General > General Technical Chat
Gamestop: Reddit vs. Wall St.
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DrG:

--- Quote from: nctnico on January 29, 2021, 06:12:34 pm ---/--/ If they want to 'unshort' then they have to buy the shares back at the current market price.

--- End quote ---

Are you sure? I don't know, but I am not willing to accept that at face value, even if there are "tax consequences" and even if brokers or money people have specific regulations...again, I don't know, but I think that all trades (covering shorts would be a buy I guess) get recorded - right?

https://money.stackexchange.com/questions/27382/am-i-able-to-conduct-a-private-sale-of-public-shares-at-a-price-that-i-determine

rsjsouza:
The way I understood, if enough stock volume is held by private investors (perhaps waiting for it to get even more value), the short sellers will have vacuum as collateral. I am still learning about all this, thus don't take my sentence as gospel.

In any way to see it, it reeks as one more instantiation of the well known Ponzi/Madoff/Pyramid schemes. 
nctnico:

--- Quote from: DrG on January 29, 2021, 06:18:06 pm ---
--- Quote from: nctnico on January 29, 2021, 06:12:34 pm ---/--/ If they want to 'unshort' then they have to buy the shares back at the current market price.

--- End quote ---

Are you sure? I don't know, but I am not willing to accept that at face value, even if there are "tax consequences" and even if brokers or money people have specific regulations...again, I don't know, but I think that all trades (covering shorts would be a buy I guess) get recorded - right?

--- End quote ---
A very long time ago I to worked at an investment / stock trading firm to get the IT part going so I do know a little bit about it. If you sell short you are selling the shares just as if you own the shares. In the background you 'borrow' the shares from an entity who actually owns those shares. At some point that entity will want the shares back which forces the short seller to buy the shares at the market price. There is more information here:

https://www.investopedia.com/terms/s/shortcovering.asp
magic:

--- Quote from: DrG on January 29, 2021, 06:01:08 pm ---Do all those shorts still exist - yes or no? Holding those shorts costs money (my understanding is that they are not interest-free loans), covering those shorts right now costs a lot of money. Are there still shorts to the tune of 120% of the stock, as was put forth?

--- End quote ---
I don't think it's know whose shorts exist or not, but the total amount of shorts has reportedly doubled over recent days. Looks like some players are willing to take the bet that the current pricing won't last for long. Reddit calls it "the hedgies are doubling down" and keeps buying.
fourfathom:
As far as price goes, during the huge run-up in oil stocks an advisor I knew liked to say : "The markets can stay irrational longer than you can stay solvent".

I assume a lot of those Reddit folks are planning to lose their investment, and see it as the price of "sticking it to the man". 
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