TwoCitiesCapital Posted January 27, 2021 Share Posted January 27, 2021 What happens if Melvin has to file bankruptcy? Why? They just had a $2.75 billion infusion. Unless all their other shorts are getting blown out too? If they didnt close their position they have a problem. Yup - that $2.75 billion goes quickly when it's going up 100% every day. Just consider that it's 10x over the 5-days. Whatever their position was a week is, it's now 10x larger if they didn't reduce. And tomorrow? If it doubles again? Now it's 20x what it was a week ago. I don't care how many billions they're raising - they're not going to be able to keep up with that activity for more than a few days. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 27, 2021 Share Posted January 27, 2021 Note from broker: just an FYI ( I have no positions in this mess but they are adjusting margins) “Effective after market close on January 27th, the margin requirement on long positions of GME (Gamestop) will increase from 30% to 100%. Margin requirement for short positions will increase from 130% to 200%.” Question is, who will this affect more? I dont' think it affects anyone right now. All those guys who bought on margin using leveraged calls are rolling in it and the MV of the position certainly supports whatever increase in current margin requirements are going to be had (assuming GME isn't the only thing they own). That being said, where it will bite them in the ass is on the way down as margin availability will be decreasing 1:1 for with the stock price. Link to comment Share on other sites More sharing options...
alpha Posted January 27, 2021 Share Posted January 27, 2021 with options expensive, has anyone risked just straight shorting this at this point of 300+ price? I saw a Bloomberg headline this AM suggesting Citron and Melvin had both covered. So at this point, what is supporting it at $380 instead of the $17 it traded at just 3-weeks ago before this orchestrated manipulation occurred? I would expect now that the thesis has played out - and now the short squeeze forced - people would dump the shares to collect the "tendies"? Why is this still going higher? It looks like the wallstreetbets subreddit has gained over 1.2 million subscribers in the last 48 hours (1.9m to 3.1m). It's just a mob mentality throwing money at the wall because they see their friends making money. At some point the trend will reverse when players start realizing their gains and price will drop as fast as it went up... your guess is as good as mine when that happens but I think it's obvious it will be sooner rather than later, especially if government checks are delayed... Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 27, 2021 Share Posted January 27, 2021 with options expensive, has anyone risked just straight shorting this at this point of 300+ price? I saw a Bloomberg headline this AM suggesting Citron and Melvin had both covered. So at this point, what is supporting it at $380 instead of the $17 it traded at just 3-weeks ago before this orchestrated manipulation occurred? I would expect now that the thesis has played out - and now the short squeeze forced - people would dump the shares to collect the "tendies"? Why is this still going higher? It looks like the wallstreetbets subreddit has gained over 1.2 million subscribers in the last 48 hours (1.9m to 3.1m). It's just a mob mentality throwing money at the wall because they see their friends making money. At some point the trend will reverse when players start realizing their gains and price will drop as fast as it went up... your guess is as good as mine when that happens but I think it's obvious it will be sooner rather than later, especially if government checks are delayed... Ok - so lets assume this whole thing is shortsqueeze/gamma trade. The short-squeeze is probably approaching exhaustion leaving primarily new entrants and the gamma trade. Could you not, theoretically, exhaust the gamma trade by having a similar group of people buying a ton of OTM puts? Buy selling the puts, the market makers are theoretically taking on some long-exposure in the stock which offsets their need to buy the physical shares in the open market. As the upward momentum slows, fewer new entrants by the name further reducing need for market makers to buy new shares. The support for the gamma trade erodes and nothing is supporting this at $300. Should we all be buying OTM puts now to offset/reverse the market perversion this has become? The potential intrinsic value of these things has to offset the volatility/time decay priced in at some point, right? Is it market manipulation to coordinate an effort to offset market manipulation? Lol Link to comment Share on other sites More sharing options...
lessthaniv Posted January 27, 2021 Share Posted January 27, 2021 Yeah, not sure how many of the WSB buyers are long with Margin. Some might be forced to sell positions but that markup is going to be tough on any remaining shorts. Its an old fashion standoff. Link to comment Share on other sites More sharing options...
Castanza Posted January 27, 2021 Share Posted January 27, 2021 The average Robinhood account is only 6.9k (ironic I know). Most of these individuals don't have day trading accounts. So there is some limitation to how many times they can day trade. Link to comment Share on other sites More sharing options...
Sunrider Posted January 27, 2021 Share Posted January 27, 2021 (deleted - had it the wrong way around) Link to comment Share on other sites More sharing options...
Jurgis Posted January 27, 2021 Share Posted January 27, 2021 To paraphrase Sanjeev's sig: No company is bankrupt that has WSBs! Link to comment Share on other sites More sharing options...
no_free_lunch Posted January 27, 2021 Share Posted January 27, 2021 It has traded over 70m shares today, at prices generally at or above $300. That alone is $21b of purchases. Where are all these funds coming from? This is too much to be WSB. How can people be making large purchases of this knowing the downside is like 90%+. Link to comment Share on other sites More sharing options...
Nomad Posted January 27, 2021 Share Posted January 27, 2021 Not the Onion: Biden administration is "monitoring" the GME situation Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 27, 2021 Share Posted January 27, 2021 It has traded over 70m shares today, at prices generally at or above $300. That alone is $21b of purchases. Where are all these funds coming from? This is too much to be WSB. How can people be making large purchases of this knowing the downside is like 90%+. At this point you know the HFT are in on it too - especially since Robinhood sells the orderflow to Citadel.... Who was coincidentally part of the consortium that bailed out Melvin Capital.... Link to comment Share on other sites More sharing options...
Patmo Posted January 27, 2021 Share Posted January 27, 2021 Not sure why so many people on here are so keen on shorting this, you're literally just gambling your money against the greatest degenerate gamblers on earth. What could possibly go wrong? Link to comment Share on other sites More sharing options...
clutch Posted January 27, 2021 Share Posted January 27, 2021 Not sure why so many people on here are so keen on shorting this, you're literally just gambling your money against the greatest degenerate gamblers on earth. What could possibly go wrong? Maybe, maybe, people on here are also degenerate gamblers. ::) Link to comment Share on other sites More sharing options...
Castanza Posted January 27, 2021 Share Posted January 27, 2021 Not the Onion: Biden administration is "monitoring" the GME situation Even Citron spoke out against this Link to comment Share on other sites More sharing options...
wescobrk Posted January 27, 2021 Share Posted January 27, 2021 Tilson sent an email today that this and 24 other stocks will top out today. Timing daily moves and saying "today is the top" is such a ridiculous statement. The institutions that short seem so arrogant I understand the sentiment behind Wall Street bets and others. Link to comment Share on other sites More sharing options...
KCLarkin Posted January 27, 2021 Share Posted January 27, 2021 For those enjoying the WSB/GME show, I recommend reading John Brook's description of the Piggly Wiggly corner: https://www.amazon.ca/Business-Adventures-Twelve-Classic-Street/dp/1497644895 Link to comment Share on other sites More sharing options...
chrispy Posted January 27, 2021 Share Posted January 27, 2021 Tilson sent an email today that this and 24 other stocks will top out today. Timing daily moves and saying "today is the top" is such a ridiculous statement. The institutions that short seem so arrogant I understand the sentiment behind Wall Street bets and others. Agree Link to comment Share on other sites More sharing options...
stahleyp Posted January 27, 2021 Share Posted January 27, 2021 Tilson sent an email today that this and 24 other stocks will top out today. Timing daily moves and saying "today is the top" is such a ridiculous statement. The institutions that short seem so arrogant I understand the sentiment behind Wall Street bets and others. Agree Dude, the guy is an investment legend. How could he be wrong? Link to comment Share on other sites More sharing options...
Libs Posted January 27, 2021 Share Posted January 27, 2021 It's amazing to see the value of GME puts go up today. Can someone tell me what I'm missing here. ATM options: Sell 1 contract April 16 320 Call= $17,500 Sell 1 contract April 16 320 put = $21,000 Total premiums collected $38,500 Outcomes: Stock goes to zero, you make $38,500 - $32,000 = $6,500 Stock doubles, ( sp $640) you make $38,500 - $32,000 = $6,500 Anything between 0 and $640 you make between $6500 and $38,000. So the stock has to go over $700 before you lose money. Right? Link to comment Share on other sites More sharing options...
spartansaver Posted January 27, 2021 Share Posted January 27, 2021 Tilson sent an email today that this and 24 other stocks will top out today. Timing daily moves and saying "today is the top" is such a ridiculous statement. The institutions that short seem so arrogant I understand the sentiment behind Wall Street bets and others. Agree Dude, the guy is an investment legend. How could he be wrong? He bought NFLX below $10 Link to comment Share on other sites More sharing options...
stahleyp Posted January 27, 2021 Share Posted January 27, 2021 Tilson sent an email today that this and 24 other stocks will top out today. Timing daily moves and saying "today is the top" is such a ridiculous statement. The institutions that short seem so arrogant I understand the sentiment behind Wall Street bets and others. Agree Dude, the guy is an investment legend. How could he be wrong? He bought NFLX below $10 Freakin' legend. Link to comment Share on other sites More sharing options...
aws Posted January 27, 2021 Share Posted January 27, 2021 It's amazing to see the value of GME puts go up today. Can someone tell me what I'm missing here. ATM options: Sell 1 contract April 16 320 Call= $17,500 Sell 1 contract April 16 320 put = $21,000 Total premiums collected $38,500 Outcomes: Stock goes to zero, you make $38,500 - $32,000 = $6,500 Stock doubles, ( sp $640) you make $38,500 - $32,000 = $6,500 Anything between 0 and $640 you make between $6500 and $38,000. So the stock has to go over $700 before you lose money. Right? Yeah, the math is right. I've made bets like that before and sometimes they are good, and other times they go spectacularly bad. The big risk is if you get assigned on the short call, which will happen way before your 700 breakeven price. Like if the stock goes to 500 and the borrow fee explodes, then all deep ITM calls will get assigned, even super long dated ones because there will be no time value left. After that you have to hope to be able to hold the short open while the borrow rate is exploding higher. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 27, 2021 Share Posted January 27, 2021 I think it's closer to a Tilray than a VW. TLRY topped out at 300.00 exactly. Maybe GME will do something close to that. The shares outstanding of GME is about the same as it was for TLRY too, topping out around $25b market cap. Just going to point out that if today's high of $370-ish holds, the market cap topped @ 26B and this dude nailed it. Link to comment Share on other sites More sharing options...
adesigar Posted January 27, 2021 Share Posted January 27, 2021 I think it's closer to a Tilray than a VW. TLRY topped out at 300.00 exactly. Maybe GME will do something close to that. The shares outstanding of GME is about the same as it was for TLRY too, topping out around $25b market cap. Just going to point out that if today's high of $370-ish holds, the market cap topped @ 26B and this dude nailed it. It might continue till Friday because of Options Expiration. Link to comment Share on other sites More sharing options...
lessthaniv Posted January 27, 2021 Share Posted January 27, 2021 I think it's closer to a Tilray than a VW. TLRY topped out at 300.00 exactly. Maybe GME will do something close to that. The shares outstanding of GME is about the same as it was for TLRY too, topping out around $25b market cap. Just going to point out that if today's high of $370-ish holds, the market cap topped @ 26B and this dude nailed it. Tomorrow we should see the net affect of the margin changes too GME, AMC and BB - all dropping in after hours so far Link to comment Share on other sites More sharing options...
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