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GME and hedge funds
- Thread starter dukebound85
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I bought Apple in the 90s, in the Scully days. Still have those shares. They are doing OK and have multiplied a bit.
That would make sense if hedge funds and financial markets were hived off from society but the reality is that disorder at exchanges and bankruptcies for asset managers hurt everybody, not just "1-Percenters". Pension funds, non-profits, credit unions, community banks, and college endowments, just to name a few, depend on stock markets and asset managers to support their missions. Those missions are not to make $$$ and damn the consequences but to help people, particularly the middle and working classes.
Just to clear the picture, hedge funds that short sell the GME stock, they are trying to buy back all the stock they can right so it doesn't increase much more? So how come there are people still able to find stock to buy? i saw this on WBS people are still buying.
I was just thinking of this...aren't hedge funds made of "professional" investors making investing decisions with people's retirement/savings? Therefor if they squeeze them, then they are squeezing the average American money/savings, literally putting Americans on the street. If hedge funds go bankrupt, the average American goes bankrupt. Correct?
Do I have this right?
Do I have this right?
In general, short sellers buy the stock they shorted to close out their short position. This usually means the short seller either has capitulated to the price the shorted stock has moved to or has decided the short position is no longer attractive. It's not really an attempt to influence the price; the stock has already moved to a place where the trader wants to get out.
Next, the availability of shares to buy, assuming trading has not been halted by an exchange or regulator, is one of the key drivers of the share price. If demand outstrips supply, the price will increase until demand equals supply. The supply of shares can come from many sources: individuals, brokerage inventory, mutual fund companies, ETF issuers, investment banks, exchange specialists, and market makers, to name a few. So, if a price moves high enough, there will almost always be somebody willing to sell shares. In times of high volatility or panic, it often falls to a specialist or market maker to be the counterparty on a trade, as I said in an earlier post. The bid/ask spread helps compensate these traders for ensuring liquidity on a stock.
You have the essential idea. For example, many pension funds invest in hedge funds. If a hedge fund goes bankrupt, all the pension funds that put money into the hedge fund lose out...which can affect retirees who rely on the pension funds. Asset manager failures are especially dire for public employee pension funds because most use unrealistic annual return assumptions in planning benefit payments. So when a state, county, or city government pension fund portfolio underperforms, it often means taxpayers get stuck making up the difference, through higher taxes or budget cuts. Or both.
Anyone else feel like tomorrow might be the craziest day yet, one direction or another? It is Friday after all.
Could be. But if tomorrow was the third Friday of the month–the last trading day before options expire–I'd say some sort of craziness would be pretty likely absent restrictions put into place by brokers, exchanges, or regulators. And real insanity might happen if we were hitting the last expiration day of a calendar quarter (triple witching day)!
The last line we can agree on. I’ve got my series: 77, 6, 63, 66, etc.
any investor doing naked calls or puts knows the risk is unlimited. UNLIMITED.
this is what’s happening to those “hedge fund managers”. They’re the ones shorting GameStop and AMC and are taking on the “risk”.
the buyers, are buying shares and they’re buying it because they like GameStop or amc. And it’s hella cheap. And they’ve done their homework. They see the amount on the other end of shorting and they’re betting against the “man” so to speak.
suddenly the short or bears are left in a bind. They borrowed those shares (to short) and now need to cover. The price is higher because it’s a secondary market of bid/ask. This is like how doordash jumped from an ipo of $65 to almost two hundred plus within the first hour of opening.
they don’t like the outcome? Then they should not have taken such a speculative position.
if you’ve read WSB long enough, you’ll notice they are very speculative. They will make huge bets and they’ll show the huge losses.
if they lose out—they lose out. They don’t cry to the market makers or the brokerage houses so that trading is halted.
I think it's very hypocritical that yet again WallStreet behemoths are being bailed out. Every day traders are literally being silenced to prevent the losses of those who hold wildly dangerous shorts on Gamestop.
It is, the thing though, we have a different environment today then previous. I remember every time I made a trade I would take the cost of trade into consideration over the spread of the amount I’m trading and that’s my cost. The trade + fee. Now there’s no fee—and I’m surprised no one really realized prior (to the call out bc they still do) with RH (even tho they write it on their site) that RH makes money between the bid/ask.
nowadays, people can also get together online rather easily, as wallstreetbets subreddit has. So it’s a “pool of investors” that’s indirect.
and anytime you have someone whose buying power potentially can influence the market or the stock as a whole, they’re held to a different set (slightly different) rules. Like Travis of uber—he has to get permission to sell the large quantities he has. Or someone whose on the board, they have to too.
I think the only thing the folks who are “oppressing” could stand on is that—and that’s why there might be changes to the way one invests/the rules.
however, that still doesn’t excuse the trading halt which also influenced the price of the stocks—whether intentional or not.
anyways, my prediction is more and more will get into private equity/alternative investment/private placement for growth and investment opportunities.
this will be sorted out and either the rules will change, the hedge fund managers will reallocate more of their portfolio into PE or a mixture/blend of the two. Most likely a blend.
Hammering hedge fund shorters on GME has ZERO effect on... "Pension funds, non-profits, credit unions, community banks, and college endowments..." Maybe stocks will be traded on actual data and not be hypothetically driven up and down by the scum?
Eff'em. Eff'em all.
Hah.
I’ve seen the makeup of San Francisco employees retirement pension fund and know for a fact the firm they use to manage their assets (8% of which is with alternative investments) does not participate in short plays. $25ish billion AUM (as one of the board members like to brag about).
still, even they got slaughtered a bit during 2008 when their liquid (supposedly, mmf that broke the buck) was suddenly illiquid.
most pensions know they have to have periodical payouts so they’ll buy bonds (boring eh) by the truck load. This from a pimco rep, as to why we get the tiny scraps of leftovers (if any) because duh, they have a fiduciary duty to their members (the pension not pimco, pimco is jus in it for the $$ of course) same for eating up the treasuries in 2019.
I’ve seen the makeup of San Francisco employees retirement pension fund and know for a fact the firm they use to manage their assets (8% of which is with alternative investments) does not participate in short plays. $25ish billion AUM (as one of the board members like to brag about).
still, even they got slaughtered a bit during 2008 when their liquid (supposedly, mmf that broke the buck) was suddenly illiquid.
most pensions know they have to have periodical payouts so they’ll buy bonds (boring eh) by the truck load. This from a pimco rep, as to why we get the tiny scraps of leftovers (if any) because duh, they have a fiduciary duty to their members (the pension not pimco, pimco is jus in it for the $$ of course) same for eating up the treasuries in 2019.
My broker just called with a hot tip. Be careful out there.
I’m loving it tbh. Kicking at the stock brokers for no other reason than “**** you” is classic internet shenanigans. Even better when it puts the fear of god into the powers that be.
With that said, I’m not sure introducing volatility into any market is a good idea. And now that pandora’s box is open, shorting stocks will carry even bigger risk into the future.
Oh brave new world which hath what wonders in it.
With that said, I’m not sure introducing volatility into any market is a good idea. And now that pandora’s box is open, shorting stocks will carry even bigger risk into the future.
Oh brave new world which hath what wonders in it.
I don't have any special or privileged knowledge about SFERS (assuming this is the pension fund you're referring to) but a cursory look at its public reporting for 2019 shows some things that indicate exposure to shorting and related strategies:
*SFERS has a 15% portfolio allocation target for Absolute Return strategies.
*This is the SFERS definition of Absolute Return: "Absolute Return invests both long and short, and invests in more than just stocks and bonds, to include put and call options, currencies, interest rates, and macroeconomic trends and forecasts."
*SFERS works with more than 80 outside asset managers for its Absolute Return holdings.
*Derivatives owned by SFERS include $43mm in short positions in equity index futures.
Again, I don't have any deep knowledge of SFERS so it's possible, of course, that SFERS has exited its short positions and/or ended its use of management firms that use shorting since these reports were released.
One of the board members actually shared with me the portfolio allocation.
calls/puts long/short—there are many variations and I’m stating I’ve seen the actual positions (granted this was from a few years ago) and there weren’t crazy short positions or put options.
options are a great way to hedge btw.
$11.2 billion short interest remains. If people do not sell, GME goes much higher still. This is obviously an extremely rare situation as people need to buy shares that do not exist. GME should do an offering, raise a few billion, and buy a viable business.
Not allowing buying on margin? I am ok with it
Not allowing buying fractional shares? I can deal with it
However, not allowing me to buy a stock at MARKET value with MY own DAMN money and LIMIT the amount I can HOLD to 1 share (not counting existing)?
This is ILLEGAL. People need to go to jail, Such blatant market manipulation.
Not allowing buying fractional shares? I can deal with it
However, not allowing me to buy a stock at MARKET value with MY own DAMN money and LIMIT the amount I can HOLD to 1 share (not counting existing)?
This is ILLEGAL. People need to go to jail, Such blatant market manipulation.
Citiadel has a close relationship with Robinhood. I agree that something smells there. But, I think you can still trade GME and others at a real brokerage like Fidelity, who clears their own trades and does not sell order flow.
WBS make it sound like they are going to make the hedge funds and banks pay for 2008, but are these financial institutions shortening GME the same ones that cause the 2008 crisis? I think they are punishing the innocent here?!
Conspiracy time: WBS are the original GME stock owners that lended the stock to Melvin, Capital, and Citron.
Not too crazy, it closed at $325, reading WBS sounded they are going to make it reach $5000. Although they did say the squeeze might not happen on Friday but next week.
Thanks for the insight. One last question, those short seller are borrowing the stock, so as a stock owner why would I want to loan my stock to a short seller? I know I get interest on it but the idea is that he is going to bring it back when its worth less. Is it because I am betting that its going to be worth more in the future? Who thought Gamestop will go up in price? thats crazy.
Conspiracy time: WBS are the original GME stock owners that lended the stock to Melvin, Capital, and Citron.
Not too crazy, it closed at $325, reading WBS sounded they are going to make it reach $5000. Although they did say the squeeze might not happen on Friday but next week.