Stocks and Trading Thread - Channeling your inner Mono

[Admiral Yi]

Here's what I would do if I were the SEC.

Identify the WSB instigators.  Announce that any instigator who sells shares in the next week will be charged with pumping and dumping.  The week gives bandwagoners a chance to unload their worthless shares before the instigators have a chance to.

After that they are on their own.

[Admiral Yi]

https://www.youtube.com/watch?v=4NksiQJY7WU

TD Ameritrade.  Based on this it seems they didn't ban trading in general, only selling naked calls.

Seppuku will be pleased.

[Tamas]

Here's what I would do if I were the SEC.

Identify the WSB instigators.  Announce that any instigator who sells shares in the next week will be charged with pumping and dumping.  The week gives bandwagoners a chance to unload their worthless shares before the instigators have a chance to.

After that they are on their own.

What they do on WSB is telling each other to buy and hold and explaining its because they believe shorts will have to cover and they price will skyrocket. There should might as well be a blanket ban on recommending stock and option purchases on the Internet because otherwise any specific attempt to try and regulate online stock discussion and coordination will be an even more rubbery and abusable set of rules than the apparently honorable SEC is using for regular stockmarket rules.

[Admiral Yi]

What they do on WSB is telling each other to buy and hold and explaining its because they believe shorts will have to cover and they price will skyrocket. There should might as well be a blanket ban on recommending stock and option purchases on the Internet because otherwise any specific attempt to try and regulate online stock discussion and coordination will be an even more rubbery and abusable set of rules than the apparently honorable SEC is using for regular stockmarket rules.

If they hold their shares it would be a moot point, wouldn't it?

[Tamas]

What they do on WSB is telling each other to buy and hold and explaining its because they believe shorts will have to cover and they price will skyrocket. There should might as well be a blanket ban on recommending stock and option purchases on the Internet because otherwise any specific attempt to try and regulate online stock discussion and coordination will be an even more rubbery and abusable set of rules than the apparently honorable SEC is using for regular stockmarket rules.

If they hold their shares it would be a moot point, wouldn't it?

You have lost me.

[Admiral Yi]

You have lost me.

I said the SEC should require the instigators to hold their shares for a week.  If in fact they do want to hold their shares until the short squeeze forces the hedge funds to buy shares at infinity plus one, they have presumably abided by my hypothetical SEC requirement, and there is no punishment.

[Admiral Yi]

Joan, I've been rolling your gamma squeeze over in my mind.

Would you agree that high call volume can exacerbate a price rise but not cause one by itself?

[Tamas]

You have lost me.

I said the SEC should require the instigators to hold their shares for a week.  If in fact they do want to hold their shares until the short squeeze forces the hedge funds to buy shares at infinity plus one, they have presumably abided by my hypothetical SEC requirement, and there is no punishment.

Ah right. But you can't realistically police Internet commenters, unless you are China.

One "nice" thing about this whole narrative from the Wall Street side is that the discussion is about "is it ok for non-guild people to use the tools of the guild?" instead of for example "if it was not allowed to short a company for more than there are shares in circulation, this would have never happened in the first place".

[Josquius]

You have lost me.

I said the SEC should require the instigators to hold their shares for a week.  If in fact they do want to hold their shares until the short squeeze forces the hedge funds to buy shares at infinity plus one, they have presumably abided by my hypothetical SEC requirement, and there is no punishment.

The instigator is well known, I can't remember where but there was a mainstream media piece about him a few days ago, some guy in Boston, and is holding.

[Admiral Yi]

Ah right. But you can't realistically police Internet commenters, unless you are China.

One "nice" thing about this whole narrative from the Wall Street side is that the discussion is about "is it ok for non-guild people to use the tools of the guild?" instead of for example "if it was not allowed to short a company for more than there are shares in circulation, this would have never happened in the first place".

But it did happen with other companies.  I heard on CNBC that short interest in AMC is comparatively small.  Have you heard that other companies besides Gamestop are shorted more than 100% of float?

"This whole narrative from the Wall street side" is something that I have not encountered.  Where are you picking this up from? 

[Tamas]

Ah right. But you can't realistically police Internet commenters, unless you are China.

One "nice" thing about this whole narrative from the Wall Street side is that the discussion is about "is it ok for non-guild people to use the tools of the guild?" instead of for example "if it was not allowed to short a company for more than there are shares in circulation, this would have never happened in the first place".

But it did happen with other companies.  I heard on CNBC that short interest in AMC is comparatively small.  Have you heard that other companies besides Gamestop are shorted more than 100% of float?

"This whole narrative from the Wall street side" is something that I have not encountered.  Where are you picking this up from?

Are you saying that discussion (and not just from the institutional side in fact) has not concentrated talking about the risks of Reddit users coordinating investment decisions, as opposed to the risks of over-leveraged short positions?

[The Minsky Moment]

Joan, I've been rolling your gamma squeeze over in my mind.

Would you agree that high call volume can exacerbate a price rise but not cause one by itself?

There would need to be some movement in the underlying stock, from looking at the wsb sub people were buying the stock as well as the options. When the stock gets close to the strike prices of the options the squeeze is on.

[Admiral Yi]

Are you saying that discussion (and not just from the institutional side in fact) has not concentrated talking about the risks of Reddit users coordinating investment decisions, as opposed to the risks of over-leveraged short positions?

I have seen a fair bit of discussion of the high amount of short selling of Gamestop.  BTW, AFAICT leverage doesn't enter into it.

I've seen plenty of talk about the risks *to* reddit users of buying worthless shares.  What I have not seen is anything approximating "this whole narrative from the Wall Street side about non-guild people using guild tools."

So now that I answered your questions maybe you can answer mine and tell me where you're getting that from.

[Tamas]

Are you saying that discussion (and not just from the institutional side in fact) has not concentrated talking about the risks of Reddit users coordinating investment decisions, as opposed to the risks of over-leveraged short positions?

I have seen a fair bit of discussion of the high amount of short selling of Gamestop.  BTW, AFAICT leverage doesn't enter into it.

I've seen plenty of talk about the risks *to* reddit users of buying worthless shares.  What I have not seen is anything approximating "this whole narrative from the Wall Street side about non-guild people using guild tools."

So now that I answered your questions maybe you can answer mine and tell me where you're getting that from.

Dude, I don't get why you have to be such a white knight to the sanctity of the stock market. I am pretty sure you listened to the experts and most of the media at the onset of this before the more popular "people screwing Wall Street" story overtook the latter.

But let me just get you one example in particular, where the Nasdaq chief declared they might stop trading stocks based on social media chatter.


https://www.nme.com/news/gaming-news/authorities-examine-role-reddit-gamestop-shares-saga-2866973

Nasdaq chief Adena Friedman said in a statement obtained by Sky News: "If we see a significant rise in the chatter on social media ... and we also match that up against unusual trading activity, we will potentially halt that stock to allow ourselves to investigate the situation."

[Admiral Yi]

Yeah, I don't get how you get from there to the guild non-guild business. 

The white knight comment reinforces my conviction that this whole affair is much less about facts and logic as it is about narratives and emotion and which side you're on.  I care about facts and logic.  Other than facts and logic I don't have a dog in this fight.  When somebodysays Robinhood halted trading because they're trying to help out their hedge fund buddies, it sets off a red flag for me because it makes no fucking sense.  So I examine the facts and try to determine what's really going on.  If presenting these facts makes me against the little guy, an enemy of people power and on the side of teh evil hedge funds, so be it.

If you want to discuss facts I'm happy to do so.  If you want to discuss which side people are on, you'll need to find someone else.