XLNT explanation - thanks! So what if the hedge funds DO tank? Are GME shareholders screwed? Where does the "infinity" value come from and who would ever pay it?
If hedge funds tank, there is no requirement for anyone to purchase GME shares, meaning that they are simply long on GameStop with no other indicators for massive price action. That said, the fundamentals behind GameStop are extremely solid, and it’s a good stock in its own right, even without the HF fuckery - they’re poised to become the Amazon of gaming within the next few years
Great explanation of shorting Just want to add that as scandalous as shorting sounds, it is legal. But what was exposed by GME was that they were doing naked shorting, which is NOT legal.
This means, as best as I can explain it that there are X amount of shares for a stock, total and the shorting is done using those. But the greedy bastards just couldnt get enough so they were basically creating shares that dont exist.
XLNT explanation - thanks! So what if the hedge funds DO tank? Are GME shareholders screwed? Where does the "infinity" value come from and who would ever pay it?
If hedge funds tank, there is no requirement for anyone to purchase GME shares, meaning that they are simply long on GameStop with no other indicators for massive price action. That said, the fundamentals behind GameStop are extremely solid, and it’s a good stock in its own right, even without the HF fuckery - they’re poised to become the Amazon of gaming within the next few years
Thanks. So let's say we hit 500k and I want out. When I hit SELL in my new Ameritrade account, exactly who is obliged to buy at that price?
They are obligated to buy at market price, when they are forced to pcover. And when the hedge funds go broke the dtcc is obligated to step in and buy.
Great explanation of shorting Just want to add that as scandalous as shorting sounds, it is legal. But what was exposed by GME was that they were doing naked shorting, which is NOT legal. This means, as best as I can explain it that there are X amount of shares for a stock, total and the shorting is done using those. But the greedy bastards just couldnt get enough so they were basically creating shares that dont exist.
https://www.investopedia.com/terms/n/nakedshorting.asp