Re:GameStop Is Rage Against the Financial Machine
by delaaxe on Wednesday January 27, 2021 @06:36PM
(#25935691)
Except shorts pay borrow fees but longs can hold indefinitely for free. Borrow fees on $GME often go as high as 80%
Re:GameStop Is Rage Against the Financial Machine
by scoopertrooper on Wednesday January 27, 2021 @07:15PM
(#25936187)
That assumes the longs are unified. The WSB community are heavily promoting Friday as the day their grand scheme comes to fruition. How many of these novice first-time investors will defect when Friday comes around and the shorters opt to wait them out? How many need to defect before panic sets in?
Shall be an interesting week.
Edit: looks like it's already falling apart, the price is down 30% on post-market trading! Expect things to get real once the market opens up.
Re:GameStop Is Rage Against the Financial Machine
by llampx on Wednesday January 27, 2021 @08:26PM
(#25936883)
Any trader knows that after-hours price action does not necessarily translate or carry over into RTH. It is much easier for price to be manipulated in thin after-hours trading.
Re:GameStop Is Rage Against the Financial Machine
by delaaxe on Wednesday January 27, 2021 @08:45PM
(#25937037)
Friday has nothing to do with the shorts (not the short squeeze). Friday is about the gamma squeeze because options expire on Fridays
Re:GameStop Is Rage Against the Financial Machine
by 0xEFF on Wednesday January 27, 2021 @10:12PM
(#25937680)
One thing I’ve read is both a short squeeze and a gamma squeeze have never happened at the same time to this degree.
Is that true? I tried and failed to verify.
Re:GameStop Is Rage Against the Financial Machine
by kyawzazaw on Saturday January 30, 2021 @12:12AM
(#25966354)
That's why there are people rallying amongst themselves to hold. A significant number of shares are with people who simply does not care if they lose it all. They want the hedge funds who are shorting to bleed mostly from the interests.
Re:GameStop Is Rage Against the Financial Machine
by pivoter on Wednesday January 27, 2021 @07:47PM
(#25936546)
this aged badly.
Re:GameStop Is Rage Against the Financial Machine
by scoopertrooper on Wednesday January 27, 2021 @07:59PM
(#25936665)
I just checked it again, they're still down 15% from the market close.
Re:GameStop Is Rage Against the Financial Machine
by delaaxe on Wednesday January 27, 2021 @08:47PM
(#25937056)
Really? The stock did +135% on a single day and you complain about after hours noise
Re:GameStop Is Rage Against the Financial Machine
by nostrademons on Wednesday January 27, 2021 @07:02PM
(#25935998)
80% annualized is tiny on a daily basis - it's like 0.25%. They can afford to wait until next week when WSB has moved on to AMC and BB. Sustaining these high prices requires a continuous influx of new money; once the folks who believe GME is going to $1000 have already bought, what's left are the folks who believe it's worth $10.
Re:GameStop Is Rage Against the Financial Machine
by conanbatt on Wednesday January 27, 2021 @10:28PM
(#25937783)
It's a huge tax. You cant hold that more than a few weeks and you need a huge upside.
Re:GameStop Is Rage Against the Financial Machine
by dcolkitt on Thursday January 28, 2021 @12:17AM
(#25938494)
> you need a huge upside.
Shorting a stock at $300, when it was trading at $16 last month is pretty much the definition of huge upside.
Re:GameStop Is Rage Against the Financial Machine
by conanbatt on Thursday January 28, 2021 @02:30AM
(#25939181)
True, but 80% a year means that you might have to inmobilize a multiple of the capital and by 6 months lose half the investment.
Note that if you short at 300 and it flash jumps to 1000 you are toast.
Re:GameStop Is Rage Against the Financial Machine
by delaaxe on Wednesday January 27, 2021 @08:50PM
(#25937073)
Except when it's already too shorted and there's nothing left to short
Re:GameStop Is Rage Against the Financial Machine
by david-gpu on Wednesday January 27, 2021 @07:12PM
(#25936138)
It seems unlikely that wallstreetbets and other retail investors are going to have much patience. They are already pumping other stocks.
Re:GameStop Is Rage Against the Financial Machine
by ookblah on Thursday January 28, 2021 @12:33AM
(#25938591)
this is probably the exact mentality that got the funds in this position. they have more patience than you think when it comes to making money (which is the end goal), and the other pumping is getting rooted out as shills or distractions.
In reality, when a short covers they buy back the stock and pay back the broker or market maker they borrowed it from. Then the broker or market maker sells it again. Then the short can buy back the same share, over and over again, as long as they can find someone to sell it to them. That "as long as they can find someone to sell it to them" is what's going on here - if everybody HODLs, the stock doesn't circulate, and the shorts have to pay increasing amounts to incentivize other weak hands to sell. But total short interest > 100% doesn't mean anything other than that there are a lot of shorts whose need to cover might blunt some price declines. Unless those particular shorts are right up against their margin limits, they can just hold the short position open until WSB loses interest.