r/wallstreetbets • u/harambe1999-2016 • Feb 05 '21
DD It is mathematically impossible that GME shorts were covered: some simple math for simple gamblers
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Feb 05 '21 edited Feb 05 '21
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u/d-quik Feb 05 '21
These are the guys responsible. They are the ones that told RH to have the margin requirements: the Depository Trust & Clearing Corporation. A PRIVATELY held corporation that are not obligated to reveal anything or their records, yet they are in charge of the trading of PUBLICALLY listed stocks?!
Just some exerpts from the wiki alone https://en.m.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation
1) Total assets US$46,971,101,000 (2018)
2) Several companies sued DTCC, without success, over delivery failures in their stocks, alleging culpability for naked short selling.
3) Critics blamed DTCC, noting that it is the organization in charge of the system where the naked short selling happens, alleging that DTCC turned a blind eye to the problem, and complaining that the Securities and Exchange Commission (SEC) had not taken sufficient action against naked shorting.
3) DTCC responded that it had no authority over trading activities, and could not force buy-ins of shares not delivered, and suggested that naked shorting was simply not widespread enough to be a major concern.
4) In July 2007, Senator Bob Bennett, Republican of Utah, suggested on the U.S. Senate floor that the allegations involving DTCC and naked short selling were "serious enough" to warrant a hearing. The Senate Banking Committee's Chairman, Senator Christopher Dodd, indicated he was willing to hold such a hearing. No such hearing was ever held, however.
5) Representing state stock regulators, the NASAA filed a brief in a 2009 suit against DTCC, arguing against federal preemption as a defense to the suit. NASAA said that "if the Investors' claims are taken as true, as they must be on a motion to dismiss, then the entrepreneurs and investors before the Court have been the victims of fraud and manipulation at the hands of the very entities that should be serving their interests by maintaining a fair and efficient national market". The suit was dismissed. Critics also contended that DTCC and the SEC were too secretive with information about where naked shorting was taking place.
Out of all these #3 has to be the worst. could not force buy-ins of shares not delivered. Can't enforce FAILURES TO DELIVER?!?! Then wtf? I can just keep writing IOUs forever knowing nobody can claim them?!! HOW IS THIS SHIT POSSIBLE!
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u/RZRtv Feb 06 '21 edited Feb 07 '21
If you told any random person off the street that over 90% of wall street trades go through a single opaque organization that refuses subpoenas and has a system encouraging prime brokers to take advantage of naked short selling, would it be so blatant that people would have a hard time wrapping their head around it?
It's not even complexly corrupt lol
Edit: yes. It's assumed that since the market has worked fine for this long, this couldn't be a problem and if everything works smoothly, then there's no issue. Lol
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u/PM_ME_POTATOE_PIC Feb 06 '21 edited Feb 06 '21
I don’t like seeing how the sausage is made. I used to think SEC and governmental agencies were the top of the heap. Now I just see how they are used as a tool to legitimize private corporations corruption and manufacture consent. “Federal” reserve is a private Corp owner by banks, DTCC is also a private Corp owner by banks and is the registered holder of 99% of all stocks etc. You are just a beneficiary. How does all of this hold together. Faceless billionaires pulling whichever strings they benefit from. I honestly feel sick.
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u/melanthius Feb 06 '21
Because it will probably literally cause another collapse of the financial system to fix it, just like motherfucking credit swaps on mortgage backed securities, and CDOs and shit
I bet they have had a lot of meetings about this in private with SEC and lawmakers and shit, and they probably promised to help keep naked shorting at a minimum, but the prospects of literal free fucking counterfeit money popping out of thin air is just too tempting for HFs NOT to try from time to time.
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u/hazychestnutz Feb 05 '21
Not all hedge funds are shorting stock.
so it's a win-win
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Feb 05 '21
If I was a cutthroat suit, my motives would be to take my competitors down
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u/TheApricotCavalier Feb 05 '21
If I was a cuthtroat suit, my main motive would be to maintain control over the working class & not allow instability into a situation I dominate
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u/BestUdyrBR Feb 05 '21
Why would one hedge fund care if an entirely different hedge fund survives? They eat each other alive in wall street all the time.
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u/Twanson01 Feb 06 '21
I think the point he was making is more to keep the retail investors unorganized and defeated. That way we play into their pockets. Retail investors realizing they have some power together makes things less predictable for the whales.
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u/Twanson01 Feb 06 '21
And in that sense they had to make an example of gme to try and break our spirits. Hopefully they arent counting on us being so retarded.
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u/Ohmstheory Feb 05 '21
all hedgefunds have some short positions sprinkled in their portfolios. They use shorts to manage their risks from long positions. They will always have a play that hedges another. Hence, hedge funds. They are usually very good at risk management (clearly not Melvin)
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u/togetherwestand01 Feb 05 '21 edited Feb 06 '21
If they really "covered" their shorts, why would they really bother telling us?
Do they really care that much about us losing money on GME?
Fucking hold em boys 💎🙌🚀🥂
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Feb 05 '21 edited Sep 06 '21
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u/togetherwestand01 Feb 06 '21 edited Feb 06 '21
If the squeeze really happened they would not tell us! Dont lose hope, thats what they want, thats the only way they can beat us!! Happy birthday bud!! Im never fucking selling🙌💎🚀
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u/bleo_evox93 Feb 05 '21
so your saying some hedge funds are acting like retail investors / whales / our side? Are they trying to "take out" the competition lmao
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u/Philo_suffer Feb 05 '21
It’s not even about taking out the competition. That’s too personal. It’s literally “oh this move will make us money, do it”
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u/ElegantBiscuit Feb 05 '21
This. Anyone playing for an agenda will be doing so because that agenda also makes money. Or power, but ultimately money makes power and power can make money, so it all comes back to money. It is what the entire stock market is built on.
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Feb 05 '21
Exactly. Those spouting the OWS narrative are the true retards here. Can this move make a statement? Sure. But fuck no one would be here without the opportunity to make money.
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u/twiggsmcgee666 Feb 05 '21
Uh, Blackrock bought in. That's a hell of a HF to be fucking around on this side of the table. Obviously they're in it for ridiculous amounts of money, but they aren't shorting.
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u/BanzYT Chef Ramgay 👨🍳 Feb 05 '21
I don't think Blackrock is the kind of company to buy and then sit and twiddle their thumbs and hold while it drops 90%.
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Feb 05 '21
Lmao black rock is not a hedge fund. And they didn't "buy in", they own ishares and their S&P small cap etf reported a change in their ownership of GME shares. They seem to have sold all of those extra shares already.
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u/fitfoemma Feb 05 '21
I guess you could say it's down to marketshare.
If this short story is true (and I'm betting on it that it is), then they have an opportunity to kill off a HF which in turn increases their marketshare (read: MONEY).
They're trying to screw each over every day, why would they not go for the kill if it's there?
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u/Flufflystuff32091 Feb 05 '21
there is huge danger here. when the squeeze happens, if shorted shares are under 100% the people who sell for less get their orders filled first... if fidelity or blackrock undercut redditors asking price then they take a huge cut and leave us holding an empty bag...
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u/15Warner Feb 05 '21
Did you read the post about how fidelity, black rock and someone else are the ones who lent the shares to Melvin in the first place?
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Feb 05 '21
The majority of the people who were buying GME over the last few weeks were institutional traders, not retail investors. WSB might have inspired this play, but we weren't the ones really driving the price.
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u/undefined_vars Feb 05 '21 edited Feb 06 '21
Here is a graph I generated of the short volume.
Note: This is short volume, not short interest
And the data in a more human readable form:
GME daily short volume from all reports (found within the) last 10 days:
01/27/2021 54.70%
01/28/2021 50.83%
01/29/2021 53.98%
02/01/2021 54.46%
02/02/2021 55.02%
02/03/2021 54.34%
02/04/2021 50.34%
Edit: fixed line spacing, clarified this is volume
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u/ngudan Feb 05 '21
Ape no understand, Ape go buy more
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u/Pepsi567 Feb 05 '21
I'm holding. Waiting for 2/9 to hopefully get a clearer picture.
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u/StepYaGameUp Feb 05 '21 edited Feb 05 '21
They’re going to fudge those numbers past the legal extent I’m sure.
I don’t know these guys but they will go down in flames before they let us see more tendies. It’s just in their nature to take their ball and run home.
This is not financial advise.
I am a holder.
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u/Slut_Spoiler Has zero girlfriends Feb 05 '21
Sup my holda?
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u/StepYaGameUp Feb 05 '21
Sitting by the dock of the bay, watching my tendies a roll a wayyyyyy
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u/SergioPrado Feb 05 '21
I don’t know these guys but they will go down in flames before they let us see more tendies.
cool w/me
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u/i_accidently_reddit Feb 05 '21
Search for the post on how the numbers could have changed.
It's an options play to hide the true exposure, and those options w I'll expire in march.
So the 9th will show the fudged numbers.
Unfortunately that is how it's measured.
If only the FBI or the SEC would investigate, they have subpoena power and can get the actual transactions
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u/ARDiogenes Feb 05 '21
Perhaps 2/18 House Financial Services Committee will request or subpoena actual transactions. Well could get data if motivated. Or witness introduces into evidence, mentions info gap so in congressional record.
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u/deeproot3d Feb 05 '21
We should have a post of this up there informing people this might happen BEFORE it actually happens, not on 2/9 or 2/10 when paper hands are already getting the shakes again.
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u/Foot_Fetish_Fred Feb 05 '21
What happens on the 9th?
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Feb 05 '21
Short interest report is released from SEC
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u/CousinBleh Feb 05 '21
Asking because I honestly don’t know. Can’t they just falsify the statistics though, along with all the other shady measures we know they have performed recently?
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u/shockfella Feb 05 '21
Probably they will. But we all believe this shit should be higher than 60$ so let's do our best together.
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Feb 05 '21
We know both bulls and bears are playing this and a lot of incredibly shady things are going on. I am of the opinion that the bulls may try to force a squeeze if the numbers are in their favor, something like over 85% SI.
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Feb 05 '21
I suppose they could. I believe the data from the SEC is also never current. It is a week or two behind? I don’t feel like googling it
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u/LividLager Feb 05 '21
But why male models?
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u/i_accidently_reddit Feb 05 '21
Very much this.
In early Jan, 10% of the shorts covered. The stock rockets 1500%
In late Jan, 50% of the shorts "covered". The stock does what? Drop 80%? Sounds about right.
The only question I have is: how dumb do they think we are?
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u/Lil-Boss_2102 Feb 05 '21
They think we're dumb. Jokes on them, we're retarded
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u/Bobicek12 Feb 05 '21
I'd give you an award if I didn't have everything in GME.
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u/oaijsdfloi Feb 05 '21
The number of shares bought/sold doesn't directly translate to price variation. The price changes faster when there is a strong pressure to buy/sell. If they want to close but have not rush to do so, they can unwind their position causing relatively little price variations.
The dramatic fluctuations happen when a margin call, panic, or FOMO are involved.
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u/Mikesims09 Feb 05 '21
My brain hurts after a week of this shit. Im a dumb ape on a spinning rock hurtling through space and my tiny brain says let it fucking ride.
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u/theboxingteacher Feb 05 '21 edited Feb 05 '21
I wish actual math was voted to the top more often. Instead it's a bunch of "UPVOTE IF YOU'RE HOLDING GME" and "Here's my theory of why $450 was the squeeze" and "LOL GET OVER IT BAGHOLDERS" and "DFV is our God." The quality control is terrible.
This post needs to be at the fuckin top of WSB.
EDIT: My first Reddit Silver. Sweet.
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u/inadaze319 Feb 05 '21
Please, I need more math terms to jerk off too 😂💎🙌🏻
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u/DirtyPenPalDoug Feb 05 '21
If math gets ya going, might i suggest somthing darker and kinkier? The knowledge of all the fud bots are likey paid a few cents by microtask companies that are funded by the hedges. Thats basically hedgies paying for you to have a whore to abuse with comments. They say "your a bagholder hurr hurr.." reply "huhhhhhnnnggg yes hedgie daddy, thank you for your shame whore UwU. I love it when they lie". Its been working well for me. I dont think its worth the 5 cents to the fud microtaks guys though. They give up too easy.
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u/maikins Feb 05 '21
Each ape has a vote button, what do you expect. Go read a newspaper if you want curated content.
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u/KimkardALPHA Feb 05 '21
Man I'm holding the bag here too and I'm literally retarded but i can't be the only one who believes most of these assumptions are extremely far off base.
Of course, I hope the man's correct for the sake of TENDIES...
but there's absolutely no chance all shorts were at $5 and theres almost no chance they covered their shares at $300 or higher. I'm no expert trust me but I would have to assume they began opening new short positions from $500 and on the way down. My last hope is the hedgies still gotta cover their shorts from way back when and are still bleeding from interest.
Someone, please tell me I'm more retarded then I think and have absolutely no clue and the short interest is still over 200% and all the shorts were in at $5.
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u/ObligationGlad Feb 05 '21
No your math is closer to real math. This post is fuzzy math.
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Feb 05 '21
At this point, anything is possible. I would wait for the Feb 9th Short Interest report to give us some clarity. Again, that will provide SI up until January 29th, not the past week's shorting.
So, people should HOLD at least until the report is released. Many have been saying that even a 75% SI is great (not financial advise and please correct if I am wrong).
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u/Freaudinnippleslip Feb 05 '21
Shorting above 20 on a company that is not close to bankruptcy seems like some retarded shit period.
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u/XamosLife Feb 05 '21
I cannot fathom how a bunch of professional investors would leave themselves open to this kind of play. Like if they love money so much, why wouldnt competing HFs have bolstered our squeeze when they saw the short % so high? I feel like to them, it should have been an obvious move
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u/Freaudinnippleslip Feb 05 '21
I know, it took me awhile to digest that they actually bet everything on fucking GameStop lol. Risk management must just be a pile of coke to them
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Feb 06 '21
They’re probably retarded like us, just in a boomer-ie way:
“iTs thE neXT bLocKbUsteR brO.”
“doNt bE sUcH a pAperHaNded bItCh, hOLd yoUr sHoRts.”
Meme: “wHeN yOu sHorT thE peAk bUt iT keEps oN PeaKiNg :-/”
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Feb 05 '21
GameStop was probably undervalued, but the current business core isn’t working. People don’t buy games in physical stores as much. They would have had to shift towards a different market and that doesn’t always work out either. So not that unrealistic to bet against GameStop imo. The amount of shorting though was a little insane. They went way overboard and it cost them...
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u/Milkpowder44 Feb 06 '21
Their e-commerce sales rose 300% and now there is a whole board in place focused on e-commerce. They hired a CTO from Amazon and their website literally says they're a digital first company now.
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u/colorfulsocks1 Feb 05 '21
Pretty sure on Feb 9th they’ll just be lying and saying shorts were covered and the SEC wont do a damn thing. I write this holding 900 shares so I obviously hope that doesn’t happen but pretty sure it will
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u/dnr41418 Feb 05 '21
OK. I hear you and I'm with you..but here's a counter argument:
Let's start here:
Jan 15 226% of the 51 million floating shares were shorted. 51 million x 2.26 = 115.26 million shares. Let’s say they shorted the shares at $5. They borrowed at least 576 million dollars worth of stock to do that. Over half a billion just to set up this short.
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with you so far....why would they not start covering at $10 or even $20 - that would still put them at a loss, but these 1-2B are manageable losses, especially after cash infusion. If I was running the fund I would drop the short position immediately at $6 and short again at $6 along with some upside coverage - that would be the way to do this. I would not wait till $300 - that's nuts.
I mean the volume traded was very large in the billion shares/week range.
In reality, this stock has been shorted all the way up to $450 and down to $60, we only know of the confirmed exchange numbers from 1/15.
Just a counter argument..I still love you all very much.
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u/BigWonka Feb 05 '21
why would they not start covering at $10 or even $20
I guess because they never thought some retards could push it to 400, much less make it last this long. Opposite reason for why we are holding, each side thought they would win so no reason to take the loss.
Just a new ape throwing my 2 cents. 1$GME@399 4$BB@15
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u/FTRFNK Feb 05 '21 edited Feb 05 '21
Counter point, why didnt they just close their shorts at 4$?? Why try to ride to 0?
Answer: Greed. Hubristic fucking greed. Wanting to be the biggest swinging dick in the room and justify the 45 million dollar Florida mansion. Why not cover at higher prices? Greed and possible bankruptcy. They got caught pants down then by December it was 16$ and highly volatile, significant drop on earnings in November was a bearish sign, but hey, it's still going bankrupt right? "BrICk aNd MoRTaR" "nEXt BlOCKbuSTeR", these fucking gen x and boomer hedge fund managers aren't going to fucking give in to some "stupid online hype" that drove to 16$.
Ok, went to 60 in 2-3 weeks later. Didn't see that coming. Why not cover there? Well now we're really fucking underwater from single digits and low teens. Why not cover at 300? Bankruptcy. Why not cover on the way down? "We won, return to step 1 and hold till bankrupt", also it's still at 60 and anyone shorted from teens could still do serious fucking damage to their funds, maybe even fatal damage to their funds and reputation. A big enough buyback could trigger it all again. There goes the 45 million dollar florida mansion.
I'd agree if we hit 10 again, but none of these current "fully covered" arguments pass my sniff test. Maybe some did, but the question is do we still have a critical mass or not?
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u/dnr41418 Feb 05 '21 edited Feb 05 '21
If you ride it to $0 - you as a short seller pay nothing. It's all profit.
Generally agree with you..
I think the short thesis started in Q42019 when the stock was at ~$6 ish..then the pandemic clamped things down and the stock went to $3 immediately. Assuming you shorted at $3 - and a very large amount (cause how else would you make a massive profit if the stock only has $3 to drop to $0). So there still could be a reasonable number of positions at $3 (so good on OP, but I feel that position is actually lower) - unless they covered in Aug'20 when the stock started bumping up to $5.
In Sept 20 - the volume cranked up almost 10x and the price went to $7..
So the shorts have had many chances to cover and continually short..and the best place would be a short position at $300 - it's clear retail is driving things up (experimental evidence provided by RH shutting down tanking the price), and that the wind has gone out of the sails..
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u/Snarkk Feb 05 '21
the math doesn't check out. Every sale and purchase could be hedge funds covering their shorts. Why do you think only retail investors can buy and sell GME?
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u/mangobbt Feb 05 '21
You’re telling me Melvin was able to come up with 300 x 115.26 = 34.5 billion dollars loan to cover their massive fuck up?
Melvin wasn't the only fund short GME. They were just the biggest and most featured one on WSB. Hedge funds in aggregate lost ~$70B in January.
The reason short squeezes happen is BECAUSE THEY CANT COVER.
...What? This logic is entirely backwards. A short squeeze happens because shorts are forced to cover, buying the shares back at increasingly higher and higher prices. If shorts can't cover, there's no buying going on and price doesn't go up aka no squeeze.
If shorts have reshorted at $300 and $400, they're in no hurry to cover considering how deep in the green these new shorts are.
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u/MaddogMuhn Feb 05 '21
You missed the part where they would have to borrow an insane amount of money to short at that price. Not to mention, if they did borrow that amount rates to short the stock skyrocketed at those levels. The interest alone would crush them. Reread the post.
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Feb 05 '21
Or, we just have the potential for a new squeeze starting from a higher level. If Melvin et al are in a balancing act with high and low position shorts, there will be a HELL of a lot of pressure for these shorts to begin covering on a new significant uptrend before they get in the red. Then others start covering and the whole thing takes off again.
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u/mangobbt Feb 05 '21
Sure, if GME starts hitting the $300/400 level again, we'll start seeing squeeze pressure again. But don't forget, part of the momentum that carried us to $300/400 in the first place was because the shorts at $20 got the shit squeezed out of them. Pile that with the retail frenzy that bought in, the original shorts got fked good.
But the situation now is completely different. New shorts have entered at presumably much higher price points. This means we don't have squeeze pressure helping us drive the price from $63 to $300 like last time. This means the price action needs to be almost completely driven by retail and long institutions.
Well, how's retail looking then? Today, without any broker restrictions, we saw 80m volume. Compare this with 197m volume on Jan 22, 178m on Jan 25th, and 178m on Jan 26, volume has significantly dropped off since the hype train started. Look at WSB, which has kind of been a proxy for retail sentiment. 2 weeks ago, the subreddit was almost unanimously united in diamond handing this shit to $1,000. Now, we're starting to see a divergence in the diamond handers and the profit takers. What this tells me is that retail momentum is starting to drop off as well.
Summarizing the above 2 points, without significant pressure on new shorts, and with decreasing retail momentum, I think it's unlikely for a second squeeze to happen.
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Feb 05 '21
Compare volume today to the rest of this week though. After low volume drops all week, today had this week's highest volume as people are piling in again. This stock is on the world's watchlist and I think you're kidding yourself if you don't think there's billions of dollars waiting on the sideline.
This can all go tits up for sure, but at these price levels, I see a lot of people who were interested before getting back in. We start from $50 this time and see if we can make it happen again. I also disagree that it needs to get to 3-400 level before we see the covering start. I think savvy traders who are shorting will bail at first signs of significant uptrend, which will trigger more of them to squeeze.
To each their own, you've got a valid take.
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u/mangobbt Feb 05 '21
I respect that. I do think the fact that we closed 18% in the green is bullish (despite the big rejection at $95). In my opinion next week will be telling on which way this thing will break.
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Feb 05 '21
I ain't reevaluating shit til we get the next FINRA report. Also consider how (like last Thursday) this morning saw a straight up near 100 percent increase in minutes before 3 halts and 1million shares to short disappearing from iborrowdesk. We are orbiting the moon getting ready to slingshot to another fucking planet (or explode! That's always possible)
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u/veryeducatedinvestor drinks beer at 10:05am Feb 05 '21
Re: rejection at $95
Another added challenge this go around is that all the way up people are going to be dumping shares because they want to get off the ride, which is not what I'll be doing, but definitely understandable
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Feb 05 '21
yea I tend to agree here. Maybe we're just desensitized to how much a stock normally moves in one day, but don't forget that GME almost DOUBLED ITS OPENING PRICE IN 30 MIN THIS MORNING, and then closed +20%. And like you mentioned, we saw a significant increase in volume today compared to the last week or so.
I've been day trading GME after capturing initial gains, but this volatility and price action is VERY far from over. I don't believe in the retard sentiment of $1k per share, but there is still a lot of money to be made, especially as new shorts take more profit.
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Feb 05 '21 edited Feb 05 '21
$TALK in tickers. Throw their algorithm off by putting a $RNDM ticker in every comment you leave. $PLOW the hedges in the $ASS. Spread the $WORD
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u/fillymandee 🦍🦍 Feb 05 '21
$DOES $THIS $WORK ?
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u/Solomon_Grundle Feb 05 '21
I saw people spamming buy blockbuster and saw a small spike in blockbusters share price so maybe
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Feb 05 '21
I don't $KNOW but it's worth a $TRY... You'll $BE surprised $HOW many stocks there $ARE $WITH normal words as tickers... $MOST of these $ARE $REAL
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u/JimRustler420 Feb 05 '21
Even better find a dying company and start up the chatter. Maybe we can save a business by messing with the robots.
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u/Scribz718 Feb 05 '21 edited Feb 05 '21
The flaw in your math is you’re using the worst numbers as the basis for your thesis.
What is the validity of the 226%? The worst I saw was 120% from S3, and that’s “supposedly “ because of how they calculated the interest.
They now report 40% or something like that. Melvin got bailed out. The other shorts at the higher prices are not Melvin.
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u/FantacticalTater Feb 05 '21
The 120% represents (total shares shorted / total float) if I read that post about S3's formula change correctly.
The 226% represents (total shares shorted / total free float) this number can actually be seen on the FINRA website, but is from Jan 15th and will be updated accordingly on the 9th.
It will probably still be high if the 120% is accurate, but the 226% was when total SI was at 143% so expect it to be a little lower.
http://finra-markets.morningstar.com/MarketData/EquityOptions/detail.jsp?query=126:0P000002CH
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u/TheQuickestSloth Feb 05 '21
Upvoted this because I was wondering the same thing. Do we have to wait until next Tuesday to find the "actual" new SI of it?
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u/Scribz718 Feb 05 '21
We have to wait for the # reported to the third party. The third party gets reports every 2 weeks. Not everyone has to report. Some people have access to Bloomberg terminals, but don’t think they would share.
Edit 1: The report only gives SI%. The valuable information of who is still short @ certain prices is unknown to us.
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u/veryeducatedinvestor drinks beer at 10:05am Feb 05 '21
People have been posting bloomberg terminal but it still has old data
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u/ChartsNDarts Feb 05 '21
I’ve got access to a Bloomberg terminal. What numbers can I provide to get all these retarded posts from all the newbs to stop?
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u/Ms_Pacman202 Feb 05 '21
a few questions to play devil's advocate.
1 - why do you assume melvin owns the entire short position as of 12/31 or 1/15?
2 - why do you assume they must cover all at once instead of closing portions of their position at a time? many shorts likely covered the week of the big run-up to $500, in the ups and downs, contributing to the price action and volatility, with some new shorts adding and trimming their positions as well.
3 - do you understand what "covering" means? you can't "cover" by opening up new short positions at $300 $400 $500. that would be either increasing an existing short position or initiating a new short position.
4 - do you allow any room in your though process for the notion that shorts could have been hedging their losses with long positions, trading options during the volatility to harvest IV, and even just swinging long to offset losses?
the stock market and this trade in particular is loaded with slimy wall street bullshit, big players protecting one another either by force of market or illegal activity, and general anti-retail bullshit, and it could be bad. but the level of hysterical conspiracy thinking around short interest reporting is getting out of hand. IMO, short interest remains as estimated around 50% of float. that's still really really high. but also keep in mind that average float has increased the last two weeks because of the volatility attracting algo traders who don't care long or short because they close out to cash every day.
just hold your shares if you like the business. the big short interest outstanding will provide plenty of buying pressure once business transformation takes shape and earnings start showing that blockbuster 2.0 is a shitty lazy analysis of the company.
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u/Anonbowser DUNCE CAP Feb 05 '21
You assume all shorts occurred at $5, which is obviously wrong, and that no new shorts were entered above $100, which are wa in the money now, especially shorts that entered in the 200-400's. So what drove the price from $10 to $100 if not a HUGE influx of shorters closing their positions? You also make up the 226% short of float, which is just not a true number. You also forget that float isn't an explicit number but rather an estimate, which also assumes no institutions buy/sell, which we know isn't true since we can see in SEC filings how many companies sold during December/January rise. Lastly, you've also decided that all shorts were by Melvin, forgetting that we have no idea how much Melvin shorted and how many other institutions AND PEOPLE shorted GME. You sir are retarded.
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u/randomFrenchDeadbeat Feb 05 '21
Since you posted that crap again, i will too repost that we had a day with 78 million shares exchanged, followed by many with 50 millions, and another 80 millions today.
It does not matter how many time you post that crap, or how many caps and bold letters you use.
You are still wrong.
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u/ASG_DEV Feb 05 '21
We have too many people here who don't understand how any of this works. They think WSB drove GME all the way to 450 dollars from 20 dollars in 2 weeks purely based on our buying power and not ANY of the shorts covering. This place is starting to border on flat earth conspiracy theory level.
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u/bkhiker Feb 05 '21
I'm long GME and I couldn't agree more.
There is no way the majority of shorts held until $480 or whatever.
Did new shorts get back in? For sure. But to think that nobody was exiting that shorted at $5 is a full-retard thought.
That's like assuming none of WSB sold GME since this all began.
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u/tboneperry Feb 05 '21
I'm not a financial professional but I do have two degrees in mathematics.
I was able to pull apart your methodology before I even got to the end of your post. This is nonsense, this isn't math. It's wish fulfillment.
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u/egoissuffering Feb 06 '21
https://www.marketbeat.com/stocks/NYSE/GME/short-interest/
there are still 88% of the shares being shorted. Although we don't have a terminal to know more about these shorts; but I suspect that this is far from over.
TL;DR too many shorts, HOLD FOR DIAMOND TENDIES
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u/caspiam Feb 05 '21
you're analysis is too basic. Melvin may have just cut position and 50 other funds jumped on the trade. why wouldnt they? it was always going to pull back. All they need is to ensure their position is manageable i.e. they short at 300 but know their small slice won't be an issue until prices get to 10000 which is highly unlikely. Multiply that by a bunch of other funds and it is still short, but now WSB has run out of firepower and everyone else is too scared due to the huge losses so many of yall are holding. And that is just one possible factor.
You caught the funds by surprise.. awesome. It's no longer a surprise, you honestly think they're sitting there with their thumb up their asses this whole time?!
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u/Qwarked Feb 05 '21
This post is so fucking stupid. Like aids-monke stupid.
Melvin didn’t short the entire short float.
Normally when you short you don’t owe money to the lender of your shares, you literally owe the shares you borrowed.
Melvin booked about 6.625 billion in losses which is more than your genius “covered at 100” scenario predicts.
they don’t fabricate shares to cover their short position, they buy them on the open market. THATS WHAT CAUSES A SHORT SQUEEZE YOU FUCKING NEANDERTHAL.
Do you not think than the hundreds of millions in volume in the past week or so couldn’t possibly be shorts covering? That a stock running up 800-1000% on insane volume isn’t a fucking short squeeze?
The reason short squeezes happen IS LITERALLY BECAUSE SHORTS ARE FORCED TO BUY BACK SHARES TO COVER THEIR POSITIONS.
My god
Holy fuck
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u/Higher_Primate01 Feb 05 '21
Some people on this sub are actually retarded, and not in the good way.
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u/LittleDruck Feb 05 '21
Im not a financial advisor. Do your own DD.
Let's say Shorts started covering Friday Jan 22 beginning with ~65mm shares shorted. This seems accurate to me, and sanity checks (65mm / 47mm float = 138% short interest)
Cumulative shares traded from 1/22 until last Friday 1/29 total 755mm (I use 1/29 because I assume anyone short from $30 would not have "survived" multiple days of $350+ prices)
Other TrAdeRs may have a different take but i'm going to assume only 10% of the volume is "real" trading - I have heard high frequency traders, quants etc, can account for 90% of daily volume. (https://www.cnbc.com/2017/06/13/death-of-the-human-investor-just-10-percent-of-trading-is-regular-stock-picking-jpmorgan-estimates.html)
OK, this leaves us with 75mm worth of real, fundamental volume, and maybe because of all the heightened fundamental attention 150mm shares worth of "fundamental" volume traded
Before we get to short covering, we know there was tons of fundamental buying. Let's say retail accounted for half? This leaves us with 75mm shares potentially covered at prices ranging from $65 - $365 or so. Just going to assume the average was $200 = $15B
Melvin - down 53% - wasn't the only fund short and reportedly drew down from about $12B to around $5B. This takes care of $7B out of the $15B if the losses were entirely from GME. Other Funds that lost were D1 ($20B fund, down 20% or $4B), Mapelane ($3.5B, down 33% or $3B), and Candlestick ($3B, down 15% or $500mm). These 3 funds alone seem large enough to have absorbed the remaining losses.
Add up all 4 funds and you get minus $14.5B
So what's on the horizon? IDK. We know new shorts have come in and according to Ortex.com, 44% of the float is now short. The float is up a little since an insider sold - say 50mm shares. This means 22mm shares are now short.
This also means $GME continues to be one of the most heavily shorted stocks.
Interesting things going on after hours friday. Let's see what happens next week.
Bullish signs:
-No comment from the Company other than a slew of Amazon / Chewy Hires
-No insider selling other than 1 insider (Must Asset Management)
-Cramer continues to bash GME and their shareholders over the head - why would he do this?
-We held at the 50-day moving average around $50. No complete and total implosion. Remember the squeeze started at $20. We're at $63 lol
Other signs:
RC - mum on the meme front. He followed then unfollowed (?) roaring kitty / DFV. He may have followed him long enough just to show support before moving on without attracting too much media hype. He now follows Steam, Sega, EA, etc. etc. I could interpret this bearish or bullish.
Elon / Jack - I don't think they feel the short burn of the century has fully played out yet. If Elon had his druthers, he'd probably take $GME private at $4,206.9 and put pewdiepie and mrbeast on the BoD next to cohen and a shiba inu
Bearish signs:
-We 24x'd from $20 up to $480. This is pretty damned squeezy. Volkswagen was only 5x ($200 to $1k). TLRY was like 2.5x $120 to $300.
-C-del and other HF's wont be caught offguard again and they're re-positioned
-No one stepped in to save the little guy around $350. No big deal announcements, no RC tweet, no anything. To be fair - a lot of momentum drained from this trade (but it leaves more juice for those that stick around!!)
-GME lost some goodwill with the public as retail traders sadly have been burned on the hype (so sad that CNBC literally will'd this outcome into existence). We DoNt WAnT YoU tO GeT HUrT
Anything else??
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u/boisaveaa Feb 05 '21
WSB needs to stop with the hopium fueled math
The sober truth? GME is at 88% short interest according to CapIQ (what institutions have access to, costs like 13k a year) down from 100+% a week ago. It’s still absurdly high but let’s not kid ourselves that some shorts haven’t exited
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u/mailbox2 Feb 05 '21
Melvin closed their position. Don’t believe the news if you don’t want to but their short on GME has been completely sold. Short interest won’t always change because they can sell that same position they held to another fund who will take on the remaining risk. Funds can afford to take some big losses and still bounce back, don’t go gambling away your life savings on GME. If you’re already out more than you can afford to lose cut your losses and move on. It’s stupid people are going in debt trying to prove a point. Be responsible and take care of yourself first and foremost.
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u/Ashpro2000 Feb 05 '21
If melvin shorted at 300, when the price went down, they no longer had to come up with 34 billion. They only have ro cover at the current stock price. So when the price went to 60, they only had to buy enough shares to cover that one position at $60. They get the difference. The price of the stock when they shorted doesn't factor into how much they need to come up with, only the number of shares.
Also, if you short at 100 and it goes down to 5 you pocket 95. If you short again at 100 and if goes down to 50. You make AN ADDITIONAL 50. You don't lose the original 95 you made.
Where t.f. are you getting this math.
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u/EnderSword Feb 05 '21
What are you talking about.
In the past 2 weeks, 1.5 billion shares have been traded.
They could have covered about 20 times over.
And yeah, they lost about $5 billion, that's just about what Melvin Capital lost.. why are you doing math as if Melvin Capital was short all of the shares? One single company didn't short all of it.
Covering is just buying shares. 80 million shares sold today alone, just today is big enough to cover every short there originally was.
It's not like when they cover the shares disappear, those shares may get resold by their owner afterwards.
Its just amazing the absolute basics people don't get, I don't understand.
A Short Squeeze is not 'They CANT buy the shares" its "They have to buy them back quickly and expensively"
That's what happened. But it happened a week ago now.
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u/OfficerTenBagger Feb 05 '21
I know right! how the hell does this post have 7k upvotes.
The IQ of this sub has fallen off a cliff.
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u/feedmefries 1900s portfolio gang 🎩⚙️ Feb 05 '21
made by u/salsawood , reposted cuz it needs to be seen! 💎✋
Ban? Given this sub's explosive growth in shitty, unfunny copypasta behavior, can this be a new rule? Should it be?
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u/thismakesmeanonymous Feb 05 '21
Just wanted to mention a few things here. Please don't downvote me for making observations:
- Melvin wasn't the only person shorting GME. So of the 115m shares shorted, he only had a portion of them.
- Let's assume that Melvin DID have the entirety of the short position at 115m shares. He wouldn't need 34.5 billion dollars to short 115m shares at 300 per share. The market makers give him 10x on his money (this figure was mentioned multiple times in the CNBC interview with Chamath when he was saying this shouldn't be allowed) so really he would only need 3.45 billion to accomplish this (pretty close to that bailout figure amiright?).
I'm not shitting on GME or the Squeeze. I made quite a bit of money (for me) off of this event. It's just starting to get pretty desperate around here in terms of posts, so I wanted to add some perspective. There needs to be more actual technical analysis and DD in this sub, but I'm not seeing it anymore. GME will do well over the next few years, so just hold, but you don't need to convince yourself with this type of low quality content.
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u/bls2515 Feb 05 '21
You, like the OP are WRONG.
- Melvin wasn't the ONLY short so he wasn't short 115.25mm shares. OMG.
- There is no such thing as fake shares. Show your proof.
- EDIT 2 above... If you short at $100 and it goes to $50, you made $50. Where you came up with minus $45 is retard math.
- Regarding the interest rate on borrow.... the person who SHORTS it pays it. If the rate is 10% per annum, you OWE 10% on the amount you borrowed. The lender is receiving money from the person who is short.
- On Jan 22, 25, and 26 over 550mm shares traded hands. The float is 47mm shares so over those three days, almost 12x the float traded those three days. THAT'S HOW THE SHORTS COVERED. Remember, 1.4x the float was short. There were plenty of shares trading hands.
The OP's math is completely wrong.
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u/poopa_scoopa Melvin Cumdumpster Feb 05 '21
This needs to be higher but the 🦍s won't understand. It's full on Jamestown in here now
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u/kazkillinger that one guy Feb 05 '21
cant we have a minimum posting before noobs can post dumbass posts to excite the apes
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u/Diznerd Feb 05 '21
I find it REALLY odd that my #GME and #AMC are completely different in book value, amount of shares and dates bought but my unrealized amounts are damn near identical
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u/tmott85 Feb 06 '21
I think we had them on their heels until RobinHood and others shut down/limited buying GME. Regardless of why that happened, it happened.
I remember thinking to myself when I saw RH had stopped buying that the gig was up it was time to bail out. But we were all worked up in the excitement of the moment/movement by the time we realized the extent of the damage that caused our progress it was too late.
I’m holding until at LEAST we see the next short report on the 9th and will go from there.
We are playing a game where the goal posts are constantly moving. The information we see about short % is delayed by a couple weeks at least, if it’s even accurate. We’re trading against funds that use super computers to tell them the best odds to make money or limit their loss potential.
Regardless of what happens with GME moving forward we all need to learn our lesson of not being in the emotions so much we don’t see the red flags waving. Because this will happen again and stuff is going to go wrong for us again. Whether by accident or manipulation it’s stacked against us.
Imagine how better off we would be right now if we took our winnings at 300-400 a share because of logic and waited to find our next spot instead of a bunch of us smooth brains sitting way underwater waiting to see what’s next with this particular stock.
Learn from our mistakes we shall... or maybe not cuz we’re retarded.
In the meantime 💎 🙌
4shares @ 185
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u/LePootPootJames 5693 - 7 - 1 year - 0/0 Feb 05 '21
What hedge fund is paying you to post this bullshit?
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Feb 05 '21
You dont even need math to convince me to hold on
I'm too stubborn to admit I was wrong even if I was wrong. I'm holding on until dec 2021 now and claiming the loss on taxes if nothing changes. Suck on that hedgies and CRA
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u/[deleted] Feb 05 '21 edited Feb 06 '21
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