"So You Just 'Raided' Your First Company" - A Letter To Non-Professional Traders
(www.zerohedge.com)
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Yeah but I'm saying that other Hedge Funds and big institutional investors can sell their GME shares for big money and leave retail investors holding the bag. That seems like the big guy winning even if a few (or just 1?) hedge funds lose their shirt.
This may be the case but this is the shot heard around the world, imo. They're not stopping with GME. Also, someone posted that a Rothschild owns APEX, clearing(?) house that shutdown the ability to buy the stock this past week. I noticed the name APEX and thought immediately, predator. Then I thought, wow, "hunters become the hunted".
OooOOoOoooOoo
the part that makes this so damaging is that they were shorting 140% of the stock, not just all of GME stock...more than actually exists.
I understand the risk you're seeing, but there's two things to counter that:
2) The broker's business models relies on them holding these stocks. To not hold them would be even more irresponsible than what the shorters have done. To understand that, you need to understand options.
Lots of people last week bought the "option" to buy GME at prices above what it was currently at (I don't know, let's say $80 because I don't want to fucking check the exact numbers)
Now how much would you sell an option to buy a stock at 110% it's existing price? A sizeable amount to be sure. But what about 4 times it's existing value? You're effectively betting that the stock will quadruple in a week. You see that for peanuts right? Obviously. Well a lot of people had calls in that were for $320 or lower. So as the price begins to rise, and it becomes more likely that the price will end above what the strike price is, you as the broker start to get a little nervous. The broker model for this scenario is to quietly buy up more and more stock as the likelihood that you'll be called rises. This demand for stock from the brokers combined with regular upward pressure forcing the broker's hands is called the gamma squeeze, incidentally, and can be an impetus to pump prices too high for shorters to maintain, FORCING them to capitulate, which is the big squeeze. But that's not what this is really about.
We closed this week above $320 despite every dirty trick in their book and while many of those options are simply being sold and settled for cash, a ton aren't. They are being exercised. The guy who paid a small premium to buy an option at $320 is saying "bitch, here's the $320 x 100, gimme my 100 GME stocks you owe me". Even assuming the Broker already has those stocks because they followed the model and incrementally bought them as the price of the stock rose, as of Friday, they are tapped. the fuck. out. Because remember, while $320 was a big price point, plenty bought options at $250, $200, and much much lower. "Bitch here's my $10,000, better have my 100 GME stocks"
Next week will be another round of calls expiring, and the Brokers will have to replenish their GME position - they hold those stocks to leverage the options they sell. Not only are they never in a position to sell them the way you fear, they don't even have them in the same numbers if at all anymore TO sell the way you fear. This week they'll likely have to buy more up. And these are just the weekly option. Monthlies are every third Friday of the month, we're three weeks away from the February monthly, and I can tell you $300 was not on anyone's minds for that either, so Brokers have to buy up to cover those now too.
They are scared for a fucking reason
* this is not financial advise, I'm illiterate and dictate my words to a small immigrant child who types them in return for fruit loops and head pats.