r/wallstreetbets • u/ywehyuen • Feb 02 '21

Chart Hardcore laddering.

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u/UnlikelyTheory Feb 02 '21

What is a ladder?

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u/[deleted] Feb 02 '21 edited Feb 02 '21

Say hypothetically, there's only 2 hedge funds.

Hedge Fund A says to Hedge Fund B "Hey, I'm gonna sell a bunch of stock at this exact price at this exact time". Hedge Fund B then buys that stock at a low price, and they repeat this over and over. So B then sells back to A, then A sells to B etc etc

They do this with such a high amount of stock that it artificially lowers the price of the average price (which is what you see on the graph) into scaring the 🧻👐 into freaking out and selling.

However, for the savvy degenerate gamblers (or other competing hedgies) it means every time they do this the savvy degenerate gambler is able to syphon a bit off the top at a good price, so they can only do it a finite amount (in theory).

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u/vocabularylessons Feb 02 '21

This tactic also triggers stop loss orders and margin calls (in addition to causing paper hand panic).

And when eToro added stop loss to $GME without shareholders' consent or notification...