Rabby
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Stopping the regular folks from trading this is a shit show, but also predictable. The funny thing is, this kind of movement doesn't even matter if you have an actual strategy for making money in the public markets. Buy an out of the money put option if you have to, or buy some shares for justice... then go back to trading normal options and stocks. Or better yet, trade on the volatility and make money every few minutes.
Out of all the news in this story, what really kills me is that hedge funds are actually losing significant money on their short positions. Is this 1992? No, it is not. Are they George Soros? No, they are not. That should be the test for whether or not you should take a short position with no insurance (and for all I know GS may have had insurance).
For example, Lemony Fresh Wealth Consulting, or whatever it was called, lost 30% of 12 billion on the positions they took. Seriously, f@#& anyone who calls themselves a financial manager and screws up that badly. I hope no teachers were planning to retire on that money. This is precisely why I will never trust money to a mutual fund, hedge fund, con artist, or MLM yoga pants seller. Who appoints these experts?
Shorting, and just holding the short position on a stock, without any options to hedge it, is like buying a mansion at the beginning of hurricane season with 120% financing, with your vital organs as additional collateral, and choosing not to insure it because the wind isn't blowing right now. But not only that! If the hurricane destroys the mansion, you might also owe someone infinite dollars because you had a contract to deliver a mansion of any arbitrary value based on arbitrary market rates to them at some later date. BUT WAIT, THERE'S MORE! You also decide to taunt the market by bragging about the huge positions you've taken, which make you vulnerable. Good idea.
A professional fund manager? We need better professionals apparently. Once you figure out how options work, you should never be in the position this hedge fund is/was in.
Meanwhile, as people risk tens of thousands or more, each, buying or shorting this stock, or taking inscrutable options positions... others have controlled thousands of shares through (normal, simple) options. Our risk is limited, as long as we're long or understand how spreads actually work (and have a sophisticated enough brokerage apparently). Why are people jumping into markets before they understand them? I don't get it. This is the definition of dumb money... acting when you don't even know what the consequences to yourself will be. Having no idea about outcomes. And it seems to be everywhere. They write books on this stuff! We could just read the books!
Ahem. Anyway, the hedgies were dumb idiots. They are also amoral bastards for crying to Daddy about the mean kids who took their friends' money away when they threw that money in the street. Most of the people going nuts over these hyped stocks probably aren't any more sophisticated, and they have the disadvantage that Daddy doesn't care about them because they aren't part of a PAC. Robinhood is a limp noodle boiled in polluted tap water.
And in the morning, you will go back to your normal trading and investing activities, which have little or nothing to do with GME, AMC, etc. Because why? You don't need pump and dump schemes to make money in public markets! You just need a normal set of strategies, informed by your knowledge, experience, and objectives. Stick to the plan.
Out of all the news in this story, what really kills me is that hedge funds are actually losing significant money on their short positions. Is this 1992? No, it is not. Are they George Soros? No, they are not. That should be the test for whether or not you should take a short position with no insurance (and for all I know GS may have had insurance).
For example, Lemony Fresh Wealth Consulting, or whatever it was called, lost 30% of 12 billion on the positions they took. Seriously, f@#& anyone who calls themselves a financial manager and screws up that badly. I hope no teachers were planning to retire on that money. This is precisely why I will never trust money to a mutual fund, hedge fund, con artist, or MLM yoga pants seller. Who appoints these experts?
Shorting, and just holding the short position on a stock, without any options to hedge it, is like buying a mansion at the beginning of hurricane season with 120% financing, with your vital organs as additional collateral, and choosing not to insure it because the wind isn't blowing right now. But not only that! If the hurricane destroys the mansion, you might also owe someone infinite dollars because you had a contract to deliver a mansion of any arbitrary value based on arbitrary market rates to them at some later date. BUT WAIT, THERE'S MORE! You also decide to taunt the market by bragging about the huge positions you've taken, which make you vulnerable. Good idea.
A professional fund manager? We need better professionals apparently. Once you figure out how options work, you should never be in the position this hedge fund is/was in.
Musical interlude.
Meanwhile, as people risk tens of thousands or more, each, buying or shorting this stock, or taking inscrutable options positions... others have controlled thousands of shares through (normal, simple) options. Our risk is limited, as long as we're long or understand how spreads actually work (and have a sophisticated enough brokerage apparently). Why are people jumping into markets before they understand them? I don't get it. This is the definition of dumb money... acting when you don't even know what the consequences to yourself will be. Having no idea about outcomes. And it seems to be everywhere. They write books on this stuff! We could just read the books!
Ahem. Anyway, the hedgies were dumb idiots. They are also amoral bastards for crying to Daddy about the mean kids who took their friends' money away when they threw that money in the street. Most of the people going nuts over these hyped stocks probably aren't any more sophisticated, and they have the disadvantage that Daddy doesn't care about them because they aren't part of a PAC. Robinhood is a limp noodle boiled in polluted tap water.
And in the morning, you will go back to your normal trading and investing activities, which have little or nothing to do with GME, AMC, etc. Because why? You don't need pump and dump schemes to make money in public markets! You just need a normal set of strategies, informed by your knowledge, experience, and objectives. Stick to the plan.
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which means option buying isn't a feasible option. Those not familiar with IV, this means they are terribly expensive. This is like having a double wide trailer for sale for $35,000 and then next week, it is selling for $3,500,000 ... all because there might be a gold mine underneath it.
