Whatever people thought of the bank bailouts from the 2008 crisis the justification given was that of the banks and investment banks failed it would ripple through the system crushing everybody from the top down. Would they be able to use similar justifications to save these hedge funds or is there no argument for that at all?
Seems like we can avoid regulation if short sellers use buy stop orders. That would be the defense against this situation right? That would just limit the profit of the short position
A stop order turns the security into a market order.
You would want a Stop Limit . Or simply a Limit order.
Your original statement would lead to the "next available price" which could be anything. A limit would protect your trade. And you would get that limit price or something better .
The problem is this. If everyone tried to sell at once hahahaha. It would Plummet to $2
There needs to be a "market" so only 1person gets the highest price, then someone gets the next price going down
And the next person goes lower. And when nobody wants to buy the losing stock, it keeps dropping until it matches a price someone is willing to pay.
The problem is gamestop is trading over the intrinsic value of gamestop stock. Based on its fundamentals. So it will never stay that high.
But without the short sellers. In 12 months from.now we will be left with gamestop trading at a price that will be much higher than the price 12 weeks ago. .
So the short sellers held the price down very low with short selling pressures. More selling, kept driving price down...
So the buying and buying drives the price up.
The hedge funds have tools to drag this out using hedging and buying more "time value" kicking the can further down the road.
I believe regulation is inevitable, and might be against hedgefunds with limitations on shorting too much.
But I also think the government should not be involved in a free market.
So the hedge funds should be held accountable for manipulation. But its fuxked up because it is legal.
The only thing that might be borderline illegal. Is a group of people online spreading rumors or false info to drive up a security price via manipulation . That is illegal . To do that for profit. Especially if it is organized.
Whatever people thought of the bank bailouts from the 2008 crisis the justification given was that of the banks and investment banks failed it would ripple through the system crushing everybody from the top down. Would they be able to use similar justifications to save these hedge funds or is there no argument for that at all?
No idea. Never happened before. It is a legal thing. Government should not get involved.
Regulations might come out of this. The industry is corrupt. The government is corrupt.
The biggest donaters to biden is wall street. Wake up.
Nothing will surprise me. Not my problem. I dont like fraud , manipulation, greed
Shorting makes alot of profits from 6%-10% interest daily. Brokerage firms want to make money like anyone. The hedge fund should lose for being Rude.
I think they will suffer and lose.
I think SEC will start to regulate Short selling , with some rules.
Its not over. And I dont have the answer
Seems like we can avoid regulation if short sellers use buy stop orders. That would be the defense against this situation right? That would just limit the profit of the short position
A stop order turns the security into a market order.
You would want a Stop Limit . Or simply a Limit order.
Your original statement would lead to the "next available price" which could be anything. A limit would protect your trade. And you would get that limit price or something better .
The problem is this. If everyone tried to sell at once hahahaha. It would Plummet to $2
There needs to be a "market" so only 1person gets the highest price, then someone gets the next price going down And the next person goes lower. And when nobody wants to buy the losing stock, it keeps dropping until it matches a price someone is willing to pay.
The problem is gamestop is trading over the intrinsic value of gamestop stock. Based on its fundamentals. So it will never stay that high.
But without the short sellers. In 12 months from.now we will be left with gamestop trading at a price that will be much higher than the price 12 weeks ago. .
So the short sellers held the price down very low with short selling pressures. More selling, kept driving price down...
So the buying and buying drives the price up.
The hedge funds have tools to drag this out using hedging and buying more "time value" kicking the can further down the road.
I believe regulation is inevitable, and might be against hedgefunds with limitations on shorting too much.
But I also think the government should not be involved in a free market.
So the hedge funds should be held accountable for manipulation. But its fuxked up because it is legal.
The only thing that might be borderline illegal. Is a group of people online spreading rumors or false info to drive up a security price via manipulation . That is illegal . To do that for profit. Especially if it is organized.