Posted on 01/28/2021 10:54:41 AM PST by TigerClaws
LONDON (Reuters) - Short-sellers are sitting on estimated losses of $70.87 billion from their short positions in U.S. companies so far this year, data from financial data analytics firm Ortex showed on Thursday.
The hefty losses come as shares of highly-shorted GameStop jumped more than 1,000% in the past week without a clear business reason, forcing short-sellers to buy back into the stock to cover potential losses -- defined as a short-squeeze -- while retail investors then piled in to benefit from the surge.
Chasing shorted companies became a trend among retail traders, rippling across U.S. markets and Europe. Ortex data showed that as of Wednesday, there were loss-making short positions on more than 5,000 U.S. firms.
Its data also showed that estimated losses from shorting GameStop at $1.03 billion year-to-date, while those shorting Bed, Bath & Beyond were looking at a $600 million loss.
Ortex said the figures are based on the change in trading prices between the start of January to Wednesday’s close, and the number of short positions. The company sources short interest data from submissions by agent lenders, prime brokers, and broker-dealers.
(Excerpt) Read more at reuters.com ...
Sooooo sad :(((((
A member here on FR posted this:
The Hedge Funds are in trouble. Not just a little financial trouble, but a lot of legal trouble.
What triggered the buying of Gamestop was people on Reddit noticing that short sellers had sold 140% of the actual amount of Gamestop stock. The hedge funds not only sold stock they didn’t have (Naked Short Selling, which is illegal, at least when mere mortals do it), but 40% more than exists.
This is why many brokerage houses have halted retail investers ability to buy Gamestop
Much of the volume of Gamestop trading involves stocks which do not actually exist. The trades cannot be cleared. The trades cannot be settled by the clearing firms..
And once this becomes painfully obvious to the general public, too many uncomfortable questions are going to be asked.
What is Clearing?
Clearing is the procedure by which financial trades settle - that is, the correct and timely transfer of funds to the seller and securities to the buyer. Often with clearing, a specialized organization acts as intermediary and assumes the role of tacit buyer and seller in a transaction, to reconcile orders between transacting parties. Clearing is necessary for the matching of all buy and sell orders in the market. It provides smoother and more efficient markets as parties can make transfers to the clearing corporation rather than to each individual party with whom they transact
I don’t understand how this is happening when all shorts are legally required to be covered by owning the stock or having bought an option.
As someone aptly stated last night on FR, “Naked shorts are illegal.”
So, if Hedge Funds short companies that is okay. But, if Retail Investors jump in to catch the companies in their shorting, they are evil white supremicists?
Good.
Screw short sellers. Vile vultures, may they lose everything.
Does China short-sell?
Asking for a friend.
At least 40% of that 140% was an illegal transaction.
When you own the regulatory agencies, the prosecutors, and the judges, there is no such thing as “illegal”.
Matt Ford
@fordm
A source on Capitol Hill says House Financial Services is getting flooded with calls about GameStop and Robinhood by Reddit users who tracked down the relevant committee.
Dave Portnoy going off on Twitter as well calling for jail sentences.
At least 40% of that 140% was an illegal transaction.
***
Is the FBI going to pay for billboards to be put up across the nation to find the criminals?
This whole episode shows that you have a better chance of winning at the dog races than bucking the big boys on Wall Street.
Perhaps someone more knowledgeable can explain this to me. The big boys expected/wanted GameStop‘s stock to go down, so they sold it short.
Wouldn’t it have been safer to just buy put options? I’m sure I’m missing something here.
Twitter has various whistleblowers saying white house called the apps and coordinated shitting down shorted buys.
Bed Bath and Beyond stopped carrying My Pillow. They deserved to get shorted.
One thing we know for sure. The Big Money will come out of this OK. The government will see to that.
The little guys are not allowed to play the same games the big guys do. And they will be taught a lesson.
Jail sentences for whom?
Justin Kan
@justinkan
·
1h
Just got a tip that Citadel reloaded their shorts before they told Robinhood to stop trading $GME.
If this is true, Ken Griffin and the Robinhood founders should be in jail.
This is class warfare.
https://twitter.com/justinkan/status/1354853920762253315
You guys know all this — IF TRUE — is very illegal?
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