GameStop + Robinhood + Reddit

[Fat Charlie]

Originally Posted by JSH

There are already signs that the Reddit group has picked new targets and moved on from GameStop. WallStreetBets is targeting silver today and pouring money into silver stocks.

I looked in on them. They're saying not to do what the news says they're saying to do.

Originally Posted by RedDevil

They'd go broke, but who covers them, e.g. who then pays for buying back the shares they shorted? The NYSE?
Because that's the party that will ultimately want to prevent this scenario.

Who covers them is whoever enabled the naked shorting. It isn't a few bad apples, there are a lot of people doing it, allowing it, paying the hedge funds to do it for them... Yes, the really big ones don't want to be on the hook for bad debts like this. But the answer is to crucify the ones corrupting the system- and that's the ones shorting, not the ones squeezing.

[JSH]

Naked shorts are illegal in the USA.

[rmay635703]

Originally Posted by JSH

Naked shorts are illegal in the USA.

Why is Naked Short Selling Both Illegal and Common Practice? | First American Stock Transfer

Take care when searching for said topic as google thinks it’s something else

[Fat Charlie]

Some things are more or less illegal depending on who does it.

[JSH]

Originally Posted by rmay635703

Why is Naked Short Selling Both Illegal and Common Practice? | First American Stock Transfer

Take care when searching for said topic as google thinks it’s something else

Which means the SEC needs to get to work.

[RedDevil]

I don't think shorts, even naked shorts, should be forbidden.
They just need to be exposed so everybody knows what they are dealing with, literally. The actual number of shorted shares should be freely available and shown at each stock's statistics overview.

[Xist]

Well, Gamestop is down to $90. It hit $483 on the 28th.

I don't see it going back up.

How many redditors actually own stock and how many only bought options?

[RedDevil]

AMC Entertainment Holding is down some too, but unlike GameStop it's a company with reasonable prospects. It should not be shorted that badly; this is a clear case of hedge funds trying to sink a good company for bare profits.

I'm trading with limit orders. The drop triggered two buys so now I own 7 shares. It went up pre-market, so I may well sell 3 again.

For now I'm solidly in the plus. My net investment is about $40, way less than what they are worth at the time of writing this.
I don't expect it to get me wealthy though, it is just entertainment stock (obviously).

[Fat Charlie]

Originally Posted by RedDevil

I don't think shorts, even naked shorts, should be forbidden.

Shorts take advantage of market movements. Shorts at institution scale move the market for advantage. Naked shorts are selling something they don't have (haven't even borrowed) to move the market for advantage.

If you call it what it is (an option? a hypothetical?) then it's okay. But they say you're buying a share when it doesn't exist. It's couterfeiting. It's fraud. I'm against it.

[RedDevil]

I don't know how one could determine whether you're buying 'real' shares, borrowed shares or imaginary 'naked' shares.
Maybe it isn't even practically possible to ban naked shorts, or there are unforeseen disadvantages to doing so.

There's an advantage (in my eyes): it increases volatility, which brings larger opportunities for traders like me to buy low and sell high, matching the number of shares with the inverse of the stock so the total value remains constant.
It would be helpful to know exactly how many shares are shorted at all times though.