If it works out, the short sellers will be stuck holding worthless stock. With a short sell position, they've sold virtual stock already and have to buy it back later for whatever price it ends up at. Since the short sellers are on the fence for about 120% of the stock that actually exists, squeezing them by buying in is a good bet. The only way it goes wrong is if the investors lose confidence before the short sellers are forced to buy. The meme status has bolstered confidence to extreme heights, so we're witnessing something crazy now. It's a revolt against some big players and it seems to working amazing. Of course, never bet what you can't afford to lose.
So like going to a car lot, selling their car to them for $50,000 and then taking it and driving it for a couple of years then go and return it, but actually buy it at that time for $10,000?
So you've made $40,000 profit for getting to drive a car?
But if somehow the car value went up to $100,000 when you returned it, you would have to them buy it for that $100,000 when you returned it and have a loss of $50,000?
If it works out, the short sellers will be stuck holding worthless stock. With a short sell position, they've sold virtual stock already and have to buy it back later for whatever price it ends up at. Since the short sellers are on the fence for about 120% of the stock that actually exists, squeezing them by buying in is a good bet. The only way it goes wrong is if the investors lose confidence before the short sellers are forced to buy. The meme status has bolstered confidence to extreme heights, so we're witnessing something crazy now. It's a revolt against some big players and it seems to working amazing. Of course, never bet what you can't afford to lose.
So short selling is selling it before you buy it?
So like going to a car lot, selling their car to them for $50,000 and then taking it and driving it for a couple of years then go and return it, but actually buy it at that time for $10,000?
So you've made $40,000 profit for getting to drive a car?
But if somehow the car value went up to $100,000 when you returned it, you would have to them buy it for that $100,000 when you returned it and have a loss of $50,000?
Am I understanding short selling correctly?
Yep.
but lets say the real vallue of gamestock is 1 dollar a share right!
so now i go in i buy 300 dollar a share! and this short squeeze ends! i go to bed wake up tommorow and my 1 share is 1 dollar now i lost 299
some people will buy it at the top! 300 so far doesnt seem like the top! but the top might come at 1000 at 1500
who knows top might come at 500
that is what i am saying
and now sec talking about 30 day cool down!
i understand this is a big F U to the big hedgefunds who might go bankrupt