Re:GameStop Is Rage Against the Financial Machine
by majormajor on Wednesday January 27, 2021 @04:18PM
(#25934086)
How much of "wall street" would lose major money off this? Just a few hedge funds? Is that even that meaningful in the long run or big picture?
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Re:GameStop Is Rage Against the Financial Machine
by jermeh on Wednesday January 27, 2021 @05:17PM
(#25934851)
It's worth noting that these funds blowing up causes large sell-offs of their other holdings, which can in turn cause prices of those assets to fall. Falling prices can cause more sell-offs, and can spiral. Nobody really knows what's going to happen as a result of this since it's pretty unprecedented. IIRC the SPX is down ~3% and VIX is up 60% today.
Re:GameStop Is Rage Against the Financial Machine
by majormajor on Wednesday January 27, 2021 @05:57PM
(#25935323)
"A few firms losing a bet can spiral into huge effects," if true, sounds like a really, really, really good argument for eliminating higher-risk instruments.
"We don't know how bad things we could get if we are wrong" means you're doing something you shouldn't be.