Investment & Investing

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georgert in reply to @Greenbank

The short sellers with the real money (and no pressure from the broker to cover the margin) will just hold out longer as they will eventually be able to cover their positions for a much smaller amount, and possibly even back as a profit. (For example, if they shorted it at $20 originally, drove it down to $3 and got greedy looking for more, they only need to get it back down to under $20 and they can cover their options and still make some money.)

What's real money? One of the biggest shorters (Melvin Capital) already got loaned almost 3bn to cover their losses / margin. And they might not have even closed their positions yet.

I think it's a long way from over yet.

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ElGonzo in reply to @georgert

I think it's a long way from over yet.

Agreed, this has legs. There's no way Melvin have closed their positions, CNBC's report pre market open that they had screams of collusion, no way Melvin could close out their short just like that. On Bloomberg TV they showed that today there were twice as many puts than calls, so the shorts are trying to short their way out of it. If retail investors hold and just simply don't sell, this can run in a rising price/hedging feedback loop until Melvin is buried and then someone still has to be liable to close those short positions... Does that land at the broker's door?
This isn't a pump and dump so SEC can't cry foul, it's a legit squeeze. If you're mad enough to short over 140% of the float then that's on you. Shorting is big risk, big reward. Well Reddit is trying to ram this metric shit tonne of risk down the HFs throats.

I've got no skin in this, just enjoying watching it unfold from the sidelines... MJEatingPopcorn.gif

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georgert in reply to @ElGonzo

👏👏👏

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