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GME and AMC stock action (out of main)
- Thread starter Electroman
- Start date
note blip on 11/24, got under control, another blip 12/2, took a week or so to get under control until 12/16, then shorts lost control. share price pretty stable sideway but FTD value is getting out of control of shorts.
i think i’m looking at this correctly. and these folks have presented it far better than i could, but focused me on it a bit more, eh.
i expect the share price jump between 1/13/2021 and 1/14 freaked a bunch of shorts
if _only_ short data came out more often.
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to me, the value of these previous graphs and tables, seems to be, stitch together the last say 3-4 months FTD data and look for anomalies (weirdness) like sudden or odd jumps, like happened around 12/2/2020, the part of the curve where ?counterfeit? shares may be appearing and throw a monkey wrench in it, along with perhaps a tiny profit.
i suspect a _lot_ of others will do the same. (things to do in retirement, eh)
that unreported short interest have become very interesting it seems
cheers, this has been an education
i suspect a _lot_ of others will do the same. (things to do in retirement, eh)
that unreported short interest have become very interesting it seems
cheers, this has been an education
JRP3
Hyperactive Member
Cathie Wood has a different take on shorting, disagreeing with Elon. As I mentioned in the comments there were plenty of people critiquing Tesla long before they went public. I didn't need shorts to hear the "other side".
I think there's a gulf between being "bearish" and "shorting", if you don't think a company will survive, if you think their share price will fall, just don't invest in them, let them die naturally. No need for shorting to accelerate that.
So I do not agree with Cathie on this point either, I'm with Elon.
Paracelsus
Active Member
Thank you for all your efforts to describe and to bring visibility to the potential for use of counterfeit share activity to cover Short positions and cap further share price escalation of GME without any shares to do so. It was a tremendously interesting sequence of posts. The very fact that this mechanism is being discussed may be part of the reason some of the heavily shorted stocks are recovering so quickly, as Shorts may be taking losses elsewhere to avoid getting caught with their hand in the cookie jar on a bigger scale as Naked Short positions become scrutinized more publicly.
This of course begs the question - could this have happened to TSLA when the share price fell substantially in the final seconds of the market day determining the share price for S&P500 inclusion. TSLA was literally acting as though it was already in a short squeeze leading up to those final seconds, and many of us on TMC were scratching our heads over this price action for weeks after that, with all kind of theories floating around afterwards regarding how it might have been accomplished with such force and impact at the finish line with potentially so few shares available to make that possible. Your description of the chain of events for GME price drop could perhaps be applied to that TSLA price-drop discussion given the massive Short positions against TSLA at that time that were getting roasted as TSLA was climbing like a rocket at the end of the day, and had already gone up almost an order of magnitude in the previous months leading up to inclusion. Furthermore, I am extremely skeptical (without proof of course) of any of the TSLA/GME Shorts publicly suggesting they really don’t understand some of the mechanisms we have been observing. Seems more like a red-herring to me. I really appreciate your efforts!
This of course begs the question - could this have happened to TSLA when the share price fell substantially in the final seconds of the market day determining the share price for S&P500 inclusion. TSLA was literally acting as though it was already in a short squeeze leading up to those final seconds, and many of us on TMC were scratching our heads over this price action for weeks after that, with all kind of theories floating around afterwards regarding how it might have been accomplished with such force and impact at the finish line with potentially so few shares available to make that possible. Your description of the chain of events for GME price drop could perhaps be applied to that TSLA price-drop discussion given the massive Short positions against TSLA at that time that were getting roasted as TSLA was climbing like a rocket at the end of the day, and had already gone up almost an order of magnitude in the previous months leading up to inclusion. Furthermore, I am extremely skeptical (without proof of course) of any of the TSLA/GME Shorts publicly suggesting they really don’t understand some of the mechanisms we have been observing. Seems more like a red-herring to me. I really appreciate your efforts!
Words of HABIT
Active Member
Hedge Funds keeping an eye on Reddit to prevent another GME blowup.
Wall Street is keeping very close tabs on WallStreetBets. Here's how - CNN
Wall Street is keeping very close tabs on WallStreetBets. Here's how - CNN
https://www.washingtonpost.com/business/2021/02/02/yellen-gamestop-regulator/
Treasury Secretary Janet Yellen and other top financial regulators will convene amid GameStop stock craze
WaPo
"Bob Hockett, a professor of law and finance at Cornell and former New York Federal Reserve lawyer, said regulators may look at whether the identities of the traders involved in the GameStop stock volatility were transparently disclosed.
He also said regulators are likely to look at whether leading hedge funds were in violation of the rules on short-selling. Hockett also raised the prospect of imposing new oversight over some of the trading platforms, such as Robinhood, under parts of the Dodd-Frank financial reform law passed in 2010."
Treasury Secretary Janet Yellen and other top financial regulators will convene amid GameStop stock craze
WaPo
"Bob Hockett, a professor of law and finance at Cornell and former New York Federal Reserve lawyer, said regulators may look at whether the identities of the traders involved in the GameStop stock volatility were transparently disclosed.
He also said regulators are likely to look at whether leading hedge funds were in violation of the rules on short-selling. Hockett also raised the prospect of imposing new oversight over some of the trading platforms, such as Robinhood, under parts of the Dodd-Frank financial reform law passed in 2010."
This is what I understood from that video: Cathie thinks shorting is good and is not harmful, because good companies will survive any kind of short attack, and she uses Tesla as a good example of that. She is also thankful of shorts, without them Ark would not have been able to get into TSLA so cheap.
My take: That is an incorrect self-serving argument based on a sample of one. Using Tesla as an example is incorrect. Tesla is an exception because of messiah Musk. Tesla survived those attacks and thrived only because Tesla has a larger than life figure running their company. Anyone else at the helm, Tesla would have been history by now. There are many good innovative companies that get into temporary trouble (some of them their own making and some due to external forces (pandemic)) that are perfectly capable of bouncing back if only the short parasites don't kill them, so they can live to see another bright day. They don't have a Musk at the controls and they cannot withstand the onslaught of coordinated short attack.
Also Cathy was not aware that more than 100% of float can be shorted.
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bkp_duke
Well-Known Member
The counterargument here - go watch "The China Hustle" on Netflix (I think). There are some (fraudlent) companies which really do deserve to be shorted.
I see both sides of this argument.
I see both sides of this argument.
The reason I don't like shorting is the disparity of power. The ability to bring to bear overwhelming shorts can crush even companies that otherwise are _fine_ just not amazing growth.
The ability to short does serve a purpose though and I think the right solution is to put some rules on it. There should be a limit to how much something can be shorted and all the weasel ways to get out of holding the bag when you lose on your shorts (as displayed for GME) should be blocked.
The ability to short does serve a purpose though and I think the right solution is to put some rules on it. There should be a limit to how much something can be shorted and all the weasel ways to get out of holding the bag when you lose on your shorts (as displayed for GME) should be blocked.
Drumheller
Active Member
And yet Nikola still exists and the stock price has been rising.
JRP3
Hyperactive Member
But is shorting the only way to expose fraudulent companies? Many of us saw the problems with Nikola before any shorts.
bkp_duke
Well-Known Member
The argument is that shorting has the most teeth. Everything else takes too long (SEC) or doesn't have teeth.
adiggs
Well-Known Member
I have no problem with shorting per se. If somebody is taking a short position legally - borrow shares first and then sell them, totally fine. And then carry through with something more like we call buy and hold - for short sales it'd be sell and hold. The idea in both cases is an investment thesis that we then sit back and watch, instead of using manipulative buys and sales; series of heavily biased articles designed to push the stock price in our direction.
It's the latter two bits that are the problem. Specifically including naked shorting by 'investors' that are taking a directional bet, and using naked shorts to manufacture counterfeit shares, pushing the actual share price down the supply / demand curve. These are the problem.
I think there are a couple of facets to the solution. The easy one is re-implement the uptick rule for all companies, all of the time. Companies that want to short will still short - they just won't be able to use the manipulative naked shorts to drive the share price down. Or at least not as much.
The second, which is harder to explain to the general public, is for some serious regulatory hand slapping for FTDs and for naked shorting for the purpose of taking a direction. I think this is solvable by shrinking the time window for short sale shares to be located and borrowed. Better is to make access to naked shorting much more difficult - restrict it to actual market makers with a non-directional position and give them 3 day settlement to find and borrow shares. Real market makers with a non-directional position will either buy to close those shares quickly, or will go seeking borrowed shares.
In reality they won't want to pay the interest, so they'll buy-to-close their naked shorts swiftly.
adiggs
Well-Known Member
Shorting is the capitalist solution to the problem, and I have no problem with that. There's a world of difference between borrowing shares and then selling them vs. naked shorting of shares.
In the clubhouse session Vlad kept talking about NSCC calculate deposit based on VAR and account holdings.
I understand that the deposit will depend on the net buying volume that has not been cleared(ie, trading volume in past two days), but I don’t understand why it would depend on how many shares the user is already holding, I mean they are already cleared and people are risking their own money afterwards, what’s the risk exposure of NTCC for those?
As the result of my confusion, I understand a broker have to limit how many shares one could buy in rolling two days period, but don’t understand why take into consideration how many shares people already hold, as long as they are not using margin.
Anyone has some insight?
I understand that the deposit will depend on the net buying volume that has not been cleared(ie, trading volume in past two days), but I don’t understand why it would depend on how many shares the user is already holding, I mean they are already cleared and people are risking their own money afterwards, what’s the risk exposure of NTCC for those?
As the result of my confusion, I understand a broker have to limit how many shares one could buy in rolling two days period, but don’t understand why take into consideration how many shares people already hold, as long as they are not using margin.
Anyone has some insight?
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