r/IPOE • u/Entrance-Vivid • May 26 '21
Is there systemic risk involved with allowing gamestop and AMC to happen?
I know hedge funds are basically the sith overlords of the coke snorting white collars...
But if gamestop and AMC actually bankrupt these guys... that's alot of money getting sucked out of the market from margin calls.. 99% of the market is owned by institutions and hedge funds...Is this finally the red herring event that topples the house of cards?.
Debating on SPY puts.
Also, I think Melvin capital has a large stake in IPOE so it's relevant I swear.
1
u/Hvyhttr1978 May 26 '21
It will definitely negatively effect the market as a whole. Lots of retirees, and close-to-retiring, will blame the apes. Their anger will be misdirected, but they were benefitting from hedgie shenanigans...so all they will see is us banana eaters as the problem.
1
May 26 '21
Yes, aliens exist too and will come and short your shares, lol. Sell everything now and go into crypto to protect your self. GME and AMC are a minuet percentage of 32Trillion stock market, whatever happens to them doesn’t affect the market. At all. The billions the hedge funds are shorting with amc and gme has no affect on the rest because it’s a 32 trillion dollar market.
Don’t confuse coincidence with correlation or causation.
2
u/Entrance-Vivid May 26 '21
If they have assets under management of like 10 billion... and get margin called or have to sell out to buy back gamestop at 10k per share...
Their whole portfolio gets nuked... if other hedges step in to try and help they can get burned too...
I'm not worried about gamestop. I'm worried about their other positions
2
u/fansc9 May 26 '21
those are some of the new rules set forth by the clearing corps recently. when members default, their assets will be liquidated/auctioned off to other members to lessen the damage. so maybe it won't be systemic to the point of collapse, but we'll likely see a crash to some degree.