What happened :

Hedge Firms went and purchased Put Contracts (short options) on Gamestop Stock GS - thinking the Stock would drop in price over some time.

This is done by 'borrowing stock' from stock holders, and then giving it back to them later, hopefully after the market price drops.

For example - I borrow your Corvette for a month - but I SELL IT IMMEDIATELY - .... the market price for Corvettes drops over 30 days - I buy back the car at a much lower price and give you back your car.... And I KEEP THE DIFFERENCE between the original sales price and the new lower price... this is how shorting works.

BUT in GS...

There are only ~70 million shares of GS even available, to buy on the stockmarket...

The Hedge Funds bought something like 100 million shorts (that is each stock share) ... This can be done by shorting stocks ALREADY SHORTED ONCE... But this leads to a problem.... there are not enough corvettes left for me to buy back one and give to you at the end of the month!

This forced the PRICE of GME UP... ALLOT... and the 'PUT CONTRACTS' MUST BE CLOSED by the closing date... THE HEDGE FUNDS MUST BUY THE STOCK at whatever price it is at... AND RETURN THE SHARES THEY BORROWED. THEY ARE PERSONALLY RESPONSIBLE TOO.... THEY HAVE TO MAKE UP ANY SHORTAGE (the price of the corvette doubles over the month - I have to pay double for the car and give the car back to you... money out of my own pocket!). There is no limit to how high that price can go - so there is not limit to how much money I can lose.

When there is not enough stock to buy up... the price of the stock climbs... This is called a Short Squeeze - it is pretty rare - most stocks get shorted 1-5% all the time... sometimes it goes past 10%... (Tesla last year was at 18%) that is very HIGH... sets off alarm bells - but 140%! that is like suicide.

This would NEVER HAVE HAPPENED if the HEDGE FUNDS did not over buy the Shorts.... THEY DID THIS TO THEMSELVES.

PS - some times these hedge funds will act together to drive down a stock - crushing the company. - only to buy the entire firm at pennies on the dollar, close it down, sell off assets to their friends, and take it to bankruptcy so they owe nothing to no one - They are asshos.

CASH IN YOUR BANK should be Ok - Try to diversify.... buy some silver or gold - buy some ammo :) - A Roth IRA is always a good thing, if not for you - then for your kids.

What happened :

Hedge Firms went and purchased Put Contracts (short options) on Gamestop Stock GS - thinking the Stock would drop in price over some time.

This is done by 'borrowing stock' from stock holders, and then giving it back to them later, hopefully after the market price drops.

For example - I borrow your Corvette for a month - but I SELL IT IMMEDIATELY - .... the market price for Corvettes drops over 30 days - I buy back the car at a much lower price and give you back your car.... And I KEEP THE DIFFERENCE between the original sales price and the new lower price... this is how shorting works.

BUT in GS...

There are only ~70 million shares of GS even available, to buy on the stockmarket...

The Hedge Funds bought something like 100 million shorts (that is each stock share) ... This can be done by shorting stocks ALREADY SHORTED ONCE... But this leads to a problem.... there are not enough corvettes left for me to buy back one and give to you at the end of the month!

This forced the PRICE of GME UP... ALLOT... and the 'PUT CONTRACTS' MUST BE CLOSED by the closing date... THE HEDGE FUNDS MUST BUY THE STOCK at whatever price it is at... AND RETURN THE SHARES THEY BORROWED. THEY ARE PERSONALLY RESPONSIBLE TOO.... THEY HAVE TO MAKE UP ANY SHORTAGE (the price of the corvette doubles over the month - I have to pay double for the car and give the car back to you... money out of my own pocket!). There is no limit to how high that price can go - so there is not limit to how much money I can lose.

When there is not enough stock to buy up... the price of the stock climbs... This is called a Short Squeeze - it is pretty rare - most stocks get shorted 1-5% all the time... sometimes it goes past 10%... (Tesla last year was at 18%) that is very HIGH... sets off alarm bells - but 140%! that is like suicide.

This would NEVER HAVE HAPPENED if the HEDGE FUNDS did not over buy the Shorts.... THEY DID THIS TO THEMSELVES.

PS - some times these hedge funds will act together to drive down a stock - crushing the company. - only to buy the entire firm, close it down, sell off assets to their friends, and take it to bankruptcy - They are asshos.

CASH IN YOUR BANK should be Ok - Try to diversify.... buy some silver or gold - buy some ammo :) - A Roth IRA is always a good thing, if not for you - then for your kids.

What happened :

Hedge Firms went and purchased Put Contracts (short options) on Gamestop Stock GS - thinking the Stock would drop in price over some time.

This is done by 'borrowing stock' from stock holders, and then giving it back to them later, hopefully after the market price drops.

For example - I borrow your Corvette for a month - but I SELL IT IMMEDIATELY - .... the market price for Corvettes drops over 30 days - I buy back the car at a much lower price and give you back your car.... And I KEEP THE DIFFERENCE between the original sales price and the new lower price... this is how shorting works.

BUT in GS...

There are only ~70 million shares of GS even available, to buy on the stockmarket...

The Hedge Funds bought something like 100 million shorts (that is each stock share) ... This can be done by shorting stocks ALREADY SHORTED ONCE... But this leads to a problem.... there are not enough corvettes left for me to buy back one and give to you at the end of the month!

This forced the PRICE of GME UP... ALLOT... and the 'PUT CONTRACTS' MUST BE CLOSED by the closing date... THE HEDGE FUNDS MUST BUY THE STOCK at whatever price it is at... AND RETURN THE SHARES THEY BORROWED. THEY ARE PERSONALLY RESPONSIBLE TOO.... THEY HAVE TO MAKE UP ANY SHORTAGE (the price of the corvette doubles over the month - I have to pay double for the car and give the car back to you... money out of my own pocket!). There is no limit to how high that price can go - so there is not limit to how much money I can lose.

When there is not enough stock to buy up... the price of the stock climbs... This is called a Short Squeeze - it is pretty rare - most stocks get shorted 1-5% all the time... sometimes it goes past 10%... (Tesla last year was at 18%) that is very HIGH... sets off alarm bells - but 140%! that is like suicide.

This would NEVER HAVE HAPPENED if the HEDGE FUNDS did not over buy the Shorts.... THEY DID THIS TO THEMSELVES.

PS - some times these hedge funds will act together to drive down a stock - crushing the company. - only to buy the entire firm, close it down, sell off assets to their friends, and take it to bankruptcy - They are asshos.