Trading the stockmarket (NO Referrals)

Man of Honour
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The T&C's allow them to do it. If you agree to a game with someone who stipulates that they can change the game halfway through, you can't really complain about the rules.
Their T&C's may allow it. But does the SEC? Maybe they do. maybe they don't.

https://www.wsj.com/articles/sec-to-review-brokers-restrictions-on-gamestop-amc-trading-11611932473

Securities regulators said Friday they plan to closely review the actions of some brokerage firms that restricted investors’ ability to trade volatile stocks such as GameStop Corp. this week.
 
Associate
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Where did i mention celebrities and low ranking politicians?

You didn't, I'm just saying that those are the only people mentioning the issues. There's blatant illegal activity happening and the regulator still hasn't stepped in.

Crypto is not a long way off, it is the medicine to all this and its less than 5 years away. That's not a long time

Genuinely interested in why you believe this is so and in what capacity you see it happening? We're in a HODL mindset at the moment, so how does this end? Do enough people eventually get involved that it becomes a viable currency forcing more companies to adopt it?
 
Soldato
Joined
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9,158
Oh, right.

Assets/liabilities.

Companies don't hold all assets in a pot which is accessible, its a long chain of people borrowing from each other. A 30k gamestop price would freeze liquidity in the system causing a huge sell off in the stock market as people scramble for that liquidity.
Perfect, thank you.
 
Man of Honour
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Unlikely you'll find the SEC thinking this is kosher from the WSB crowd.
That's a separate issue. The SEC have said they will review broker actions. I'm sure they will review actions of people on WSB too. But one doesn't preclude the other. In other words, to use a saying from my youth... "Two wrongs don't make a right".
 
Soldato
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In The Sea Of Leveraged Liquidity
You didn't, I'm just saying that those are the only people mentioning the issues. There's blatant illegal activity happening and the regulator still hasn't stepped in.



Genuinely interested in why you believe this is so and in what capacity you see it happening? We're in a HODL mindset at the moment, so how does this end? Do enough people eventually get involved that it becomes a viable currency forcing more companies to adopt it?

Its not about currency, its the distributed system itself and complex power of smart contracts. Its a truth machine. Facebook uses your data, in the future you will be able to own your own data, and you'll be able to choose what to do with it. A DLT system wouldn't have a allowed Melvin to borrow more than the float as well. There is a shed load of stuff it'll do bring power back to the people. Email me and i'll send you some stuff if you want. Don't wanna derail the thread too much
 
Soldato
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Well, the German GME ticket plumetted at opening but looks to have recovered and is now slightly up from Fridays close.

Also seems like a lot of the US people have moved to Fidelity who have reported a huge influx of customers.


Also comical that there's rumours that Hollywood are eyeing up the story. I can only imagine the PC brigade at a movie filled with Retards, Autists and Apes shouting at each other!
 
Soldato
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That's a separate issue. The SEC have said they will review broker actions. I'm sure they will review actions of people on WSB too. But one doesn't preclude the other. In other words, to use a saying from my youth... "Two wrongs don't make a right".

Same for 212 here, although they have made a statement today so it was about capital.

I'm tempted to complain to FOS out of principle (my small loss I made), but I'm not sure I will bother.
 
Soldato
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That's a separate issue. The SEC have said they will review broker actions. I'm sure they will review actions of people on WSB too. But one doesn't preclude the other. In other words, to use a saying from my youth... "Two wrongs don't make a right".

Absolutely they don't. That's why people gleeing for 30k gamestop rubbed me up the wrong way. If the WBS crowd all want a price like that, they are doing the very thing they claim to be fighting. its moronic
 
Caporegime
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This is equities, not crypto la-la land. Fundamentals still apply.

If the business goes bankrupt and ceases to exist, then the shares are worth zero.


No, GME as a business model is crap, it was going to fail anyway, it was just being used by the stock guys to make money and speed up the demise of GME, IMHO..
It could easily have been any other random company..

I'm not talking about gme being what it was. More like it just sits there. Let's say one guy in his house is the registered address. With basically zero cash burn.

The stock price maintains enough momentum that more and more people become. Confident its stable.

I don't think it willll happen.


With all these random pumps, I believe silver, dogecoin etc have all been pumped off back of this, more people will get burned and most likely things will return to normal
 
Soldato
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How does shorting work again, especially if you are shorting over 120% of actual stock, naked shorts I think its called..

Its not the brokers that are actually selling the stock though, they just facilitate. It looks like it came from restricted stock owned by Gamestock owners, which is completely crazy. GME owners should not be allowed to short their own company. I'm completely onboard with that and that needs looking into by the SEC
 
Soldato
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How does shorting work again, especially if you are shorting over 120% of actual stock, naked shorts I think its called..

Simplest explanation I can come up with:

I'll make you a deal, GME is currently around $300 a share. Give me $300 dollars right now and in a month I will give you the share

In the above situation I have until a month from now to buy the share. If I do it right now I will make nothing off of the deal, if GME crashes and burns down to $10 at some point by the end of the month I'm quids in because I can buy the share for you and pocket the other $290. If it explodes up to $1k before I buy the share and it's approaching the end of the month I'm in trouble and looking at having to lose $700 to return your share
 
Soldato
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I'm not talking about gme being what it was. More like it just sits there. Let's say one guy in his house is the registered address. With basically zero cash burn.

The stock price maintains enough momentum that more and more people become. Confident its stable.

I don't think it willll happen.

With all these random pumps, I believe silver, dogecoin etc have all been pumped off back of this, more people will get burned and most likely things will return to normal

You might as well ask what would happen if everyone started to use percy pigs as currency. It's utter nonsense.

Stocks are a slice of a company. If the company has no value, the stocks have no value.
 
Soldato
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Not particularly - I mean if they're invested in the stocks affected then they have the opportunity to sell at a profit or just leave them and they'll probably fall back down to the sort of price range they were in before fairly soon.

Perhaps some pension fund has allocated a small % to one of the hedge funds affected but that's an obvious risk.

If you're rich enough to invest in the affected hedge fund(s) directly then you're rich enough to take a hit if your fund blows up.

re: leverage - no not generally spreadbetting, it's mostly US retail traders and spreadbetting firms/bucket shops have been illegal in the UK for about 100 years now.

Brokers offer leverage directly on US stocks, not massive amounts, say 4:1, you're borrowing money to buy stocks essentially, likewise if you short you borrow stocks and pay a fee to do that too.

The bigger impact perhaps (as mentioned above) is options, a call option is the right but not obligation to buy some stock at a given price (strike price) in the future - if a bunch of people buy options then the person selling them those options will tend to hedge using the underlying instrument... so this causes a bunch of market makers to buy the stock and send the price higher. Out of the money options are those where the strike price is higher than the current market price (so you're buying the right to buy at a higher price than you can currently buy now) these options are cheaper (and get cheaper as you move away from the current price) but if you've bought a bunch of these cheaply and the price moves up they become rather valuable and the person holding the other side of that trade needs to hedge more.... ergo buys more stock... and in doing so the price can go up further and so on... so when these "autists" have bought a **** ton of options at different strikes and the price goes up then the market makers need to buy more actual shares and the price goes up further... and better still the people with shorts see their positon go further and further against them and some of them need to close their position, which they do by.... erm buying more stock and sending the price even higher! :D

Cheers dowie, very insightful post.
I thought spreadbetting was allowed in the UK? IG Index?
Or have I misunderstood something fundamental here?

Regarding the "rich enough" point. I was thinking that perhaps some fund managers in pensions which allocated some of their performance to hedge funds, surely the average joe doesnt have control over that?
 
Caporegime
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I think people are trying to replicate the GME situation with these other stocks.

Isnt Nokia potentially a half decent investment though (regardless off these current meme stocks)?

I can understand that GME's long term future isnt that great, but Nokia has potential surely and isnt at a silly price stock wise at the moment.
 
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