Re:Statement of SEC Regarding Recent Market Volatility
by shakezula on Friday January 29, 2021 @01:43PM
(#25960758)
I think focusing on how it hurt GameStop isn’t the right perspective here. I think it’s more about how greedy and over-leveraged the short holders were. When average Joe goes crazy over-leveraged, the entire world says “well duhh, you took a risk and now you have to pay.” But when a hedge fund does it, they get to just make a call to turn the market off for a few hours and try to bail out their shorts? The hypocrisy is stunning.
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Re:Statement of SEC Regarding Recent Market Volatility
by mike00632 on Friday January 29, 2021 @03:40PM
(#25962186)
"Over leveraged" typically means you traded too much on credit in proportion to how much collateral you have, not that the trade is risky. A very large short position is reasonable for a company that is likely to go out of business.
Re:Statement of SEC Regarding Recent Market Volatility
by shakezula on Sunday January 31, 2021 @12:37PM
(#25980645)
I understand what over leveraged means. This was /also/ an incredibly risky short to start. I’m not convinced that GameStop was ready to go out of business. Struggling, sure, pandemic and all that, and that would justify a put position, but the market also reacted exactly how it’s allowed to and called out a short positions bluff.