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Since shorting isn't illegal they aren't thenically criminals. Your feelings towards them don't matter.
Take one (criminals) down another will just take its place. Doesn't really matter to them (criminals).
Why do we need to catch criminals?
It's not the short selling that's criminal. It's the manipulation of the stock that is.
So here's what we know.
Every single major platform has restricted purchases of GME to retail investors, but not sell orders. The restrictions are not only in the form of 'no margin', but an outright ban on buying.
Market trading suspended multiple times per hour. Yesterday in the first hour, it was being halted at least once per minute.
Short interest remains high at 124%.
For most of the day, most retail were unable to buy through their online brokers. And we see a huge sell off as a result. But short interest is still high? How could this be? If retail are selling, and not allowed to buy, you would expect short interest to decline. As of Jan 29th, short interest actually increased by about 0.5% vs Jan 28th. How could this be?
Speculation. Only retail were blocked from buying. Institutional funds can trade directly without the broker. So hedgefunds who are short are free to drive the price down by buying/selling from/to each other. In reality there's no real money or stock changing hands. It's like if you sell me a rock for $100 and I sell it back to you for $99.99, and then you back to me for $99.98 and so on. By the end, you basically net out to near 0 but you've show trades dropping down that's printed on the exchange. Meanwhile, retail isn't allowed to buy.
So what? You might ask. Well there are a ton of options at play. And if you can drive the price down, you can settle those options for a lot less, or not all if you can get the price below your option's strike price.
What's more, as you drive the price down, anyone who had previously purchased on margin, or has a stop loss setup can get their position forcibly closed out. Seems unfair given that a huge chunk of the retail sector would have been happy to buy up those shares at a much higher price than being posted on the ticker.
You can see at the end of the trading session yesterday, the stock dropped to below $200. It dropped very sharply into the close. Why? because a bunch of positions get consolidated and cleared at the closing price. Less than an hour later, the stock price rockets upto above $300 in after hours trading. And now that retail traders are allowed to buy $GME again, we can see the price is well into the $300s.
So maybe you think that all these $GME buyers are speculators, gamblers, and doing the wrong thing, and if they lose all their money, it's their own problem. Fine. But let them be responsible for them losing their own money. Why are trading platforms and clearing houses changing the rules of the game that have a clear benefit for the other side of the trade? If you're angry or indifferent about the WallStreetBets speculation and pump of Gamestop, then you should to be angry or indifferent about hedgefunds shorting a stock to >100%. This is a mistake, and a free market should be allowed to sort it out. Let the hedgies go BK and whoever's left holding the bag at the end of the day, well.. tough luck.
How much of the short is owned by retail is the question everyone is avoiding. At this point its not necessarily hedge funds and institutions
Hard to know for sure, but chances are almost none. Why do I say this?
Because if you were short before the squeeze started, you either exited willingly, or forcibly.
And although retail can sell any GME they own now (even if they cannot buy), they cannot sell any stock they dont own. This restriction is currently in place on almost every single brokerage firm.
Also, the number of shares available to borrow is extremely low. And the cost to borrow is extremely high, and the broker has high risk to allow you to short, so they only allow their favored accounts to actually short.
All these things considered, probably a very tiny number of retail investors are ACTUALLY short.
Today is an important day on the short side. It's a Friday, so many options get triggered TODAY. There are billions in deep in the money call options that must get executed.
There's probably a lot of shorts that are still far away expiring. Also, now that the stock has skyrocketed, surely more hedge funds are willing to make short positions. I mean, we all know GME is clearly way overpriced as it is right now.
Maybe some of the brokers are manipulating the market by restricting trades as they have a vested interest in making GME go down. Maybe not. But one thing's for sure. Some of them are doing it because they don't want to lose money. People could get negative balances on their accounts and it would be difficult to collect these debts. Brokers would have to pay out of their own pockets to cover these debts. Most of the people posting about GME on WSB now are shills and got in early. At this point it's like a pyramid scheme on the WSB side and a game of chicken between the retail investors and institutes.
And the funds could have bought shares but not yet used them to close out their short as the short contract wasn't due until today or much longer. I dont think one fund manager sat there and said- "Oh, Im just going to watch and do nothing"
Indeed, watching the conversations here as well as on lot of other forums, you're finding more and more comments of amateur traders being bolt and telling everybody how things are working just because they feel big right in this moment after having won a little.
As you said, I suppose you can be assured that there are no people going crazy or freaking out otherwise because they don't know what to do. These are bankers, just too smart for this.
Err no. Short selling is the act of selling a stock you dont own. Some people are short via call options though and those options do have expiry dates. The short interest I speak of is the number of shares actually sold. Not the number of shares that may be required to purchase as a result of an option being executed.
Who's they? Nobody wants to lose money. Why would the brokers lose money?
Only if the owner of the stock has bought on margin. You cannot go negative if you own the stock outright. Further more, most brokers already stopped people from buying GME on margin like $250 ago. Meaning anyone who bought $GME at ~$75 at 5:1 need only fund their account with an additional $60 to cover their margin. So it's almost impossible for it to be the case that the account can go negative. Not to mention, Robinhood already forcibly closed out margin accounts yesterday.
Yes it's exactly like a pyramid scheme. And so long as the short interest is above 100% (or even 50%), you have a backstop of hedge funds. You always have a buyer for your shares as long as the short interest is high. The hedge funds cannot hold an open short position forever. It cost money to short. There is a 'borrow' fee. Ultimately you borrow from the longs. So if you short and don't cover, and have infinite capital to prevent getting a margin call, you end up paying infinite interest on borrowing the stock. And if the stock keeps rising, the fees keep rising (assuming flat rate of interest). This is the bet many on WSB are making. They are betting that shorts need to cover and pay out massive massive amounts.
Lucky for WSB 'investors', there seems to be ever greater interest in shorting the stock. It's way over valued for sure, so its an attractive short. But that's just more money to squeeze. This thing collapses when the shorts capitulate, and people are too afraid to short.
They didn't.
Melvin Capital called up his homies at Citadel to get a coushy $2.75B in extra funding so they wouldn't be forced to cover. Woopsie, that resulted in the stock price doubling, because now everyone knows they're good for more money. Melvin is now insolvent. But hey, Citadel is a major clearing house, and they pay these online trading platforms like Robinhood for all their order flows. So Citadel, who is effectively short GME by virtue of being a financial backer (owner) of the hedgefunds directly shorting, is Robinhood's biggest customer. Robinhood make most of their money by selling orderflow. Conveniently they decide to stop allowing people to buy the stock.
So no. They didn't just sit around and do nothing. They took extreme action to knock the price down as much as they could so they could settle at far lower prices.
Eh what ever you think you guys are going to have field day whenever Vandham arrives.
That's interesting. I wasn't well informed and thought short interest was a metric for options.
Well, you could get a negative balance with margin trades even with no leverage. Imagine if you shorted a stock at $100 now, market closes and tomorrow it opens at $300. Now you're left with a negative balance which the broker might have to pay for.
With naked shorting going on, surely some of these brokers and their liquidity providers aren't making real trades and they could be market makers/hedging against retail investors. There's a lot of ways for the brokers to lose money.
Haha, Freetrade forced to close off US stock sales for the entire day.
I think you're thinking of 'gamma' and 'theta'. I'm less informed on the options side of things. As I understand, all options are currently 'in the money'. Which means market makers MUST BUY to remain 'neutral' on the options they've written. But I'm not all that clear how the mechanics on this works.
Yeah but that's if you're short. You cannot short this stock right now. And you cannot go negative on an asset you buy outright.
Technically it's possible, and in various different ways.
The CEO of WeBull came out and blamed the DTC. The clearing houses apparently demanded their brokers to maintain a 100% collateral on $GME trades. This is highly unusual and is well above the normal 1-2% they hold. So it's kindof a liquidity problem for platforms like WeBull. It COULD be the case with RobinHood as well, but Vlad specifically denies this and does not explain in any clear terms why buys were suspended. But the WeBull CEO explained that if buy orders were allowed, and the clearing houses couldn't collect the funds from the now bankrupt hedgefunds, THEY would be on the hook for paying out as it's their responsibility to handle the clearing. So then they would be required to chase the hedgefunds who dont have any money. So by stopping buy orders, they limit their risk, which has the effect of protecting the hedgefund from even further losses. Which is bullshit, because if it happens the other way around, they go after you, your home and what not.
WallStreet wins again!
@smallbibi
The outstanding share is 6.97M in total, this is how many shares people possible to buy. The share they trying to short is 7.12M. Which is 138%. Therefore, the interest rate for short selling is sky high.
Edit: They are too greedy and fuck up the risk management
It's down to 113% now according to S3 Partners research.
Still not enough stock for all shorts to buy. There's no limit to how high the insanity can go.
GME is very overvalued right now. Surely more people are going to short GME since it will eventually crash.
Don't do that, it is too too too risky. I do not know how to tell in English...
@randvegeta
This is dangerous too ... Let's just watch it as a popcorn movie and see if it triggers a financial crisis or riots.
APE STRONG 🦍🦍🦍🦍🦍🦍🦍🦍
I live near Robin Hood's office in Silicon Valley, and there were a bunch of people outside protesting.
I don't even understand why people still use Robin Hood... Most other brokers have free trades these days, which was Robin Hood's main selling point. Nowadays I don't see a reason to keep using Robin Hood instead of moving to a more established brokerage.
Short at your own peril.
Shorting a clearly overvalued company may sound like a no brainer, but the 30% cost of borrowing and >100% SI means the fundamentals is not about the business, but how much the longs can extract from saps who sell what they dont own, and have only 1 way to get out.
Put it another way.
How interesting is it for you to own an asset that pays out 30% interest?
together ape strong many banana apart snake eat banana 🦍🦍🦍🚀🚀🚀
tell snek no my banana 🚫🐍👎
Jean Claude Van Damme?
HOLD THE LINE! To the MOOOOON!
If you are switching, help a brother out in the process.
https://act.webull.com/in/WQI3szgGioKb/jh6/inviteUs/
According to everyone, I thought today was the day it was going to go sky high as all the options were expiring. But given its volatility it was relatively flat. I guess the shorts covered earlier than people thought. So now its just retail against retail blood sport for the last one standing when people get bored and bail out next week.
I've never used Robin Hood so I'm not switching anything
I use Schwab, Merrill Edge and Wealthfront. My employer uses Schwab for our RSU grants and they seem pretty good. I've got my IRA at Merrill Edge to take advantage of Bank of America's preferred rewards program to get better cashback rates on my credit cards 
Short interest is still over 100%. Trading was still restricted today (1 share buy limit), so it's hard to know exactly how that plays out.
Retail are hardly even allowed to participate at the moment.