Posted on 01/26/2021 6:54:35 PM PST by wrrock
“The “Big Short” Guy is going to crash the market again, like he did before the great recession.”
Michael Burry (Big Short guy) didn’t cause the 2008 bubble to collapse.
He simply recognized that there was a bubble and positioned his firm to profit when the bubble collapsed. He used credit default swaps or something similar.
You don’t have to buy much to join the party. A share or two won’t cost you much. Or wouldn’t have. It’s already at $209 after hours.
The wallstreetbets ‘tards have a target price of $420.69 and they may well hit it. Two more hedge funds are helping their short pal Melvin Capital stay solvent but the Joes are hanging tough and not breaking ranks. An epic battle. A better show than the Superbowl.
“Gov’t and Fed creates all these crazy debt instruments,”
The private market creates them, not the gov’t nor the Fed. The gov’t and Fed sometimes have regulatory power over markets and sometimes they don’t. Congress prohibited regulation of some of the derivatives that resulted in the housing bubble.
“How can you have short interest higher than 100%?”
Through illegal naked shorting.
"Bulls make money. Bears make money. Hogs get slaughtered." You never go broke taking profits.
Of course you are correct, but NBC news still blames him for the Crash. Its the Democrat party line to blame him for the crash so people don’t look to close at garbage he saw and capitalized on.
I was just saying the media/democrats will use him as the example of “Wall Street Greed” and not the too big to fail corporations selling the garbage, just like the last time.
Of course you are correct, but NBC news still blames him for the Crash. Its the Democrat party line to blame him for the crash so people don’t look to close at garbage he saw and capitalized on.
I was just saying the media/democrats will use him as the example of “Wall Street Greed” and not the too big to fail corporations selling the garbage, just like the last time.
8ts not the average Jos, these are billionaires vs billionaires. Joe’s don’t move the market.
You’re right, private market did create the crazy debt instruments. That was sloppy. In the end, what I’m really bitching about is the Fed/Gov’t taking away the risk of these debt instruments. Especially now with the Treasury SPV managed by Blackrock of all companies. Then with the backdrop of the influence of mis-priced debt in the system, people bitch about speculators and short sellers looking for a quick buck whether from a wild swing up or down. I’d expect that behavior with this system.
It’s over $230 this morning. Best of show today.
I'd normally agree. But the risk/reward here isn't as great as usual--look at the put premiums. They are astronomical!
The implied short term volatility is 300 to 600% (not a typo), highest at the shorter maturities. So, you can't make a large profit when the stock collapses.
Game stop is crazy right now. Last April my husband got me to sign up for a Robin hood account. The free stock I got for signing up was game stop. Sold my one share yesterday for $148.50. I was asking him why it was going crazy and he mentioned the short positions just like in this article. Knew right then it’s not going to last much longer so sold my one share. Not a bad profit for a free stock!
If I own in the money calls I could short the stock at any thing over that because I own the right to buy the stock at a fixed price.
Not exactly naked
More like .... scantily clad
Most smart short sellers cover their behind with a hand full of out of the money calls, limits the exposure to something like this. They can ride till xpy , then make the decision to move there strike or bail.
If their calls are in the money they could short again at the higher price and keep going.
Expiration dates and margin calls .. like gas on a fire.
You do know a stop doesn't guarantee a trade
. A trailing market stop could see you at at the absolute bottom.
A trailing limit could leave you holding the stock after the storm.
Yes, that has happened in an extreme volatile market.
Well, this time did average Joes. A LOT of them on stock forums starting in reddit. Lightning does strike every once in a while. read about a person paying off their student loan when it got high enough.
“How can you have short interest higher than 100%?”
Through illegal naked shorting.”
With the short being desperate to get ahold of some shares, this is a great opportunity for the company to issue new stocks at ridiculous prices. It would also pretty much do away with the short squeeze.
Except that it would be double that if you had waited one day! Still, much more than I made.
I KNOW!! I was watching it while on my treadmill this morning and couldn’t believe it. Thought about (and still thinking about) buying a put option way out of the money, just to see if I can’t make a little more, but I get cautious about getting too greedy.
Good point. That’s something like a “synthetic long” position. Probably a lot of that going on with Gamestop.
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