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Thread: GameStop, shorts and Reddit. Storming the Capital...

  1. #21
    Senior Member welch's Avatar
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    Default Re: GameStop, shorts and Reddit. Storming the Capital...

    Gamestop finished around $40 and change. Still trending down in a bumpy way, with small rallies as it goes.

    https://www.google.com/search?q=game...hrome&ie=UTF-8

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    Senior Member dneal's Avatar
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    Default Re: GameStop, shorts and Reddit. Storming the Capital...

    Hedge funds merely had to turn around and sell their newly bought GameStop, and they have the accounts and pipes to trade in a flash.
    You have it completely backwards. Hedge funds sold shares they were loaned. That was the short sell. They had to buy shares to be able to return them. They were stuck having to eat the interest of the shares they were borrowing, or they had to eat the loss for each share they bought back at a higher price than they sold them for. That was the short squeeze.
    "A truth does not mind being questioned. A lie does not like being challenged."

  3. #23
    Senior Member welch's Avatar
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    Default Re: GameStop, shorts and Reddit. Storming the Capital...

    Quote Originally Posted by dneal View Post
    Hedge funds merely had to turn around and sell their newly bought GameStop, and they have the accounts and pipes to trade in a flash.
    You have it completely backwards. Hedge funds sold shares they were loaned. That was the short sell. They had to buy shares to be able to return them. They were stuck having to eat the interest of the shares they were borrowing, or they had to eat the loss for each share they bought back at a higher price than they sold them for. That was the short squeeze.
    You misunderstand. Of course the hedge funds had to buy at the inflated price. That's how the business works. I said that the funds could immediately sell what they had been forced to buy. Further, the funds have the bandwidth into the market to trade instantaneously. Hedge funds have the resources to survive, but individuals do not.

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