Yet somehow they've been outwitted by a bunch of Redittors. Maybe you're giving them to much credit.

Or to put it another way, there is a difference between being a skilled poker player and sitting down at table in hopes of winning fairly versus doing what the MIT Blackjack Team did.

That isn't to say that traditional Wall Street people haven't done anything wrong in the past or are in the right in any way here. It is simply pointing out there is a big spectrum in "its all gambling" and this activity seems like it is closer to the MIT Blackjack side.

> Does it matter that your're underwater by 50%? The goal was to beat Wallstreet, They did.

1. If you end up losing money in the end, I'd hardly call that "beating".

2. "wall st" isn't a single entity. The hedge funds shorting GME might have lost money, but there's plenty of companies that made money on the side, eg. the asset management firm that unloaded their GME shares.

They didn't beat wall street, they just dinged a handful of speculators. Who do you think is on the other side of that 50% loss? I am going to assume that a whole bunch of speculators swooped in yesterday to take advantage of the situation and they just walked away with some easy money, courtesy of the WSB crowd.

> The hedgefunds should definitely take note not to play a dangerous game because losing is always on the table.

Taken at face value, this advice boils down to never doing anything that involves a large risk. No civil rights movement, no D-Day invasions, etc.

There's certainly a reminder here about tail risk, and the ability of the market to stay irrational longer than you can stay solvent. However, the takeaway isn't "only take on big risks if failure is impossible." Taking calculated risks is an important life skill, and so is realizing that humans have pretty bad intuitions about risk.

In hindsight, we may find some funds that had 30 different short positions similar to this one. This one position blew up badly, but if the others come out moderately ahead, and they came out ahead net-net, then maybe this just validates their strategy.

The problem is that people were starting to get in for pure speculation. Two friends of mine who don't care at all about Wall Street told me yesterday that they bought in, because they read an explanation of why they're sure to see big gains on Friday. If the goal was just to beat Wall Street, hurt some hedge funds and get egg on a lot of people's faces... like you said, they've already succeeded, so putting a stop to it before speculative investors get hurt seems appropriate.

Well exactly, if you're holding a single share and you lose $200 dollars in the end, obviously it's not the end of the world.

I think the later investors were coming in because they saw the craze on the news, Facebook, Twitter, etc and wanted to get rich quick. I have a few friends who invested yesterday.

Sorry for ignorant question here not acquainted to stock market mechanisms, but: why the time imposition of tomorrow? Who dictates that storters have to return shares and when?

Frankly I thought with puts you state time limits, and with shorts you decide for yourself when you’ll have to give shares back. If that is not so, then I guess I finally understand why everyone says shorts are super risky.

> everyone who bought yesterday is fighting exchanges whose only option for GME is "sell" because buying is restricted

I can’t really understand how the exchange is saying “no, you’re not allowed to buy, but you can sell all you want” is legal.

>I don't know how some of these shorts will find 20 million shares by tomorrow.

you're confusing shorts with options. shorts don't expire. They can be held indefinitely as long as you have the margin to keep up with the losses.

they could always deal with the lenders, which don't gain anything if their borrowers go bankrupt and they won't even get back their pennystock. And I think these lenders already deal with them quite a bit. And obviously there's still a lot of shares with WSB and I don't see how the current situation prevents offering shares for the rocket-like USD1k.

They are restricting trades because this looks like a possible crime, and they do not want to be known as crime-friendly brokerages. "Your capital is at risk" is not the same as "it's a free for all."

from what I've read, selling gme is the one thing they are allowed to do with it

That would only make sense if they refused you at the door, or after you had sold all investments. Obviously the fact that these people hold shares complicates it.

I agree with the comment above yours, HN turned into Reddit for the last week.

But what's the endgame? That the stock will go up forever, so that the existing investors are perpetually being paid by future investors?

Schrödinger's stock price

* Until observed

> It is for sure GME will hit 30

May I suggest you look into purchasing long-dated GME puts then? The price for the $320 GME PUT expiring in 1 year is $240.