- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: I need an explanation; Robinhood & GameStock related
Posted on 1/29/21 at 6:38 am to Wtodd
Posted on 1/29/21 at 6:38 am to Wtodd
Several hedge funds have been on the brink of bankruptcy. These funds typically would probably view short-selling Gamestop as a fairly low risk trade, so they did a ton of it. Problem is, they had basically unlimited risk if the market moved against them.
Ex. Hedge fund shorts 6 stocks at $10 and puts in an order to buy 2 stocks if it gets to $8, 2 more at $7 and 2 at $5. If all their orders clear, they would expect to make $16 profit. But if it comes time to execute and the stock never fell, but actually climbed to $12, I would lose $12 once I bought in those shares.
Redditers on a trading page saw video of one of the hedge funds talking about how they took a huge short position on Gamestop, so they all started buying like crazy to "artificially" bump the price up. So it was like the above example for the hedge funds, except some of the funds had several million naked shorts in Gamestop and were being forced to liquidate at $90/share when they maybe sold for $10 or $15
Ex. Hedge fund shorts 6 stocks at $10 and puts in an order to buy 2 stocks if it gets to $8, 2 more at $7 and 2 at $5. If all their orders clear, they would expect to make $16 profit. But if it comes time to execute and the stock never fell, but actually climbed to $12, I would lose $12 once I bought in those shares.
Redditers on a trading page saw video of one of the hedge funds talking about how they took a huge short position on Gamestop, so they all started buying like crazy to "artificially" bump the price up. So it was like the above example for the hedge funds, except some of the funds had several million naked shorts in Gamestop and were being forced to liquidate at $90/share when they maybe sold for $10 or $15
Posted on 1/29/21 at 6:42 am to ClampClampington
The nerve of thing the underdog will survive....
Posted on 1/29/21 at 11:18 am to ClampClampington
quote:
Redditers on a trading page saw video of one of the hedge funds talking about how they took a huge short position on Gamestop, so they all started buying like crazy to "artificially" bump the price up. So it was like the above example for the hedge funds, except some of the funds had several million naked shorts in Gamestop and were being forced to liquidate at $90/share when they maybe sold for $1
And the every so smart hedge funds did NOT do the smart risk management and take a counter position to account for a price increase. They failed to do this cause it could cost them money and a percentage of their expected gain. They got greedy and they can go to hell. On blame here is themselves.
Popular
Back to top
Follow TigerDroppings for LSU Football News