Author Topic: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks  (Read 18068 times)

RWD

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #400 on: February 10, 2021, 07:37:23 AM »
The thing about internet memes is they peak once and never return.

Yeah, there's a cool video about that.

Very informative video, thanks for sharing

mistymoney

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #401 on: February 10, 2021, 07:54:30 AM »
For those cheering for more Game Stop drama, stay tuned for Friday.  When GME trade volume went from 57M to 197M, that was a Friday.  Last week the stock dropped in price every day... except Friday.

GME call options expire every Friday, which is probably the connection.  The open interest in $800 strike calls that expire Friday (2/12) is now 18k.  Normally that hints at an attack on Friday, but these calls are very cheap.  The entire 18k calls are only worth $150k right now, while last week's attack had $2 million worth.

Payday?

MustacheAndaHalf

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #402 on: February 10, 2021, 08:15:22 AM »
Payday?

The answer is one sentence past the one you highlighted.

Last week the stock dropped in price every day... except Friday.

GME call options expire every Friday, which is probably the connection.


The thing about internet memes is they peak once and never return.
Yeah, there's a cool video about that.
Very informative video, thanks for sharing
In my opinion, too many people are following that approach with GameStop shares.

ChpBstrd

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #403 on: February 10, 2021, 08:19:11 AM »
https://finance.yahoo.com/news/gamestop-amc-reddit-investing-213609595.html

28% of Americans bought a meme stock in January (guilty). Probably 27% lost money (guilty).

StashingAway

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #404 on: February 10, 2021, 08:35:58 AM »
https://finance.yahoo.com/news/gamestop-amc-reddit-investing-213609595.html

28% of Americans bought a meme stock in January (guilty). Probably 27% lost money (guilty).

That's insane, and I think speaks to the most interesting part of all of this. It's not the details of the squeeze or how much Robinhood should be faulted or how much of it was a pump and dump.

I suspect at the end this will all boil down to "A person is smart, but people are dumb",

It will definitely be interesting to see if this was just a blip or a long term trend.

Also guilty.

solon

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #405 on: February 10, 2021, 09:09:01 AM »
The thing about internet memes is they peak once and never return.

Yeah, there's a cool video about that.

Dang it! Fell for it.

ChpBstrd

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #406 on: February 10, 2021, 09:09:46 AM »
https://finance.yahoo.com/news/gamestop-amc-reddit-investing-213609595.html

28% of Americans bought a meme stock in January (guilty). Probably 27% lost money (guilty).

That's insane, and I think speaks to the most interesting part of all of this. It's not the details of the squeeze or how much Robinhood should be faulted or how much of it was a pump and dump.

I suspect at the end this will all boil down to "A person is smart, but people are dumb",

It will definitely be interesting to see if this was just a blip or a long term trend.

Also guilty.

Theme: It costs money to use social media.

MustacheAndaHalf

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #407 on: February 10, 2021, 09:10:34 AM »
JP Morgan came to the opposite conclusion based on market data.  But there could be a way for both to be true: if millions of Americans bought only 1-2 shares.
https://www.cnbc.com/2021/02/05/gamestop-mania-may-not-have-been-the-retail-trader-rebellion-it-was-perceived-to-be-data-shows.html

Not guilty - I made money in GME stock.

And my GME call options?  "100%, absolutely not guilty", to quote a famous murder suspect.  Seems appropriate for making a killing in an investment, when the trial is ongoing, and I expect to get away with it.

frugalnacho

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #408 on: February 10, 2021, 09:15:00 AM »
Most people want in on a bubble, even if they know it's a bubble.  If tulip prices doubled every day for the next month, I would probably buy some overpriced tulips in anticipation of selling to an even greater fool.  I would buy into it knowing full well it was an irrational bubble, and hope to cash out and not get left holding the bag.  I probably wouldn't YOLO into it like the WSB crowd though. 

The people that bought in at $4 look like geniuses.  Even the people that bought in at $250 and sold at the peak look like geniuses.  The people that bought in at $350 not so much. 

The most compelling argument for holding gamestop, IMO, from my favorite stock analyst:

Quote from: Mr. Lightyear
To Infinity...and beyond!

ChpBstrd

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #409 on: February 10, 2021, 09:43:59 AM »
Short interest update: It's 88.6% of shares outstanding.

https://www.marketbeat.com/stocks/NYSE/GME/short-interest/

This makes a Friday attack more likely.

frugalnacho

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #410 on: February 10, 2021, 09:55:21 AM »
Short interest update: It's 88.6% of shares outstanding.

https://www.marketbeat.com/stocks/NYSE/GME/short-interest/

This makes a Friday attack more likely.

Here we go boys. 💎💎💎💎💎💎🚀🚀🚀🚀🚀🚀🚀🚀


mistymoney

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #411 on: February 10, 2021, 11:05:19 AM »
Short interest update: It's 88.6% of shares outstanding.

https://www.marketbeat.com/stocks/NYSE/GME/short-interest/

This makes a Friday attack more likely.

td told me this:
Short Interest (% of float 01/29/21)42.24

and what do you mean by an attack? from which side? with what objective?

v8rx7guy

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #412 on: February 10, 2021, 11:15:07 AM »
Short interest update: It's 88.6% of shares outstanding.

https://www.marketbeat.com/stocks/NYSE/GME/short-interest/

This makes a Friday attack more likely.

You SOB, I'm in.

Psychstache

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #413 on: February 10, 2021, 12:35:23 PM »
The thing about internet memes is they peak once and never return.

Ice bucket challenge anyone?

Yeah, we've moved on to Cat Lawyer. I think the squeeze ain't comin' no more.

StashingAway

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #414 on: February 10, 2021, 01:08:17 PM »
Short interest update: It's 88.6% of shares outstanding.

https://www.marketbeat.com/stocks/NYSE/GME/short-interest/

This makes a Friday attack more likely.

You SOB, I'm in.

Let's GO!!

v8rx7guy

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marty998

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #416 on: February 11, 2021, 01:39:41 PM »
The thing about internet memes is they peak once and never return.

Yeah, there's a cool video about that.

Dang it! Fell for it.

Not gonna click, but I’m guessing you lot are never gonna let me down

ender

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #417 on: February 12, 2021, 06:31:21 AM »
Ugh...

https://www.cnn.com/2021/02/11/investing/robinhood-lawsuit-suicide-alex-kearns/index.html

Talk about a sensationalist article capitalizing on the recent events.

Those events happened... last year, but the article makes no mention of the timeframe until 2/3 of the way through.

v8rx7guy

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #418 on: February 12, 2021, 08:18:17 AM »
Ugh...

https://www.cnn.com/2021/02/11/investing/robinhood-lawsuit-suicide-alex-kearns/index.html

Talk about a sensationalist article capitalizing on the recent events.

Those events happened... last year, but the article makes no mention of the timeframe until 2/3 of the way through.

Oh wow, did not even catch that.  CNN pumping an old story to get clicks... for shame.

jim555

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #419 on: February 12, 2021, 10:20:16 AM »
Where is that squeeze?  Any day now...

ChpBstrd

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #420 on: February 12, 2021, 11:18:43 AM »
Ugh...

https://www.cnn.com/2021/02/11/investing/robinhood-lawsuit-suicide-alex-kearns/index.html

Talk about a sensationalist article capitalizing on the recent events.

Those events happened... last year, but the article makes no mention of the timeframe until 2/3 of the way through.

Oh wow, did not even catch that.  CNN pumping an old story to get clicks... for shame.

IDK, they're telling a story that played out over months. The suicide last summer, the lawsuit at some point in between, and then the interviews that presumably occurred recently. Maybe when the next update happens it'll again be updated.

Sibley

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #421 on: February 17, 2021, 10:20:11 AM »
Since I'm way too lazy to actually try to figure it out... I saw a post on Reddit which was talking about GME failing to complete, or something based on some monthly report that had been released or whatever. Can someone translate and explain whatever they were talking about, including if they were right/wrong?

MustacheAndaHalf

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #422 on: February 17, 2021, 11:13:05 AM »
Since I'm way too lazy to actually try to figure it out... I saw a post on Reddit which was talking about GME failing to complete, or something based on some monthly report that had been released or whatever. Can someone translate and explain whatever they were talking about, including if they were right/wrong?
I'm not sure what people know, so I'll explain shorting first.  If you short GME stock, your account shows a negative number of shares, and your broker credits your account with the sale price.  But to make this work, your broker has to locate shares it can borrow, which it then sells on your behalf.  To compensate the lender, interest is paid while the shares are borrowed... and the shares are borrowed until you close your short position (if you had -5 GME, you need to buy 5 GME to bring your number of shares back to zero).

From what I read on reddit (which looked authentic but I haven't verified), market makers can do the same thing, but with more leeway on finding shares.  You have a buy order, and the market maker can sell you shares that it doesn't have.  The clock starts ticking, and the market maker has 3 weeks to locate shares.  In the event they have a "failure to complete" the transaction, it means they can't locate shares.  They effectively created shares out of thin air that didn't exist, and never matched the fake negative shares with actual shares.

Apparently everyone besides market makers (hedge funds, brokers, etc) have just 3 days to locate shares to sell short.  My guess is the "failure to complete" is mostly hedge funds selling short but unable to find shares.  If you're WSB, you have to come up with cash to buy shares... but the hedge funds can simply create shares that don't exist.  That's probably what WSB is calling unfair in their buying attack on GME stock.

trollwithamustache

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #423 on: February 17, 2021, 12:31:59 PM »
Since I'm way too lazy to actually try to figure it out... I saw a post on Reddit which was talking about GME failing to complete, or something based on some monthly report that had been released or whatever. Can someone translate and explain whatever they were talking about, including if they were right/wrong?
I'm not sure what people know, so I'll explain shorting first.  If you short GME stock, your account shows a negative number of shares, and your broker credits your account with the sale price.  But to make this work, your broker has to locate shares it can borrow, which it then sells on your behalf.  To compensate the lender, interest is paid while the shares are borrowed... and the shares are borrowed until you close your short position (if you had -5 GME, you need to buy 5 GME to bring your number of shares back to zero).

From what I read on reddit (which looked authentic but I haven't verified), market makers can do the same thing, but with more leeway on finding shares.  You have a buy order, and the market maker can sell you shares that it doesn't have.  The clock starts ticking, and the market maker has 3 weeks to locate shares.  In the event they have a "failure to complete" the transaction, it means they can't locate shares.  They effectively created shares out of thin air that didn't exist, and never matched the fake negative shares with actual shares.

Apparently everyone besides market makers (hedge funds, brokers, etc) have just 3 days to locate shares to sell short.  My guess is the "failure to complete" is mostly hedge funds selling short but unable to find shares.  If you're WSB, you have to come up with cash to buy shares... but the hedge funds can simply create shares that don't exist.  That's probably what WSB is calling unfair in their buying attack on GME stock.

There have been a huge amount of failures to deliver with GME...  the SEC posts the failure to deliver data 2x a month, so its for a couple weeks ago. There are lots of failures to deliver, I've pulled the raw data for the last couple sets.... like 65k of failed to delivers. The data is cumulative, so for most stocks most of the time, failure to deliver is a net balance of zero. Sometimes 1-2k shares pop up and go away the next day. occasionally  a stock may have like 100k share spike in Failure to deliver, that then goes away the next day. The data is for all publicly traded companies in the US, so a lot of companies and none of them maintain a failed to deliver balance, it appears and then gets resolved.

GME has had a failure to deliver balance daily for at least the last 4 weeks... at one point as high as 600k shares failed to deliver.  thats despite all the time a market maker or clearing firm has to find the shares if they are covering an oops!

jim555

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #424 on: February 17, 2021, 12:56:23 PM »
DFV is getting sued by someone who lost on an options trade.

https://www.scribd.com/document/494916062/Iovin-v-Gill

dandarc

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #425 on: February 17, 2021, 01:15:06 PM »
DFV is getting sued by someone who lost on an options trade.

https://www.scribd.com/document/494916062/Iovin-v-Gill
Didn't realize this person was licensed - there might be some real consequences for running a very successful pump-and-dump this way. Licensed broker has a different set of rules than just any random person on the internet.

bwall

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #426 on: February 17, 2021, 01:22:00 PM »
DFV is getting sued by someone who lost on an options trade.

https://www.scribd.com/document/494916062/Iovin-v-Gill

He's only upset b/c he got his ass handed to him.

Presumably they would've have sued if they hadn't lost money.

For me the funniest part is that they quote Roaring Kitty from his youtube channel:

"In his videos, Gill adorns a headband and cat-themed clothing items. Despite his disarming appearance, Gill’s videos reveal that he was a highly sophisticated and calculated investor—consistent with his numerous financial certifications. For example, in a nearly two-hour YouTube video dated July 13, 2020, Gill educates his viewers with an array of financial spreadsheets containing hundreds of metrics and financial calculations Gill purportedly relies upon prior to making an investment."

What they left out: Our client neglected to view the video before SELLING 2000 NAKED CALLS AT $100 STRIKE ON JAN. 26 WITH AN EXPIRATION DATE OF JANUARY 19 (SIC). caps mine. Sorry for yelling. 

Turns out he had to cover between $300 and $315. So, he lost around $40m. In one week.

How was your day at the office, honey?
 

Wrenchturner

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #427 on: February 17, 2021, 02:44:44 PM »
DFV is getting sued by someone who lost on an options trade.

https://www.scribd.com/document/494916062/Iovin-v-Gill
Didn't realize this person was licensed - there might be some real consequences for running a very successful pump-and-dump this way. Licensed broker has a different set of rules than just any random person on the internet.

This wasn't a pump and dump.  Roaring Kitty/DeepFuckingValue isn't an idiot.  Read his reddit posts, he posted updates every few weeks on his positions.  And his first posts outline his value assessment.  GME was underpriced, he maintained a position, and other people decided they liked the stock too.  Or they decided shorts were too aggressive.  Doesn't matter, there is no manipulation here.


solon

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #428 on: February 17, 2021, 03:18:18 PM »
Since I'm way too lazy to actually try to figure it out... I saw a post on Reddit which was talking about GME failing to complete, or something based on some monthly report that had been released or whatever. Can someone translate and explain whatever they were talking about, including if they were right/wrong?
I'm not sure what people know, so I'll explain shorting first.  If you short GME stock, your account shows a negative number of shares, and your broker credits your account with the sale price.  But to make this work, your broker has to locate shares it can borrow, which it then sells on your behalf.  To compensate the lender, interest is paid while the shares are borrowed... and the shares are borrowed until you close your short position (if you had -5 GME, you need to buy 5 GME to bring your number of shares back to zero).

From what I read on reddit (which looked authentic but I haven't verified), market makers can do the same thing, but with more leeway on finding shares.  You have a buy order, and the market maker can sell you shares that it doesn't have.  The clock starts ticking, and the market maker has 3 weeks to locate shares.  In the event they have a "failure to complete" the transaction, it means they can't locate shares.  They effectively created shares out of thin air that didn't exist, and never matched the fake negative shares with actual shares.

Apparently everyone besides market makers (hedge funds, brokers, etc) have just 3 days to locate shares to sell short.  My guess is the "failure to complete" is mostly hedge funds selling short but unable to find shares.  If you're WSB, you have to come up with cash to buy shares... but the hedge funds can simply create shares that don't exist.  That's probably what WSB is calling unfair in their buying attack on GME stock.

There have been a huge amount of failures to deliver with GME...  the SEC posts the failure to deliver data 2x a month, so its for a couple weeks ago. There are lots of failures to deliver, I've pulled the raw data for the last couple sets.... like 65k of failed to delivers. The data is cumulative, so for most stocks most of the time, failure to deliver is a net balance of zero. Sometimes 1-2k shares pop up and go away the next day. occasionally  a stock may have like 100k share spike in Failure to deliver, that then goes away the next day. The data is for all publicly traded companies in the US, so a lot of companies and none of them maintain a failed to deliver balance, it appears and then gets resolved.

GME has had a failure to deliver balance daily for at least the last 4 weeks... at one point as high as 600k shares failed to deliver.  thats despite all the time a market maker or clearing firm has to find the shares if they are covering an oops!

Is there a penalty for failing to deliver? If not, that seems like a pretty glaring loophole. Or did I miss it somewhere?

jinga nation

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #429 on: February 17, 2021, 03:32:44 PM »
DFV is getting sued by someone who lost on an options trade.

https://www.scribd.com/document/494916062/Iovin-v-Gill
Didn't realize this person was licensed - there might be some real consequences for running a very successful pump-and-dump this way. Licensed broker has a different set of rules than just any random person on the internet.

This wasn't a pump and dump.  Roaring Kitty/DeepFuckingValue isn't an idiot.  Read his reddit posts, he posted updates every few weeks on his positions.  And his first posts outline his value assessment.  GME was underpriced, he maintained a position, and other people decided they liked the stock too.  Or they decided shorts were too aggressive.  Doesn't matter, there is no manipulation here.

DFV testified today: https://docs.house.gov/meetings/BA/BA00/20210218/111207/HHRG-117-BA00-Wstate-GillK-20210218.pdf

Worth a read.

Diamond Hands!

jinga nation

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #430 on: February 17, 2021, 03:37:03 PM »
Since I'm way too lazy to actually try to figure it out... I saw a post on Reddit which was talking about GME failing to complete, or something based on some monthly report that had been released or whatever. Can someone translate and explain whatever they were talking about, including if they were right/wrong?
I'm not sure what people know, so I'll explain shorting first.  If you short GME stock, your account shows a negative number of shares, and your broker credits your account with the sale price.  But to make this work, your broker has to locate shares it can borrow, which it then sells on your behalf.  To compensate the lender, interest is paid while the shares are borrowed... and the shares are borrowed until you close your short position (if you had -5 GME, you need to buy 5 GME to bring your number of shares back to zero).

From what I read on reddit (which looked authentic but I haven't verified), market makers can do the same thing, but with more leeway on finding shares.  You have a buy order, and the market maker can sell you shares that it doesn't have.  The clock starts ticking, and the market maker has 3 weeks to locate shares.  In the event they have a "failure to complete" the transaction, it means they can't locate shares.  They effectively created shares out of thin air that didn't exist, and never matched the fake negative shares with actual shares.

Apparently everyone besides market makers (hedge funds, brokers, etc) have just 3 days to locate shares to sell short.  My guess is the "failure to complete" is mostly hedge funds selling short but unable to find shares.  If you're WSB, you have to come up with cash to buy shares... but the hedge funds can simply create shares that don't exist.  That's probably what WSB is calling unfair in their buying attack on GME stock.

There have been a huge amount of failures to deliver with GME...  the SEC posts the failure to deliver data 2x a month, so its for a couple weeks ago. There are lots of failures to deliver, I've pulled the raw data for the last couple sets.... like 65k of failed to delivers. The data is cumulative, so for most stocks most of the time, failure to deliver is a net balance of zero. Sometimes 1-2k shares pop up and go away the next day. occasionally  a stock may have like 100k share spike in Failure to deliver, that then goes away the next day. The data is for all publicly traded companies in the US, so a lot of companies and none of them maintain a failed to deliver balance, it appears and then gets resolved.

GME has had a failure to deliver balance daily for at least the last 4 weeks... at one point as high as 600k shares failed to deliver.  thats despite all the time a market maker or clearing firm has to find the shares if they are covering an oops!

Is there a penalty for failing to deliver? If not, that seems like a pretty glaring loophole. Or did I miss it somewhere?

https://ca.finance.yahoo.com/news/sec-data-show-359-million-144445943.html

The SEC has been a toothless croc for a long time. Looks deadly, wears dentures, no holding strength in the jaw. They can't enforce their own FTD rules, if there were any.
SEC now stands for Suck Elon's C-appendage.

bwall

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #431 on: February 17, 2021, 04:49:28 PM »
DFV is getting sued by someone who lost on an options trade.

https://www.scribd.com/document/494916062/Iovin-v-Gill
Didn't realize this person was licensed - there might be some real consequences for running a very successful pump-and-dump this way. Licensed broker has a different set of rules than just any random person on the internet.

This wasn't a pump and dump.  Roaring Kitty/DeepFuckingValue isn't an idiot.  Read his reddit posts, he posted updates every few weeks on his positions.  And his first posts outline his value assessment.  GME was underpriced, he maintained a position, and other people decided they liked the stock too.  Or they decided shorts were too aggressive.  Doesn't matter, there is no manipulation here.

Agree. That plaintiff is attempting to hold someone else responsible for his failed strategy is ludicrous. Why didn't plaintiff sell Puts? Or limit his exposure by buying calls at a higher strike price? Or an expiration of say, Feb. 19? Or a later expiration date?

Sour grapes.

MustacheAndaHalf

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #432 on: February 18, 2021, 08:26:16 AM »
Today's hearings are focused on GameStop stock, but AMC accompanied GameStop on wild price swings.  It's actually more volatile right now than GME, which means higher liquidity requirements for selling options.  So I'd like to exit my lowest strike AMC position, to free up liquidity for better investments.

I notice 200+ contracts bidding $1.65.  Okay, I want to get out, I'm willing to go higher... I bid $1.75 ... and seconds later, 200+ contracts follow me!  It's like I'm leading a little herd of bots around.  I think it's hilarious.  When I cancel that order, they all agree on $1.65 again.  Then I place another $1.75, and they come back.  Instead of canceling this time, I changed my order to $1.50, and they all just sat around at $1.75, keeping each other company.

dandarc

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #433 on: February 18, 2021, 09:06:03 AM »
I'd point out this person's biggest bets were call options that expired in January and will expire in April. These investments are inconsistent with the "under valued" narrative pushed in the remarks - GME being undervalued is not something a reasonable person would be betting on correcting on a 3 to 6 month timeline.

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #434 on: February 18, 2021, 09:58:53 AM »
Since I'm way too lazy to actually try to figure it out... I saw a post on Reddit which was talking about GME failing to complete, or something based on some monthly report that had been released or whatever. Can someone translate and explain whatever they were talking about, including if they were right/wrong?
I'm not sure what people know, so I'll explain shorting first.  If you short GME stock, your account shows a negative number of shares, and your broker credits your account with the sale price.  But to make this work, your broker has to locate shares it can borrow, which it then sells on your behalf.  To compensate the lender, interest is paid while the shares are borrowed... and the shares are borrowed until you close your short position (if you had -5 GME, you need to buy 5 GME to bring your number of shares back to zero).

From what I read on reddit (which looked authentic but I haven't verified), market makers can do the same thing, but with more leeway on finding shares.  You have a buy order, and the market maker can sell you shares that it doesn't have.  The clock starts ticking, and the market maker has 3 weeks to locate shares.  In the event they have a "failure to complete" the transaction, it means they can't locate shares.  They effectively created shares out of thin air that didn't exist, and never matched the fake negative shares with actual shares.

Apparently everyone besides market makers (hedge funds, brokers, etc) have just 3 days to locate shares to sell short.  My guess is the "failure to complete" is mostly hedge funds selling short but unable to find shares.  If you're WSB, you have to come up with cash to buy shares... but the hedge funds can simply create shares that don't exist.  That's probably what WSB is calling unfair in their buying attack on GME stock.

There have been a huge amount of failures to deliver with GME...  the SEC posts the failure to deliver data 2x a month, so its for a couple weeks ago. There are lots of failures to deliver, I've pulled the raw data for the last couple sets.... like 65k of failed to delivers. The data is cumulative, so for most stocks most of the time, failure to deliver is a net balance of zero. Sometimes 1-2k shares pop up and go away the next day. occasionally  a stock may have like 100k share spike in Failure to deliver, that then goes away the next day. The data is for all publicly traded companies in the US, so a lot of companies and none of them maintain a failed to deliver balance, it appears and then gets resolved.

GME has had a failure to deliver balance daily for at least the last 4 weeks... at one point as high as 600k shares failed to deliver.  thats despite all the time a market maker or clearing firm has to find the shares if they are covering an oops!

Thank you both. This just reaffirms my belief that the banking/investing industry is corrupt and must be fundamentally revised. Not that it's likely to happen.

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #435 on: February 18, 2021, 12:50:14 PM »
I'd point out this person's biggest bets were call options that expired in January and will expire in April. These investments are inconsistent with the "under valued" narrative pushed in the remarks - GME being undervalued is not something a reasonable person would be betting on correcting on a 3 to 6 month timeline.

IIRC, he bought calls in January 2020 for April '21, AKA 16 month timeline.

mistymoney

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #436 on: February 19, 2021, 12:20:49 PM »
wow - looked into this old one today:
https://www.reddit.com/r/wallstreetbets/comments/lajk83/today_wasnt_a_bloodbath_for_gme_or_amc_we_watched/

17 days ago, so many people we saying the were pushing everything they had into GME. Desperate to buy even one share.

Really made me sad. Like they think this is a game they can win - buy trusting thousand of random people on the internet....

If it were everyone with a couple hundred k invested and putting 5k into game stop, ok, make investing fun, and maybe learn a thing or two. but. a lot of it was people scrambling to buy just a few shares?

oy.

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #437 on: February 19, 2021, 12:24:11 PM »
wow - looked into this old one today:
https://www.reddit.com/r/wallstreetbets/comments/lajk83/today_wasnt_a_bloodbath_for_gme_or_amc_we_watched/

17 days ago, so many people we saying the were pushing everything they had into GME. Desperate to buy even one share.

Really made me sad. Like they think this is a game they can win - buy trusting thousand of random people on the internet....

If it were everyone with a couple hundred k invested and putting 5k into game stop, ok, make investing fun, and maybe learn a thing or two. but. a lot of it was people scrambling to buy just a few shares?

oy.

Good read: https://www.theatlantic.com/technology/archive/2021/02/gamestop-mess-shows-internet-rigged-too/618040/

mistymoney

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #438 on: February 19, 2021, 01:00:46 PM »
wow - looked into this old one today:
https://www.reddit.com/r/wallstreetbets/comments/lajk83/today_wasnt_a_bloodbath_for_gme_or_amc_we_watched/

17 days ago, so many people we saying the were pushing everything they had into GME. Desperate to buy even one share.

Really made me sad. Like they think this is a game they can win - buy trusting thousand of random people on the internet....

If it were everyone with a couple hundred k invested and putting 5k into game stop, ok, make investing fun, and maybe learn a thing or two. but. a lot of it was people scrambling to buy just a few shares?

oy.

Good read: https://www.theatlantic.com/technology/archive/2021/02/gamestop-mess-shows-internet-rigged-too/618040/

very interesting! Thank you!

Found this of note, outside of the GME situation:

Quote
Unlike traditional brokerages, which charge a fee for buying and selling, Robinhood offers these seemingly free trades because it makes its money in large part by selling the trades to big buyers, many of them other hedge funds. It’s those players that will make the real money—and in turn pay Robinhood for the privilege.

The restrictions came because, under its business model, Robinhood could not put up the kind of capital required for all of these trades in the clearinghouses where they are eventually settled, the company wrote in a blog post. So it wasn’t that Robinhood had an interest in kneecapping the short squeeze. Rather, it was never a suitable platform for engineering a squeeze of this scale—based on “free” trades by retail investors precisely because those investors were never its true customers.

how does this double step approach impact a robinhood retailer buying their stock picks?

and does this mean that robinhood only does individual stocks? can you do etfs?

ChpBstrd

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #439 on: February 19, 2021, 03:15:21 PM »
wow - looked into this old one today:
https://www.reddit.com/r/wallstreetbets/comments/lajk83/today_wasnt_a_bloodbath_for_gme_or_amc_we_watched/

17 days ago, so many people we saying the were pushing everything they had into GME. Desperate to buy even one share.

Really made me sad. Like they think this is a game they can win - buy trusting thousand of random people on the internet....

If it were everyone with a couple hundred k invested and putting 5k into game stop, ok, make investing fun, and maybe learn a thing or two. but. a lot of it was people scrambling to buy just a few shares?

oy.

Good read: https://www.theatlantic.com/technology/archive/2021/02/gamestop-mess-shows-internet-rigged-too/618040/

very interesting! Thank you!

Found this of note, outside of the GME situation:

Quote
Unlike traditional brokerages, which charge a fee for buying and selling, Robinhood offers these seemingly free trades because it makes its money in large part by selling the trades to big buyers, many of them other hedge funds. It’s those players that will make the real money—and in turn pay Robinhood for the privilege.

The restrictions came because, under its business model, Robinhood could not put up the kind of capital required for all of these trades in the clearinghouses where they are eventually settled, the company wrote in a blog post. So it wasn’t that Robinhood had an interest in kneecapping the short squeeze. Rather, it was never a suitable platform for engineering a squeeze of this scale—based on “free” trades by retail investors precisely because those investors were never its true customers.

how does this double step approach impact a robinhood retailer buying their stock picks?

and does this mean that robinhood only does individual stocks? can you do etfs?

I think it means that a small, asset-light brokerage that offers all of its services for free to its clients (who are actually its products) did not have enough working capital to guarantee they could purchase stock on behalf of these clients. Trading may look instantaneous on the app screen, but behind the scenes contractual commitments are settled on the next day or days later. If people placed orders for $1B of GME stock, RH would have to commit $1B of its own money to buy the stock from market makers and recoup their expense from the account owners' balances at some later time. If RH didn't have the $1B, they couldn't execute the trades.

The article did make me wonder if the author has an account with eTrade, TD Ameritrade, Schwab, etc. who all offer free trades and display transactions on your screen that haven't actually occurred yet. They may have deeper pockets, but they are the same business model.

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #440 on: February 24, 2021, 02:58:41 PM »
Hmm... might not end up with a loss on this guy after all.  I wonder if hodlers will tend to sell slightly above their cost basis creating mass resistance on the way back up

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #441 on: February 24, 2021, 03:00:58 PM »
Are there ANY retail brokerages that settle immediately?  any t+1 brokerage is going to display positions that haven’t settled yet

Edit: I guess there are some t+0 brokerages that settle internally but that only works if they have the security on their books

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Re: Someone fill me in on what's going on with WSB subreddit and GME / BB stocks
« Reply #442 on: February 24, 2021, 03:15:56 PM »
Are there ANY retail brokerages that settle immediately?  any t+1 brokerage is going to display positions that haven’t settled yet

Edit: I guess there are some t+0 brokerages that settle internally but that only works if they have the security on their books
The Industry standard is T+2, no exceptions.  NSCC continuous net settlement nets all trades against each other, this takes two days.  Even if a broker internally has a buyer to seller internally that doesn't count since all trades are against NSCC/DTCC which is the buyer to every seller and seller to every buyer.

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Not sure if anyone posted this but here is who uses what clearing house-

Which Brokerage Firms Use Which Clearing Firms?
You don't necessarily want to base your decision about a broker entirely on the clearing firm used. It can provide you with some insight into what to expect from that broker.

Here are some of the clearing firms used by some of the major brokers:

Firm   Clearing House   Self-Clearing?
Ally Invest   Apex Clearing   No
Ally Invest Managed Portfolios   Apex Clearing   No
Betterment   Apex Clearing   No
Charles Schwab   Charles Schwab Clearing Services   Yes
E*TRADE   E*TRADE Clearing LLC   Yes
Ellevest   Folio   No
Fidelity Go   National Financial Services, LLC   Yes
Fidelity Investments   National Financial Services, LLC   Yes
Firstrade   Apex Clearing   No
FutureAdvisor   National Financial Services LLC   No
Interactive Brokers   Self-Clearing   Yes
Lightspeed Trading   Wedbush Securities   No
M1 Finance   Apex Clearing   No
MEGI   Merrill Lynch   Yes
Merrill Edge   Merrill Lynch   Yes
OpenInvest   Apex Clearing   No
Personal Capital   Pershing Advisor Solutions   No
Rize   Apex Clearing   No
Robinhood   Clearing by Robinhood   Yes
SoFi Wealth   Apex Clearing   No
SogoTrade   Apex Clearing   No
Stash Invest   Apex Clearing   No
Stockpile   Apex Clearing   No
Tastyworks   Apex Clearing   No
TD Ameritrade   TD Ameritrade Clearing, Inc.   Yes
TradeStation   TradeStation   Yes
Twine   Apex Clearing   No
Ustocktrade   Electronic Transaction Clearing   No
Vanguard   Vanguard Brokerage Services   Yes
Wealthfront   RBC Clearing & Custody   No
Wealthsimple   Apex Clearing   No
Axos Invest   Apex Clearing   No
Zacks Trade   Interactive Brokers LLC   No
Webull   Apex Clearing   No
Public   Apex Clearing   No
Acorns   RBC Correspondent Clearing   No
As you can see, many of the biggest brokers are also self-clearing. Even if a brokerage firm uses a clearing company, many of them use subsidiaries that they own outright.

Many of the smaller brokers rely on third party clearing firms to help them make sure that everything proceeds as it should. It takes a certain number of resources to perform clearing services, and many of the smaller companies just don't have those resources.

It is also important to remember that broker-dealers can change clearing firms. So, even if a broker uses one clearing firm now, the broker may switch to another clearing firm later. For the most part, though, the clearing firm isn't a huge deal to the majority of ordinary investors. As long as the clearing firm used is reputable, the focus should be on finding the best online broker to fit your investing needs and preferences.


jim555

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All trades ultimately clear through NSCC/DTCC.  DTCC owns all street name stock.

mistymoney

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Not sure if anyone posted this but here is who uses what clearing house-

Which Brokerage Firms Use Which Clearing Firms?
You don't necessarily want to base your decision about a broker entirely on the clearing firm used. It can provide you with some insight into what to expect from that broker.

Here are some of the clearing firms used by some of the major brokers:

Firm   Clearing House   Self-Clearing?
Ally Invest   Apex Clearing   No
Ally Invest Managed Portfolios   Apex Clearing   No
Betterment   Apex Clearing   No
Charles Schwab   Charles Schwab Clearing Services   Yes
E*TRADE   E*TRADE Clearing LLC   Yes
Ellevest   Folio   No
Fidelity Go   National Financial Services, LLC   Yes
Fidelity Investments   National Financial Services, LLC   Yes
Firstrade   Apex Clearing   No
FutureAdvisor   National Financial Services LLC   No
Interactive Brokers   Self-Clearing   Yes
Lightspeed Trading   Wedbush Securities   No
M1 Finance   Apex Clearing   No
MEGI   Merrill Lynch   Yes
Merrill Edge   Merrill Lynch   Yes
OpenInvest   Apex Clearing   No
Personal Capital   Pershing Advisor Solutions   No
Rize   Apex Clearing   No
Robinhood   Clearing by Robinhood   Yes
SoFi Wealth   Apex Clearing   No
SogoTrade   Apex Clearing   No
Stash Invest   Apex Clearing   No
Stockpile   Apex Clearing   No
Tastyworks   Apex Clearing   No
TD Ameritrade   TD Ameritrade Clearing, Inc.   Yes
TradeStation   TradeStation   Yes
Twine   Apex Clearing   No
Ustocktrade   Electronic Transaction Clearing   No
Vanguard   Vanguard Brokerage Services   Yes
Wealthfront   RBC Clearing & Custody   No
Wealthsimple   Apex Clearing   No
Axos Invest   Apex Clearing   No
Zacks Trade   Interactive Brokers LLC   No
Webull   Apex Clearing   No
Public   Apex Clearing   No
Acorns   RBC Correspondent Clearing   No
As you can see, many of the biggest brokers are also self-clearing. Even if a brokerage firm uses a clearing company, many of them use subsidiaries that they own outright.

Many of the smaller brokers rely on third party clearing firms to help them make sure that everything proceeds as it should. It takes a certain number of resources to perform clearing services, and many of the smaller companies just don't have those resources.

It is also important to remember that broker-dealers can change clearing firms. So, even if a broker uses one clearing firm now, the broker may switch to another clearing firm later. For the most part, though, the clearing firm isn't a huge deal to the majority of ordinary investors. As long as the clearing firm used is reputable, the focus should be on finding the best online broker to fit your investing needs and preferences.
thanks for this!