mfw i learning what a hedgefund and shorting is after 4 coffee at 6am
(media.patriots.win)
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The bad in price goes up - you can lose everything you invested and more, because you HAVE to buy stock shares back by the date agreed.
Reason? Stock prices can only go down to zero, but they CAN go up as far as the market says it can.
Shorting says you can make a 100% profit (selling at $x price, buying back for free), or you can get completely wiped out (selling at $x price, but forced to buy back at 100 times $x price).
These hedge funds literally got caught with their shorts down....
Shorting is very, very profitable if you use them to ride the downs of your stocks to the next up cycle.
Shorting can wipe you out if your stock is fairly stagnant, or if unexpected demand comes into play...
Basically, under the current state of matters - hedge fund invested 4.6b, probably expecting to +50% their money by crashing the market.
Instead, they're gonna have to buy in at 27b, assuming they have to buy in at $240/share (itll be higher, likely).
The losses are limitless, should they have to buy in at, say, $550 a share, they'd be $64b deep on their $5b investment
Yes.
Cannot upvote your comment enough.
The big boy club is trying all it can to stave off such a huge loss by trade manipulation.
However, if they cannot operate without such massive intervention a private investor would never see...it's all about control. They shouldn't even be in the game.
I lost 100k and my trading account due to this kind of hedge fund shenanigans that force the market in their preferred direction.
Let them burn and learn...