Investment & Investing

Anyone have a link showing how Citadel and Melvin increased on their shorts moments before they told the brokers to stop the retail investors from buying?

Does no one buy the Robinhood excuse that they had to stop GME buying because of some SEC requirements? I know nothing about the relevant regulations but I can totally imagine it given things are so mental. For example, some requirement to hold $x in cash per $y invested or similar (as for a bank)

To put it another way they've got millions of people watching and surely they're lawyered up to the eyeballs. Must know whether or not they're committing a crime and (if they are) that they would never get away with it under these circumstances

Ah, reading a bit more I see it's related to clearing houses. That could explain the earlier comment about how GME (and AMC and KOSS) could start some sort of cascade that could affect different whole (and separate) exchanges.

https://www.trustnodes.com/2021/01/28/clearing-houses-the-too-big-to-bail-vulnerability-revealed-by-gme?PageSpeed=noscript

San Antonio 10-year-old cashes in on GameStop stocks he was gifted 2 years ago

hold ^

are there any bitcoin - alikes i can mine on my pc while i sit here frittering my life away waiting for markets to open and close

Depending what setup you have maybe ETH, bitcoin nae chance now.

... and how ? i should have added.

is it as simple as downloading an app or do you have to be a programmer to get your computer rejigged ?

Ha, thanks. My money attitude is admittedly very poor and looking at rectifying; have around 3 years of maxing out my LISA, then everything just sitting in my current account, dormant. Going to create an emergency fund of some kind, then leaning towards a Lifestrategy 60% fund and dripfeed until God knows when...

There's a lot of people over Reddit saying they've set sell limits to 1,000 too.

I don't know if that's just silly talk thinking it'll get there though.

Not advice, very probably wrong:

Seems there’s actual disinfo. campaigns being rolled out online and in mainstream media. I mean paid by hedge funds, designed by psychologists/sociologists actual disinformation. In all likelihood the pro’s who want to make money on stocks rising don’t need to invest in a rumour mill; the funds that want the stock to tank have every incentive at this point (see CNBC’s Tuesday morning broadcast for pretty blatant lies being peddled).

So, as with most things investing, more research usually leads to better conclusions.

Would you not want something riskier than LS60? Depends how old you are and what you're planning to do with the money

Just a curious (and almost totally ignorant) bystander... can you explain this in simple terms please?

I can try! It's a simplistic view though.

When you sell an option, you give someone the right, but not the obligation, to buy (call) or sell (put) an amount (the nominal) of something (in this case equity / stock) at * or before a certain date (the maturity), at a certain price (the strike).

When they do this, they are exercising the option (or just letting it expire if, for example, the price that are able to buy at is more expensive than the price in the market)

The value of that option is determined by a number of factors - the current cost of the stock, the expected future cost of the stock, the risk free interest rate, and the volatility of the stock, how much it moves up and down over time.

You use the value to determine the price paid, and also to determine how much it is worth day by day - you don't just wait until the option is exercised to discover how much money you have made lost.

What you can also do with the option pricing model is determine your sensitivity to the price factors - how much is the option worth if the stock price moves (this is the delta) or if volatility changes (this is the gamma).

There are other measures, but these are the ones most cared about, particularly in this scenario.

Going back to when you sold the option. Let's say you sold at a strike which was the same as the current option price (let's ignore interest rates). This is called an At The Money option.

The delta of an ATM option is 0.5, near enough (for puts or calls - they are the same at this point - but you have sold a call). What this means is that if the stock price moves up, you will stand to lose money.

But you're an option trader - you trade volatility. You don't want to be worried about the actual stock price, so you hedge your position by buying the stock. In this case, you sold a call, so you need to buy the underlying - and the amount you need to buy is the delta times the nominal.

So end of day 1, you position is

• minus 1 option to sell 100 units of Something for $10 in 12 months
  
• plus 50 units of Something
  
• plus cash for the sale
  
  

Every day, you re-mark your position, and buy / sell the underlying according to changes in stock price & volatility.

Simplistically, this will mean that you are losing the money you were paid as a premium, as you will be buying when the price goes up, and selling when it goes down. As the seller of volatility, you want the price to stay the same (i.e. not be volatile).

What this means is that when the buyer exercises, it doesn't really matter - you've already realised the losses.

Out of the money options are when the strike is miles away from the current or forward price. This makes the current value of the option very low. They are usually used for very specific hedges or insurance, as YOLO trades (cf. Deepfuckingvalue), or someone has spotted that they have been mispriced (cf. my comment about Goldmans)

The principal about portfolio / position management remains though - you're managing the position every day, all day. You don't get surprised by someone cashing in an option 12+ months after they bought it. You say to yourself - the price of this option that I sold is going up and up. I'm going to realise my loss right now and close it out (by buying the same / similar from someone else).

** more common in interest rate & currency options

Wall of text. Sorry.

Market about to open. 2 minutes to it being halted for climbing 10%?

[EDIT] Why did I think it was 2.30pm? It was only 2pm. D'oh.

🚀🚀🚀 Buckle up for another day of looking at charts

I think it's gonna shoot up. But I'm staying well away!

I think that this is a really good, though expensive, book. https://www.macmillanihe.com/page/detail/An-Introduction-to-Global-Financial-Markets/?K=9781137497550

I get it for everyone on my team at work. It is a description of how various markets work, and how they interconnect. It is dip-in-outable.

Not so much about 'what is a good trading strategy' or indeed 'who should I go to for a brokerage account'but good on 'this is how shares work, or options, or whatever'

People on WSB are talking of aiming for $25k per share which I know if ridiculous but I can't help dreaming.

Holy shit can you imagine.

I reckon the first step of the endgame will be GameStop will file a share issue (they bought back 34m of shares in the last year) and soak up a chunk of the money from the shorts looking to close their positions.

30m shares at $300 would be a nice $9bn in the bank for GameStop. (They couldn't do this, it's way too big in one go.)

That's the bit the wsb and other retail investors can't influence and can't stop.

Wouldn't want to be a retail investor holding out for more if that happens as it'll take away a whole load of the fuel for the rocket.

GME is already flying up

The ~$193.60 closing price last night was a typical tactic of the big boys to get the last sale of the day low in order to make people think the stock is tanking and put in market orders to sell.

The real closing price yesterday, if you ignore this underhand tactic, was ~$330.

People on WSB are talking of aiming for $25k per share which I know if ridiculous but I can't help dreaming

If that happened, GME would have a marketcap of $1.6Tn , making it the joint number one in the world company by marketcap with the Saudi Arabian Oil Company.

expensive, book. https://www.macmillanihe.com/page/detail­/An-Introduction-to-Global-Financial-Mar­kets/?K=9781137497550

Werent joking lol