Don't get George started on the big brokerage houses.
Posted on 02/01/2021 4:35:56 AM PST by NewJerseyJoe
Or a link that explains it. Thank you
Even after watching Trading Places for 30+ years, I still don't understand exactly what they were doing at the stock exchange. 🙁
You can ask, but I’m not telling.
Hedge funds have the legal ability for investors to do things like short sell.
Short selling involves borrowing shares in order to sell them with the expectation they buy the same shares and return them (when the price later drops). This is sometimes good for reasons I don’t understand.
Market prices are influenced by activity, so if a stock is shorted the price can go down. Selling can decrease value.
If you understand this, then you understand how short selling can decrease the value of a stock.
Hedge funds engage in short selling as a balance to stabilize other competing stock they hold for the long term in a portfolio. This is important because what happens with short selling can effect what happens with the entire portfolio of the hedge fund.
So when the price rose suddenly it becomes difficult for the hedge fund to repay the borrowed shares that have gone up in value due to demand. So price goes up, they have to start selling their long-term investments to capitalize, or they have to borrow money from the bank.
That’s a start of what is happening.
Someone can correct me if they know more about it.
The Harvard/Yale/Wharton brie and wine group had their ass kicked by the pizza and beer, High School graduates.....
Yep, silver is the next target for those cheeky boys.
In between that the wall street thieves that been jacking our economy for decades. put in a sell then buy order at the wrong timing using their auto trading preset computers and lost. wallstreetbets figured out the wall street idiots timing exploited it
You and your family then get invited to somebody else's house for Thanksgiving and they already have a turkey. So I offer to take the turkey off your hands, promising to buy you another 20-lb turkey for your Christmas dinner. I then quickly turn around and sell that turkey to my sister-in-law for the $60.
Four weeks later, a 20-pound turkey can be had for $2.50 a pound - $50 total. So I just replaced the turkey I borrowed for a $10 profit.
But let's say that fresh turkeys become scarce and the price on them jumps to $5 a pound. Now I have to pay $100 to replace that turkey and I'm out $40.
Now consider a crazy scenario in which the price of a fresh turkey went to $500 a pound. That's kind of what happened to those hedge fund people who now find themselves in position of having to buy a whole bunch of overpriced fresh turkeys in order to return what they borrowed.
Don't get George started on the big brokerage houses.
Yawn. One day does make a trade. On any given day you could buy some weekly option and be up or down 100% in an an hour. It’s not till you close out the trade that you know what the final score is.
“You have to return those stocks within a month”
Are you sure about the month? I’ve done shorts, but don’t remember having to buy-to-cover for much longer than a month. I do get it with margin calls, and having to pump money in if you’re losing your shirt.
On the other hand my stocks were drifting down after I shorted them, and then they crashed (they were Financials going into 2008), so I was always positive.
Explain it to like you are 5? Ok.
Here is a Tonga dump truck.
Go outside and play while the adults talk.
Would you like to pick a better age of wisdom and maturity?
if you seen the charts (don’t see them now) you can see two large buys a period of time apart. in short sales you have I think three months to buy the stock that you sold.
Yep, in this case the problem is they were playing fast and loose and shorted 140% of the stock. This is why the price is likely to rise a lot when hedge short sellers have to buy sell and borrow and buy and sell the stock again to make up the shorts.
Ben Shapiro Is a controlled-opposition tool of the Deep State paid off by Hedge Fund managers everywhere.
Never trusted that Never Trumper puke.
Yeah, but with the time value of money, and factoring in a high discount rate, a month later your loss may only be $420.00 or so.
Or if they soy crop is good, just buy them a tofurky. Maybe they won’t notice.
Shorting will only drive down they price in the very short term. If it’s a good company the buyers will immediately jump on the lower price and bid it back up.
Overvalued - sellers sell, undervalued - buyers buy.
I wasn’t referring to a single trade but the silver commodity as a whole......
Thanks for the lecture...../s
GME was a one trick pony. They about to find out that the silver market is a totally different animal.
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