Selling naked options and naked shorting are not the same thing.
Naked shorting (which is illegal) is the practice of short selling shares that have not been positively determined to be obtainable by the short seller. In the case of GME, the short position was at 140% of the total shares outstanding, so at least 40% of the shorting had to be naked shorting.
These hedge-fund fucks got greedy and instead of getting burned, they're getting bailed out by the brokerage houses.
I agree but that isn't "naked short selling" That is double bad naked short selling.
Naked short selling is usually used when referring to selling calls/puts when you don't have a position in the underlying stock which can create exactly the scenario of over 100% effective short position.
C. Startup funding is generally only accessible to “sophisticated” investors. They are the ones that enjoy the explosive growth that can happen in the early days.
Short-selling has it's place. When the whole world goes mad buying up sub-prime mortgages or tech stocks or tulip bulbs or some other nonsense, shorting provides an opportunity for bears to make a profit on their speculation that the market is grossly over-priced instead of simply "choosing not to buy".
The whole system is rigged to blow bubbles. Short-selling is one of the few ways that realists can pop the bubble and bring the market back to it's senses.
That's not to say that short-selling is always good, but it's not always bad. That they are regularly painted as the bad guys by the global elite should tell you that they provide an important service.
Day traders do it all the time as well. Normally (at least in a bull market) it's a sure way to lose money, unless you have some insight or inside info that makes it a certainty that the stock will drop.
In Biden's America, it made sense - he's fucking the economy, retail is way vulnerable right now, so they short some dinosaurs about to totter off the cliff and die in order to make a few bucks. Reddit's WSB forum catches this, hatches an awesome plan to make zillions by driving a bubble, then manages to pull it off.
Well, some people who offer to lend stocks speculate that people will take it and fail to predict a decline, thus get their stocks back at a higher value.
In essence, all of this is on a voluntary basis - the rigging comes in play when the media plays along and fearmongers generic people into selling or motivates them into buying. Or when there is insider information - or worse: You are a politician and you or your buddies are enacting laws that heavily impact the economy in a way where you can invest before it is known.
All speculators effectively gamble with each other, it's just that the well established, generally richer people have unfair connections and access to knowledge. And worst of all: The law does not apply to them - they can literally do things that are illegal for generic people and consistently get away with it.
Seriously - the USA has a "justice system" that protects the criminals and punishes the innocent. This is not new, it just exacerbated over time.
You can short too. The issue is naked short selling, which is illegal, but they look the other way for Wall Street.
Naked short selling is not illegal, literally anyone can do it. It is a risk that has a fixed maximum upside with unlimited downside though.
seriously wtf is he talking about. Naked selling options is stupid most the time, but definitely not illegal
Selling naked options and naked shorting are not the same thing.
Naked shorting (which is illegal) is the practice of short selling shares that have not been positively determined to be obtainable by the short seller. In the case of GME, the short position was at 140% of the total shares outstanding, so at least 40% of the shorting had to be naked shorting.
These hedge-fund fucks got greedy and instead of getting burned, they're getting bailed out by the brokerage houses.
if you are shorting shares that DO NOT EXIST, then yes, that is illegal.
I agree but that isn't "naked short selling" That is double bad naked short selling.
Naked short selling is usually used when referring to selling calls/puts when you don't have a position in the underlying stock which can create exactly the scenario of over 100% effective short position.
It's called a free market. Participants are free to enter into contracts on voluntary terms. That includes speculation.
Nah, wallstreet isnt a free market holy fucking delusional as fuck.
A. They get bailed out, you don’t
B. Only “sophisticated” investors get access to certain stock.
Lmao
Craigslist is a free market.
C. Startup funding is generally only accessible to “sophisticated” investors. They are the ones that enjoy the explosive growth that can happen in the early days.
I never understood the early morning trading window. Hedge funds can trade for, what, 30 minutes before anyone else?
You have completely misunderstood, and you have embarrassed yourself.
Darkheartisland is not saying that the markets arent manipulated or that the bailouts are fairly distributed.
They are saying that the reason short selling exists is because people are free to enter into contracts of their own choosing.
Craigslist is awesome
https://mises.org/library/dont-sell-short-selling-short
Short-selling has it's place. When the whole world goes mad buying up sub-prime mortgages or tech stocks or tulip bulbs or some other nonsense, shorting provides an opportunity for bears to make a profit on their speculation that the market is grossly over-priced instead of simply "choosing not to buy".
The whole system is rigged to blow bubbles. Short-selling is one of the few ways that realists can pop the bubble and bring the market back to it's senses.
That's not to say that short-selling is always good, but it's not always bad. That they are regularly painted as the bad guys by the global elite should tell you that they provide an important service.
Day traders do it all the time as well. Normally (at least in a bull market) it's a sure way to lose money, unless you have some insight or inside info that makes it a certainty that the stock will drop.
In Biden's America, it made sense - he's fucking the economy, retail is way vulnerable right now, so they short some dinosaurs about to totter off the cliff and die in order to make a few bucks. Reddit's WSB forum catches this, hatches an awesome plan to make zillions by driving a bubble, then manages to pull it off.
Short selling Gamestop was the right call, they just overdid it.
Well, some people who offer to lend stocks speculate that people will take it and fail to predict a decline, thus get their stocks back at a higher value.
In essence, all of this is on a voluntary basis - the rigging comes in play when the media plays along and fearmongers generic people into selling or motivates them into buying. Or when there is insider information - or worse: You are a politician and you or your buddies are enacting laws that heavily impact the economy in a way where you can invest before it is known.
All speculators effectively gamble with each other, it's just that the well established, generally richer people have unfair connections and access to knowledge. And worst of all: The law does not apply to them - they can literally do things that are illegal for generic people and consistently get away with it.
Seriously - the USA has a "justice system" that protects the criminals and punishes the innocent. This is not new, it just exacerbated over time.