Melvin used to slam Tesla when they were short the stock, so now Elon is getting his revenge. He piled on yesterday pumping the squeeze after hours.

quote:

Originally posted by bigeinkcmo:
Not participating but I've been watching it the last few days...somewhat in disbelief. What I don't understand is when it's all said and done and the short sellers have given up their positions to curb more losses, aren't all the other investors who are paying ~$275-350, so far today, now overpaying? I don't see GME being worth the asking price so I view this as a game of pure speculation. Is the end game the stock plummets back to reality? Curious how you guys see this playing out.

Yes, some people will get caught holding the bag.

But at some point, say, $400+ dollars a share, many of the shares being sold are just short sellers having to buy the shares at market to close out their positions. At some point, even a dumb Redditor should see the huge downside risk of buying GameStop at $400 a share.

You would hope so. Lol.

Even the guys who bought at 200 though need somebody to buy. When it falls these guys don’t want to be anywhere near this stock m

I know you said you got out too early but I think you did just fine. Could you have done better? Sure. You could do a lot worse.

I went in this morning on some AMC. Let’s see what happens.

Looking at the 5 day chart for AMC is crazy $5 to $17 straight up.

Aeteocles and Pedro thanks for the information and lessons. Shorting is too risky for my blood as I watched my Step Dad loose $750,000 back it 1980 or so when it was a lot of money...nearly destroyed him...

My brokerage account said they are limiting transactions on GME and AMC to mitigate risk for themselves and their users. Been interesting to watch for sure.

Actually I think PAsig’s post hit the basics a lot more succinctly. lol

https://twitter.com/Investingc.../1354474816414343172

The big boys were not amused

quote:

Originally posted by smlsig:
Aeteocles and Pedro thanks for the information and lessons. Shorting is too risky for my blood as I watched my Step Dad loose $750,000 back it 1980 or so when it was a lot of money...nearly destroyed him...

Shorting is beyond risky. For GameStop, the upside for a short seller entering at $30 a share would be like $26 of profit after lending fees, interest and whatnot *if the company goes bankrupt, never to open it'sdoors and stock drops to zero*. However, the upside risk is *unlimited*. There is no theoretical limit to a share's price, and as the price goes up, the short seller loses more and more money.

As the short seller's position loses money, the short seller begins to owe more and more money to the lender. To get ahead of the possibility that the short seller becomes insolvent, the lender will force the short seller to buy and return a portion of the lent shares.

So, imagine that the stock price is sky high. You are a short seller and you owe like 10 million shares to your lender, so your only hope is to hold onto hope that the stock price drops like a rock really soon. Then, your lender calls up and says, hey, you are waaaaay outside the liquidity/margin/whatever requirement. You need to buy back and return 20% of your shares today. So, you go and are forced to buy like 2 million shares on the market. The sudden spike in demand now jacks up the share prices even more, and now you are losing even more money on the 8 million shares you owe. Your lender calls back the next day and says, hey sorry man, the 2 million shares of demand you created spiked the price of the shares another 40% yesterday, you are outside of your liquidity/margin/whatever again and we need you to buy back and return another 2 million shares. And the cycle repeats.

I’m curious. Is eTrade still a good cheap basic buy/sell platform or have TD & Schwab taken over?

quote:

Originally posted by bigeinkcmo:
Look at that...good old Twitter is being used to protect the interests of elite once again.

I don't think that's fair to say in this instance. Did Twitter make a statement? Or, did an individual user post a quote from CNBC?

Without Twitter, and the ability for other users to post their contravening opinions, we would only have mainstream media, some message boards, and Facebook.

One of my students (like a 16 year old) just spent her entire savings on buying this stock....

I just heard her talking about it an hour ago and had no idea what she was on about until I came here.

My cats breath smells like cat food.

May the force be with her.

I've been watching it all closely.

Have a little bit of GME and AMC.

Nothing I can't afford to lose.

It's wild, to be sure.

The dog definitely doesn't like being wagged by the tail.

quote:

Originally posted by Oat_Action_Man:
One of my students (like a 16 year old) just spent her entire savings on buying this stock....

I just heard her talking about it an hour ago and had no idea what she was on about until I came here.

Good Lord, she's too late and is going to lose all of that.

This is 1600's Dutch tulips all over again.

quote:

Originally posted by PASig:

quote:

Originally posted by Oat_Action_Man:
One of my students (like a 16 year old) just spent her entire savings on buying this stock....

I just heard her talking about it an hour ago and had no idea what she was on about until I came here.

Good Lord, she's too late and is going to lose all of that.

And if so, this will provide a bevy of useful life lessons for her.

-Your actions have consequences.
-Investing is risky.
-The market always corrects itself.
-Don't believe everything you read on the interwebs.
-If it sounds too good to be true, it probably is.
-Don't play around with money that you can't afford to lose.
-Don't rely on memes for investment advice.
-Just because the "cool" folks are doing it doesn't mean you should follow along.
-5 minutes of browsing social media doesn't make you an expert on a complicated subject.
-Etc.

She'll get burned, recover, and be better for it. Akin to financially touching the hot stove.