Stocks and Trading Thread - Channeling your inner Mono

[Tamas]

Did any of this compel owners of GME to sell their shares?  The price only drops when people sell.

FYI, I linked an interview upstream that says Ameritrade never stopped trading, only prohibited naked calls.

I would think so, as the narrative was that it'd be buying from retail investors that'd keep up the momentum.

Also it could had informed short sellers that further rise to the price is unlikely so they do not need to cover their shorts to prevent further losses.

Obviously it is speculation, but so is your assumption that stop in the upward momentum coincided with the Robinhood/other buying bans by mere accident.

[alfred russel]

To AR's bet that the 1% are monopolizing the chance to short, I think there is a misconception that people in the 1% spend their time playing the public markets.

David Portnoy is lying about losing money on the Robin Hood app. The top 1% don't play in the public markets, as CC noted above, and we know CC is never wrong.

A lot of money of the 1% is actually chasing investment opportunities in the private equity market and those investors really could not care less about placing bets on which way the public market will fluctuate.

I missed this earlier...but it is worth mentioning that to participate in a lot of private equity or angel investing you have the same the same wealth and income tests as for hedge funds, so ordinary investors are frozen out by regulation.

[Josquius]

There's always going to be a certain number wanting to buy and wanting to sell.
Cutting off buy options artificially grossly distorted the ratio the opposite direction to the way it naturally was previously.

Regardless I may have called it too early. Still plenty with millions in who aren't giving up. The plumet isn't continuing.

[Admiral Yi]

I would think so, as the narrative was that it'd be buying from retail investors that'd keep up the momentum.

Also it could had informed short sellers that further rise to the price is unlikely so they do not need to cover their shorts to prevent further losses.

Obviously it is speculation, but so is your assumption that stop in the upward momentum coincided with the Robinhood/other buying bans by mere accident.

What you are describing is not compulsion, it is choice.  No investor on the planet was compelled by Robinhood's action to sell his shares.  Any Robinhood investor could have been back buying with a 6 day lag.

Now I agree with you that for many buyers Robinhood's action changed the narrative.  But the creators of and believers in that narrative are responsible for it.  They created a new narrative in which they were beat by evil conspiring forces and had to sell.  That was their choice.  If all those owners had stayed true to the cause(tm) and held their shares the price would not have fallen.

It's owners who defected from the one true cause and sold shares who caused the scheme to collapse.

[Tamas]

There's always going to be a certain number wanting to buy and wanting to sell.
Cutting off buy options artificially grossly distorted the ratio the opposite direction to the way it naturally was previously.

Regardless I may have called it too early. Still plenty with millions in who aren't giving up. The plumet isn't continuing.

It opened yesterday at 316, finished at 225. Today it is standing at 104. The plumet is real.

[Admiral Yi]

There's always going to be a certain number wanting to buy and wanting to sell.
Cutting off buy options artificially grossly distorted the ratio the opposite direction to the way it naturally was previously.

The way it was naturally when the price was $2, or the way it was naturally when the price was rising 10,000%?

[Tamas]

I would think so, as the narrative was that it'd be buying from retail investors that'd keep up the momentum.

Also it could had informed short sellers that further rise to the price is unlikely so they do not need to cover their shorts to prevent further losses.

Obviously it is speculation, but so is your assumption that stop in the upward momentum coincided with the Robinhood/other buying bans by mere accident.

What you are describing is not compulsion, it is choice.  No investor on the planet was compelled by Robinhood's action to sell his shares.  Any Robinhood investor could have been back buying with a 6 day lag.

Now I agree with you that for many buyers Robinhood's action changed the narrative.  But the creators of and believers in that narrative are responsible for it.  They created a new narrative in which they were beat by evil conspiring forces and had to sell.  That was their choice.  If all those owners had stayed true to the cause(tm) and held their shares the price would not have fallen.

It's owners who defected from the one true cause and sold shares who caused the scheme to collapse.

Here is what you are ignoring: the strategy/expectation (for a lack of a better word) that people followed was that a drive to a $1000+ share price would be sustained by a continued influx of new retail funds as well as the resulting institutional short covering.

What the Robinhood and other bans confirmed -even if we accept that these bans were entirely innocent- was that the above strategy would not be sustainable because the brokers readily available for small investors were not able to cope with the scope and/or risk of the short squeeze. Robinhood themselves and the others admitted that much.

[Admiral Yi]

Here is what you are ignoring: the strategy/expectation (for a lack of a better word) that people followed was that a drive to a $1000+ share price would be sustained by a continued influx of new retail funds as well as the resulting institutional short covering.

What the Robinhood and other bans confirmed -even if we accept that these bans were entirely innocent- was that the above strategy would not be sustainable because the brokers readily available for small investors were not able to cope with the scope and/or risk of the short squeeze. Robinhood themselves and the others admitted that much.

Where does time sensitivity enter into this?  Where are the narrative creators telling their disciples that "if we let up for six days it will all collapse?"

Or for that matter, what's preventing people from starting over?  Gamestop is still heavily shorted.  Recruit some new people and do it again.

[The Minsky Moment]

He ain't wrong though. That's the big take away from Cuban. Robinhood blocking access is when things turned.

What Cuban said is that the meme investors erred in counting on a thinly-capitalized broker-dealer.

[Tamas]

Here is what you are ignoring: the strategy/expectation (for a lack of a better word) that people followed was that a drive to a $1000+ share price would be sustained by a continued influx of new retail funds as well as the resulting institutional short covering.

What the Robinhood and other bans confirmed -even if we accept that these bans were entirely innocent- was that the above strategy would not be sustainable because the brokers readily available for small investors were not able to cope with the scope and/or risk of the short squeeze. Robinhood themselves and the others admitted that much.

Where does time sensitivity enter into this?  Where are the narrative creators telling their disciples that "if we let up for six days it will all collapse?"

Or for that matter, what's preventing people from starting over?  Gamestop is still heavily shorted.  Recruit some new people and do it again.

The catalyst for this originally was short interest wasn't it? It was well over 100%. Officialy NASDAQ numbers won't come out until the 9th but various outlets like Bloomberg have reported short interest around 40% the most.

But otherwise, if your argument is that this would have been an even more effective short squeeze if instead of a disjointed undisciplined and inexperienced massive horde of individuals it was done by a highly coordinated, organised, and disciplined horde of individuals, then of course you are right.

However, the original argument that you challenged was that the buying ban broke the momentum. Just because there are valid arguments for why it should not have broken it, it doesn't mean it did not break it.

[Josquius]

There's always going to be a certain number wanting to buy and wanting to sell.
Cutting off buy options artificially grossly distorted the ratio the opposite direction to the way it naturally was previously.

Regardless I may have called it too early. Still plenty with millions in who aren't giving up. The plumet isn't continuing.

It opened yesterday at 316, finished at 225. Today it is standing at 104. The plumet is real.

It is now.
When they restricted sales it was still heading up

[Admiral Yi]

The catalyst for this originally was short interest wasn't it? It was well over 100%. Officialy NASDAQ numbers won't come out until the 9th but various outlets like Bloomberg have reported short interest around 40% the most.

But otherwise, if your argument is that this would have been an even more effective short squeeze if instead of a disjointed undisciplined and inexperienced massive horde of individuals it was done by a highly coordinated, organised, and disciplined horde of individuals, then of course you are right.

However, the original argument that you challenged was that the buying ban broke the momentum. Just because there are valid arguments for why it should not have broken it, it doesn't mean it did not break it.

No, the statement I challenged was "Vlad stole my money."

[Tamas]

The catalyst for this originally was short interest wasn't it? It was well over 100%. Officialy NASDAQ numbers won't come out until the 9th but various outlets like Bloomberg have reported short interest around 40% the most.

But otherwise, if your argument is that this would have been an even more effective short squeeze if instead of a disjointed undisciplined and inexperienced massive horde of individuals it was done by a highly coordinated, organised, and disciplined horde of individuals, then of course you are right.

However, the original argument that you challenged was that the buying ban broke the momentum. Just because there are valid arguments for why it should not have broken it, it doesn't mean it did not break it.

No, the statement I challenged was "Vlad stole my money."

Ok so you find it possible that the buying ban broke the squeeze's momentum?

[Admiral Yi]

The plumet isn't continuing.

It is now.

[Admiral Yi]

Ok so you find it possible that the buying ban broke the squeeze's momentum?

I find it likely that a number of participants chose to react to the ban in a way that broke the squeeze's momentum.