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A summary of what happened today with GME and why securities were restricted
Posted on 1/28/21 at 5:39 pm
Posted on 1/28/21 at 5:39 pm
Courtesy of Reddit
quote:
I'm glad this place has quieted down enough for some actual DD written by a monkey with a keyboard and Adderall. Disclaimer: I am that monkey. Let me explain to you what happened, play by play. I will give you illiterates who hate reading a spoiler up front: We were within approximately 30 seconds of triggering a nuclear bomb that would have blown up the market. Do I have your attention? Here goes:
Yesterday, new call option strike prices were added all the way up to $570. Do I have to go over gamma squeezes again? Really? We've been over this: when deep out-of-the-money call options start being gobbled up and the price starts moving towards being in-the-money, the call writers have to hedge their risk of having their sold calls exercised, typically by buying stock. This creates upwards pressure on the market. We've been seeing these movements all week.
Yesterday after market, you probably saw that coordinated effort to drive the price down and spook retail investors into a mass sell-off. It didn't work.
Last night, Robinhood sent out a message to users: you could no longer enter into new options. You could exercise them if you had the collateral (money in the account) to do so. Very interesting and the first sign of pants-shitting fear.
Today, the market opened very strong. It opened so strong that we were looking at a self-perpetuating gamma squeeze all the way up way past $570.
At approximately 9:58 am, the stock had reached $468 in a parabolic move.
Two minutes earlier, at 9:56 am, Robinhood tweeted that they were not allowing users to buy GME stock, but they would allow selling.
The trend instantly halted and started a collapse downwards, before picking up a bit, especially after some retail was allowed back in.
Okay, now that you are clear on the facts, understand this: The market ran out of liquidity today, or was threatening to get close enough that they killed it. What does that mean? It means they ran out of shares and/or capital. They wouldn't let you buy new shares because we were burning through all the shares on the market. I saw an unsubstantiated post from a user who said a small sell limit order executed at $2600 for him. Do you get the severity of the situation, if that's true? It means the buying was getting to the point where it was just about to put INFINITE pressure on the price of the shares. It means virtually any ask was getting bid.
How do you get infinite upwards pressure? A gamma squeeze triggering the mother of all short squeezes, just like we predicted. The call writers need shares to hedge. Retail is still buying more. The short sellers need over 100% of the float back. Add these together. There were more shares needed than existed on the open market. That's what a liquidity crisis is.
Listen to this remarkable (if infuriating) interview where the chairman of Interactive Brokers admits that they didn't have the capital to pay out the winners (us), so they took their ball and went home. DO YOU GRASP HOW INSANE IT IS THAT HE SAID THEY NEEDED TO SHUT DOWN BUY ORDERS TO "PROTECT THE MARKET"? Hello! He's not talking about the market for GME shares. He's talking about the entire market! The New York Stock Exchange. The NASDAQ. All that.
Remember the movie Snowpiercer? Do you remember that scene where the lower class people realize the soldiers who oppress them have no bullets? Go to the 1:00 minute mark of this link: LINK
It kick starts a full blown rebellion. They have no bullets. It's the exact same in this market: No capital. No shares. Infinite losses inbound.
TL;DR: For all you who will just skip to the bottom to ask, "Do I get my tendies now?" the answer is this: they NEED NEED NEED your shares. Do you get that? HOLD. Like the guy in the movie, scream, "They're out of bullets!" and create a stampede. That's how we win.
They needed your shares so badly that they literally risked PRISON TIME to get them. They tried robbing you, and I'm not even exaggerating. They were within 30 seconds of all being wiped out today.
This post was edited on 1/28/21 at 5:43 pm
Posted on 1/28/21 at 5:43 pm to 13SaintTiger
(no message)
This post was edited on 4/13/23 at 11:59 pm
Posted on 1/28/21 at 5:51 pm to oneg8rh8r
Infinite money cheat code was entered
Posted on 1/28/21 at 5:54 pm to MrJimBeam
Is there anyone with balls and no care for bribes able to investigate this and bring people to Justice?
Edit: good explanation.
Edit: good explanation.
This post was edited on 1/28/21 at 5:56 pm
Posted on 1/28/21 at 5:55 pm to 13SaintTiger
Wall Street money machine went “brrrrrrrrrrt *chackchackchack* OH frick!”
Posted on 1/28/21 at 5:59 pm to teke184
Do I get to throw in that the entire federal government is bankrupt along with most major states and leveraged beyond a level anyone could fathom due to future obligations or is that a later chapter?
Posted on 1/28/21 at 6:00 pm to tide06
Feds aren’t bankrupt as long as they can print money.
Of course, going full Weimar Republic still puts us into a death spiral.
Of course, going full Weimar Republic still puts us into a death spiral.
Posted on 1/28/21 at 6:00 pm to 13SaintTiger
quote:
Infinite money cheat code was entered
we only liked the stock
Posted on 1/28/21 at 6:03 pm to 13SaintTiger
quote:
Infinite money cheat code was entered
Who knew it was "stonks only go up"
Posted on 1/28/21 at 6:04 pm to 13SaintTiger
If anyone really wants to make a change and they hold GME stock they do not sell under any circumstances.
Posted on 1/28/21 at 6:05 pm to dclt145
I am not clear what the change would be other than “Leave is the frick alone”
Posted on 1/28/21 at 6:07 pm to rocket31
Apparently Fidelity and Vanguard own GameStop shares I knew it just wasn’t retailers
quote:
You wanna know why fidelity and vanguard were the only two standing? They hold something like over 20% of the gamestop shares. They could let you buy, BECAUSE THEY WERE THE ONLY ONES WHO COULD GET SHARES. The squeeze is squozing, and the only way out of $100k+ share prices which would break everything was to STOP THE MARKET.
Posted on 1/28/21 at 6:07 pm to teke184
quote:
Feds aren’t bankrupt as long as they can print money.
Of course, going full Weimar Republic still puts us into a death spiral.
Did you see the chart showing how much money the fed printed due to covid and other stupid BS?
We are weimar now.
No one believes in our institutions, our media, our political system and we cannot address our spending due to political realities that are intractable.
It’s done, just a question of how long it takes to unwind and what follows.
Posted on 1/28/21 at 6:14 pm to 13SaintTiger
quote:
You wanna know why fidelity and vanguard were the only two standing? They hold something like over 20% of the gamestop shares. They could let you buy, BECAUSE THEY WERE THE ONLY ONES WHO COULD GET SHARES. The squeeze is squozing, and the only way out of $100k+ share prices which would break everything was to STOP THE MARKET.
Wow
Posted on 1/28/21 at 6:15 pm to 13SaintTiger
Not sure how that actually explains what happened... I'm hoping there is a detailed explanation of the under-the-hood stuff re: clearinghouses and market makers. That's the explanation that needs to be given and something that the RH CEO failed to convey fully IMO.
Posted on 1/28/21 at 6:15 pm to tide06
quote:
We are Weimar now.
That’s why we need to get this wheelbarrow of cash now. I want to buy a loaf of bread when this is all said and done.
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