Re:Bankrupt Hertz targets Robinhood traders in plot to dump ...
by dragontamer on Friday June 12, 2020 @08:20PM
(#23505372)
> Not exactly, the current shareholders are getting paid interest to loan out their shares to short sellers.
I don't believe Robinhood traders get this benefit. A premium service like Interactive Brokers provides the ability to lend shares. Sophisticated investors buying/selling and trying to make money through bankruptcy is fine.
The issue I have is that normal, retail investors, are going to be caught up in this game. Under traditional retailer strategy (ie: buy and hold, and/or dollar cost averaging), the retail investor is going to be wiped out here.
> Or doing all that indirectly through options. If you know that the stock will still be worth 12 cents in 4 months, that can earn a fortune.
You don't need to own any shares to buy or sell options. You can play the options market whenever you feel like.
Not exactly, the current shareholders are getting paid interest to loan out their shares to short sellers.
The longer this gets drawn out, the more interest they collect, and owners could come out ahead of the short-sellers. Even if the shares themselves go to $0 (as everything does in the long-run).
Or doing all that indirectly through options. If you know that the stock will still be worth 12 cents in 4 months, that can earn a fortune.