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Old 02-06-2021, 05:36 PM   #71 (permalink)
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So in the end it weren't the Redditors that put GameStop to its greatest heights. Other hedgefunds like BlackRock broke the pact and joined the frenzy for profit. And stepped out again in time, probably even shorting; cashing billions in a short squeeze turned pump-and-dump.
In the end Wall Street always wins, even if some traders lose.

As for banning naked shorts, that would have negative implications.

A short is nothing more and nothing less than a promise to buy shares at a certain moment in the future. That promise holds a certain value, typically the current value of those shares plus a loan fee. The stock exchange formalizes and executes the promise.

Trading has evolved; traders use options to reduce risk or enhance possible profits as desired. Many strategies need these promises to function properly.

If the exchange would impose blocking restrictions on shorts then the traders would look elsewhere. A grey market that provides the very services the exchange sought to ban would emerge, and this time it would all happen out of sight of the main market.
It would be less convenient, costs and risks may be higher, but it would also be more secretive - right what the shorters want.

A ban on short selling is therefore not a good idea.
But option transactions should at least meet the same scrutiny as share transactions. These products do have a valuation just like shares do, and traders should be held accountable for their actions concerning them just the same.
If I interpret the videos above correctly that isn't the case now, and it must change.

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Old 02-06-2021, 09:36 PM   #72 (permalink)
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...that isn't the case now, and it must change.
It should change, the question is whether, at long last, it will. I always thought hedging was to buy shorts and longs on the same stock and somehow win whichever way it goes. But I'm not a financial guru. Max Keiser is taking victory laps,
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Old 02-08-2021, 11:49 AM   #73 (permalink)
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You cant win buying both sides due to the purchase losses. You do get to minimize the downside, and hopefully not offset your profit by very much
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Old 02-08-2021, 06:44 PM   #74 (permalink)
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Selling short is hoping to make money on a drop in the share price. Buying options can protect against the stock actually going up. Long is holding what you've got and ignoring what's going on day to day.

Me, I couldn't tell you what funds my 401k is in, and I'd actually have to make a guess as to which company is running it. I know it's a big company that we've all heard of, but I'd have to ask my wife which one.

It warms my heart to see a short squeeze in the news, though.
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Old 02-09-2021, 04:40 AM   #75 (permalink)
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I decided long ago never to buy options. For what I'm doing now (matching the number of shares to the inverse of the price so the total value remains more or less constant) I don't need them anyway.

Yes it makes no sense to buy both sides if they have the same threshold. You can make money if you expect the stock to change a lot by buying options that pick up the extremes either way, but you'd lose all if the stock decides to remain at the same level until the options expire.

I prefer my strategy, which trickles out money if the share price keeps fluctuating.
The problem is finding stocks that will predictably go up and down

That's why I bought a few GME shares. GME now trades for way less than what I bought it for initially, but it went zigzag often enough (triggering sells and buys) to cover most of my loss if I sold my current position at the current price.
As said before, it is just entertainment (8 shares now - I started with 2).
There's still a lot happening around GME so it may likely go up and down quite some in the coming weeks. I'm watching.

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