GameStop Investors Who Bet Big–and Lost Big

Re:GameStop Investors Who Bet Big–and Lost Big by newacct583 on Monday February 15, 2021 @04:32PM (#26147733)

This is wrong! "Holding" does nothing. The very nature of short trading (remember, the thing that was supposed to have been exploited?) means that even if YOU hold, and everyone else does, your brokerage can loan that share to someone else who will sell it (because they think it will go down, of course).

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Re:GameStop Investors Who Bet Big–and Lost Big by harambae on Tuesday February 16, 2021 @10:53AM (#26155019)

>your brokerage can loan that share to someone else who will sell

There were instructions going all around WSB with "put in a limit sell order at $10000000 to prevent them from loaning your shares" as well as directions on how to go into your trading account and disable "stock yield enhancement" or whatever it's called on the platform.

(And I hate that I'm in the position of defending WSB, a group of degenerate gamblers dragging in new victims every day. But it just so happens that they were on top of this one particular angle.)

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Re:GameStop Investors Who Bet Big–and Lost Big by newacct583 on Tuesday February 16, 2021 @12:32PM (#26156394)

I don't think that works. I'm not an SEC regulator, but I don't believe there's any requirement that the brokerage hold real shares for the full total of all outstanding sell orders[1], or to logically segregate the holdings of different customers.

If someone comes by and tries to buy that million dollar share, the brokerage is merely required to honor the trade with a share they have from anywhere, including one purchased from the market or held by a different customer.

Again, this whole notion of "Hold the Line" is just not how trading works.

[1] I mean, that's just trivially violated by a perfectly normal short sale by definition.

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Re:GameStop Investors Who Bet Big–and Lost Big by joshspankit on Monday February 15, 2021 @06:04PM (#26148806)

I mean I feel like it was really “hold what you buy until the funds are forced out of all their short positions”, which (and maybe I’m wrong) means that the price would have kept climbing with no sells to bring it down.

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Re:GameStop Investors Who Bet Big–and Lost Big by newacct583 on Monday February 15, 2021 @09:55PM (#26150415)

Again though, that does not work. Because "holding" that stock does not prevent the very same share from being sold by someone else in a short trade. To maintain a price in a market you need to continue to buy the security.

Again, this is just fundamental "Trading 101" stuff, and it's just amazing the extent to which the WSB community straight up refuses to believe it.

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Re:GameStop Investors Who Bet Big–and Lost Big by bmurphy1976 on Monday February 15, 2021 @07:20PM (#26149509)

Yes, that was the impetus for holding. Of course reality got messy really quick.

I'm sure given enough time even if WSB were able to hold Wall Street would have figured out some way to exploit it. The other driver was the hope that the SEC would step in and do something to even the playing field, but that's unfortunately even less likely in my opinion.

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Re:GameStop Investors Who Bet Big–and Lost Big by joshspankit on Monday February 15, 2021 @08:12PM (#26149838)

I was surprised that there wasn’t much coverage of the fact that the funds shorted again just at the peak ($480 or something) right as the buys were being halted for retail. That 100% smells like an exploit to me.

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