Anyone else following…
This on the US hedge fund market?
Possible seismic shift in the money markets.
yourhavingalarf:
Anyone else following…This on the US hedge fund market?
Possible seismic shift in the money markets.
Don’t understand it
CCP installed asset in the White House and on message Senate now they intend to crash the western economies as part of the plan and surrender terms.Who would have thought it.
Uncleskid:
Don’t understand it
Neither do I…
From what I can gather, a whole bunch of amatuer home traders have got together using Reddit and other platforms. They’ve all bought shares in Gamestore a US company that was a low value stock. This rocketed the price of the shares and the hedge funds who have shorted it are already in for billions of dollars on a stock they gambled would flop.
Just reading a few of the money and business pages, the pundits are suggesting that the whole market could become unstuck because of it.
Shares in game store have been suspended for.now.
The same.reddit group also did the same.to.cineworld.shares.
I don’t get how people.make.money betting on shares to go down.
Surely the point of shares is you buy them and.hope the price rises and.you make a profit.
edd1974:
Shares in game store have been suspended for.now.
The same.reddit group also did the same.to.cineworld.shares.I don’t get how people.make.money betting on shares to go down.
Surely the point of shares is you buy them and.hope the price rises and.you make a profit.
If I understand it correctly “shorting” is selling shares you do not own then before settlement day you buy the shares you need to complete the sale previously made. If the price drops between selling & buying the difference, minus dealing charges, is your profit.
Imnotfkingselling.wolfofwallstreet.meme
but seriously its good the little man is taking a stand
Game of musical chairs where you don’t want to be the last one holding the chair.
The money has already been made, all that’s happening now is figuring out who is going to be left holding the bag when the whole thing collapses. Lots of immature morons on Reddit in their 20s without a clue what they’re doing doing it for the lulz, treating it as a joke. Some of the dumb idiots have even thrown their college money in and they’re facing losing the lot but they’re too dumb to realise.
As for how shorting works…
Person A borrows shares from person B that they say they’ll give them back on X date. They sell those shares to person C for say £10 a share. They’re betting the price of the shares will drop so they can buy them for £1 a share and give back person B what they owe on the date they’re supposed to, pocketing a profit of £9 a share.
Where this is going wrong is that the wallstreetbets mob are buying the shares in gamestop and not selling which is increasing the price. Person A then has a problem because they have to give the shares back to Person B by the date they’re due or pay serious penalties so they end up having to buy them at the price they are which, because there’s so few for sale, cost more than they sold them for to person C. Person A then ends up making a loss and in this case some hedge funds who’ve been shorting Gamestop have lost $billions over the last few weeks.
Conor:
The money has already been made, all that’s happening now is figuring out who is going to be left holding the bag when the whole thing collapses. Lots of immature morons on Reddit in their 20s without a clue what they’re doing doing it for the lulz, treating it as a joke. Some of the dumb idiots have even thrown their college money in and they’re facing losing the lot but they’re too dumb to realise.
I dont disagree with you.
I would advise anyone not to jump on this. In fact dont invest in such volatile stock at all, if you have no idea what you are doing.
That being said… It will be interesting to see what happens.
Wallstreet has been run by immature morons for ages. Making stupid bets for ages. Shorting is not a good practice and is often abused.
If I had to bet. A lot of people will jump on this and wallstreet will lose big.
The problem is though, it doesnt matter if redditors lose out. If these big wallstreet companies lose out then we all could be in trouble. Because the whole system is so stupidly interconnected. e.g. Hedgefunds and banks. If a hedgefund goes bankrupt owing a bank billions that is not good.
I guess it does not matter either way because we all know we are due a recession due to covid.
Carryfast:
CCP installed asset in the White House and on message Senate now they intend to crash the western economies as part of the plan and surrender terms.Who would have thought it.
Carryfast, you really do persist in spouting absolute ■■■■■■■■.
Is this a game for you? Do you really not understand much of what is going on around you? Or do you really believe all the stuff you throw out? It’s amusing but also slightly worrying.
I have been following this, but as I understand it, it’s the brokers that stand to lose. When someone ‘borrows’ shares to sell, the broker uses the shares that they hold for their other customers. It’s similar to the way a bank lends out money that you and I leave on deposit.
If those customers want to sell the shares that they own, the broker may have to buy some in at the inflated price. This is where the bank analogy falls down because the bank can easily borrow more money, but shares are a finite resource.
Santa:
I have been following this, but as I understand it, it’s the brokers that stand to lose. When someone ‘borrows’ shares to sell, the broker uses the shares that they hold for their other customers. It’s similar to the way a bank lends out money that you and I leave on deposit.If those customers want to sell the shares that they own, the broker may have to buy some in at the inflated price. This is where the bank analogy falls down because the bank can easily borrow more money, but shares are a finite resource.
Its the domino issue though.
I.e if one falls down it creates a cascade.
Like I said though, guess it doesnt matter much we all know we are due a recession.
If you buy shares you may lose all the money which you spent. If you short shares you may lose £∞
Well I heard a theory that there may be some big players behind the scenes who used the reddit crowd as an up front to try and make money / f-k their competitors. This/those big players didn’t start it but took full advantage of the developing situation - bought shares early then sold them which would explain the large upswing as i find it hard to believe a bunch of trolls can cause a ripple worth billions using their own pocket change.
Re them betting their college money - of course they will. With Biden in office they can 110% count on a bailout/loan write-off.
edd1974:
Shares in game store have been suspended for.now.
The same.reddit group also did the same.to.cineworld.shares.I don’t get how people.make.money betting on shares to go down.
Surely the point of shares is you buy them and.hope the price rises and.you make a profit.
its quite simple really but ive only just worked it out myself
lets use the example of bicycles
a bike costs £500. but for some reason i know that in a couple of weeks time bikes will cost £100. maybe i know of a new factory in China that is going to start making really cheap bikes, maybe i know some gangsters who are going to steal a container of bikes and sell em for £100, doesnt matter why but i am convinced bikes are going to drop to 100
i come to you, ask to borrow you bike for a couple of weeks, immediatly sell your bike for 500 quid, wait 2 weeks and buy another bike for 100, give you your bike back and keep 400 pounds profit. you have your bike back, i made a quick profit. everyone is happy
thats shorting a bike or in the real world a stock.
i bet they teach this in private schools!
Santa:
I have been following this, but as I understand it, it’s the brokers that stand to lose. When someone ‘borrows’ shares to sell, the broker uses the shares that they hold for their other customers. It’s similar to the way a bank lends out money that you and I leave on deposit.If those customers want to sell the shares that they own, the broker may have to buy some in at the inflated price. This is where the bank analogy falls down because the bank can easily borrow more money, but shares are a finite resource.
if the price of bikes rises to some crazy price like £2000 because the rumour about the factory in China wasnt true and everyone buys all the bikes on the market and refuses to sell them, i am forced to go and buy one because i still have to return the bike or i get sued, so i lose £1500
this is a short squeeze
Carryfast:
CCP installed asset in the White House and on message Senate now they intend to crash the western economies as part of the plan and surrender terms.Who would have thought it.
Who put 10p in Carryfast? Own up now you’re not in trouble, Miss just wants a word with you
chrisdalott:
edd1974:
Shares in game store have been suspended for.now.
The same.reddit group also did the same.to.cineworld.shares.I don’t get how people.make.money betting on shares to go down.
Surely the point of shares is you buy them and.hope the price rises and.you make a profit.
its quite simple really but ive only just worked it out myself
lets use the example of bicycles
a bike costs £500. but for some reason i know that in a couple of weeks time bikes will cost £100. maybe i know of a new factory in China that is going to start making really cheap bikes, maybe i know some gangsters who are going to steal a container of bikes and sell em for £100, doesnt matter why but i am convinced bikes are going to drop to 100
i come to you, ask to borrow you bike for a couple of weeks, immediatly sell your bike for 500 quid, wait 2 weeks and buy another bike for 100, give you your bike back and keep 400 pounds profit. you have your bike back, i made a quick profit. everyone is happy
thats shorting a bike or in the real world a stock.
i bet they teach this in private schools!
Or you could use the example of shares! You borrow some shares, sell them, shares hopefully drop, buy back for less money, give back, keep the profit
switchlogic:
chrisdalott:
edd1974:
Shares in game store have been suspended for.now.
The same.reddit group also did the same.to.cineworld.shares.I don’t get how people.make.money betting on shares to go down.
Surely the point of shares is you buy them and.hope the price rises and.you make a profit.
its quite simple really but ive only just worked it out myself
lets use the example of bicycles
a bike costs £500. but for some reason i know that in a couple of weeks time bikes will cost £100. maybe i know of a new factory in China that is going to start making really cheap bikes, maybe i know some gangsters who are going to steal a container of bikes and sell em for £100, doesnt matter why but i am convinced bikes are going to drop to 100
i come to you, ask to borrow you bike for a couple of weeks, immediatly sell your bike for 500 quid, wait 2 weeks and buy another bike for 100, give you your bike back and keep 400 pounds profit. you have your bike back, i made a quick profit. everyone is happy
thats shorting a bike or in the real world a stock.
i bet they teach this in private schools!
Or you could use the example of shares! You borrow some shares, sell them, shares hopefully drop, buy back for less money, give back, keep the profit
But it does still leave me wondering why anybody would lend shares to anybody in the first place. I fully understand why you would borrow them, but what’s in it for the lender? I am obviously not a financial expert, eh?
Dipster:
But it does still leave me wondering why anybody would lend shares to anybody in the first place. I fully understand why you would borrow them, but what’s in it for the lender? I am obviously not a financial expert, eh?
For a fee of course, great money to be made. Just like there was good money to be made in sub-prime mortgages and insuring those mortgages.
I surely would enjoy watching the financial sector burn, unfortunately it won’t go that far and the billions they’ve lost will be gained back on the back of the working man.