This is a sample guest message. Register a free account today to become a member! Once signed in, you'll be able to participate on this site by adding your own topics and posts, as well as connect with other members through your own private inbox!
I don’t trade options but I’ve gotten some lessons in here and understand them. My question still remains. You can short stocks or you could buy the same stock on margin. In both cases, I can see where wild swings in a stock could put your account negative. In that case, I assume the broker has to cover it as even if they liquidate everything you have less than you owe. Is that then a valid reason for brokers to limit buys (so many people are using margin now) on stocks that they think could drop wildly? GME at one point yesterday was down 80% from the high.
You're not wrong. Their short interest has not decreased very much, so it's assumed there have been new shorts coming in.
It's really unusual for a broker to give you enough rrope to hang yourself. They will give you ability to borrow against some x% of your holdings. If your holding falls below some x% they call you.
Options are due today and all of the puts on GME and AMC could very well end in the red. That means it's buying day regardless to the currently extorted prices we autists will be charging them.
I can’t stand that putz.
Jake Offenhartz@jangelooff
·
4h
Listening to irate New York hedge fund billionaire Leon Cooperman on CNBC right now lamenting people "sitting at home getting their checks from the government, trading their stocks." “This fair share is a bull#### concept," he shouts. "It’s a way of attacking wealthy people."
You are supposed to have liquidity to back up any covers but, as we know from 2007-8, they have different rules for their big institutional players than they have for Joe Blow. As options move into/more into the money the seller has to put up capital in escrow to cover.
![[icon]](/data/avatars/m/5/5167.jpg?1660313464){kind=avatar}
You can buy OTM puts but you still have to have an investor on the other side taking the other position. Think of it as a ML play. The price goes up as the outcome becomes pretty obvious.
https://www.barchart.com/stocks/quotes/GME|20210129|78.00P/overview
Shorting now makes tremendous sense. Reddit bros will only be able to hold for so long with the allure of a big payoff. The hedgies are freaked because they shorted at $4!!!!
There's a good chance this is just a short term rise before the "diamond hands" finish the squeeze and move on to other victims, leaving the stock to drop precipitously. You could buy a put option at a strike $50 or $100 lower than the value of the stock which gives you the right to sell 100 shares of the stock without the infinite downside of shorting the stock. Since volatility is crazy high, the options will be expensive, but you can pay for that by shorting another put option at a lower strike. It's difficult for me to draft a firm example since I don't have actual option prices right now, but one idea I'd throw out is buy a Feb 19th $200 put and sell a Feb 19th $50 put against it.
Good luck with that. Hence why it will most likely fail ultimately.
Nothing new at all. Just far more advertised because of the internet.
Seems they would rather preach market fundaments to us that actually take a short position. Curious.
I have some NOK too, but there is a lot less short % here than other stocks. 59 mil short shares vs 5.6 billion shares outstanding. Seems like there is plenty out there to cover with.
The only thing I’d say is if some of your good stocks go down in the near term on no news, that might just be hedge funds selling to cover shorts elsewhere so don’t panic.
Oh yeah....the tables are being set-up for it.
Thanks. I think it mostly depends to what lengths they will go to get it below $9. Clearly there are almost unlimited buyers ready and willing to fire it back up and keep it above $9. Will they be allowed to buy?
