SOOPOO
SOOPOO
Joined: Aug 8, 2010
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January 30th, 2021 at 8:37:12 AM permalink
dark.... have a friend who loans out his shares in a small company for a fee..... the brokerage does NOT do it without his permission.... Are you saying brokerages loan out shares without the knowledge or consent of the owners of the shares? (I'll bet if they do it is probably in the fine print of your brokerage agreement...) If so, why do they pay my friend to borrow his?
TDVegas
TDVegas
Joined: Oct 30, 2018
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January 30th, 2021 at 8:55:51 AM permalink
Quote: Hullabaloo

Shark Tanks Kevin O'Leary:
(about shorting)

“You now run a new risk: that these effective social media vigilantes are going to come after you and squeeze you as a short,” O’Leary said, a reference to the popular Reddit forum WallStreetBets. “That’s going to make a lot of hedge funds think a second time before they try and go short stocks, which I think is great.”

I agree.


Yep. No question. Guys like famed short seller Jim Chanos (TESLA) will think twice before they go on any financial news network spouting about their latest short.

Good.

Not only was he wrong on Tesla...but he had free reign to trash the company unfettered. Mark my words, he will now be silent.
darkoz
darkoz
Joined: Dec 22, 2009
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January 30th, 2021 at 9:00:58 AM permalink
Quote: SOOPOO

dark.... have a friend who loans out his shares in a small company for a fee..... the brokerage does NOT do it without his permission.... Are you saying brokerages loan out shares without the knowledge or consent of the owners of the shares? (I'll bet if they do it is probably in the fine print of your brokerage agreement...) If so, why do they pay my friend to borrow his?



Yes, it's buried deep within their terms that they can do it so from a legal perspective they have received your permission

Most investors would not be happy to lend out shares to people actively hoping for their failure imo.

It would be like betting pass line, loaning some guy chips to put on don't pass and then he screams at the shooter "YOU'RE GONNA FAIL, CRAP OUT MAN CRAP OUT"

Would you keep loaning that guy chips?

(Maybe not the greatest analogy but until something better comes along)
For Whom the bus tolls; The bus tolls for thee
Hullabaloo
Hullabaloo
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January 30th, 2021 at 10:05:10 AM permalink
I've had stocks that Citron shorted. They don't just short it, they bash it too. They wrote a big article stating a bunch of problems, many of which were completely false.

I found this online today:

"Melvin Capital has closed out of its short position in GameStop, incurring billions of dollars in losses. Citron said by video it has closed out of most of its GameStop short position at a 100% loss 3 days ago"

I have no idea if it's true, and there are indications that Citron is lying.

As for Robin Hood, they are claiming they had to do what they did because of regulatory requirements. Who knows if that's true, but it looks pretty sleazy no matter what since shorts could continue while buyers could not. And it probably isn't a coincidence that one of the shorts was a major backer for Robin Hood.

And I've also read through a lot of wallstreetbets on reddit and it appears this isn't just a short issue, it's far more than that going back to the Great Recession and more. Back then the banks screwed up big time, yet the treasury made them whole and not a single person was indicted for their malfeasance. And everything is set up so the "big boys" can run the show, and also have all kinds of perks to make sure they pay very little in taxes. Meanwhile, scores and scores of Americans got waked and lost everything. So part of this is an attempt to give "regular folks" a chance.

I don't see this ending anytime soon unless regulatory agencies do something, which would seem to be good for retail investors.
lilredrooster
lilredrooster
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January 30th, 2021 at 10:33:08 AM permalink
......................


manipulation of the market, as apparently was done in this instance is flat out wrong - and there should be punishment for market manipulation
and the big guys should never have a significant advantage - I don't know if that will ever change

but to me if shorts are not allowed it's kind of like this:

the Chiefs are -3.5 in the Super Bowl

so the book says to you - you can bet the Chiefs to win but you can't bet on the Chiefs to lose (or the Bucs to win)

you can take your money out after you win if you win
or if with 5 minutes left and its very likely you will lose we will sell your bet to someone and you can get some of the money back

shorts ensure that the price is related to earnings, prospects, debt levels, revenue, etc.

without them it seems like everybody would be betting on numbers that are not related to anything

if this guy - Chanos - is touting shorts that shouldn't be shorted the stock will go up and he will get creamed as will everybody who listened to him
the truth will eventually come out

and he will lose his credibility and his audience





and what about put options - the bet that a stock will go below a certain point
in a market without shorts would put options also not be allowed?



*
"𝘣𝘦𝘭𝘪𝘦𝘷𝘦 𝘩𝘢𝘭𝘧 𝘰𝘧 𝘸𝘩𝘢𝘵 𝘺𝘰𝘶 𝘴𝘦𝘦 𝘢𝘯𝘥 𝘯𝘰𝘯𝘦 𝘰𝘧 𝘸𝘩𝘢𝘵 𝘺𝘰𝘶 𝘩𝘦𝘢𝘳"______Edgar Allan Poe
Wizard
Administrator
Wizard
Joined: Oct 14, 2009
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Thanks for this post from:
teliot
January 30th, 2021 at 10:58:48 AM permalink
Quote: TDVegas

99% of day traders lose money....unless you listen to the forums. Then 99% make money.



I can believe that. I have yet to meet the person who loses at raked poker ... but somebody must be.
It's not whether you win or lose; it's whether or not you had a good bet.
teliot
teliot
Joined: Oct 19, 2009
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January 30th, 2021 at 11:16:32 AM permalink
Quote: Wizard

I can believe that. I have yet to meet the person who loses at raked poker ... but somebody must be.

Every poker player plays an above average game.
Poetry website: www.totallydisconnected.com
billryan
billryan
Joined: Nov 2, 2009
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January 30th, 2021 at 11:19:20 AM permalink
I don't believe that 99% of day traders lose money. What I've found is people usually give up a good job to day trade, find it is more work and much harder than they realized, come to appreciate the benefits their job offered and return to work. It's not that they lost money, it's that they can make more elsewhere.
I'd imagine those that lose out were under-funded and shouldn't have been in the game in the first place.
TDVegas
TDVegas
Joined: Oct 30, 2018
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January 30th, 2021 at 11:31:48 AM permalink
Quote: billryan

I don't believe that 99% of day traders lose money. What I've found is people usually give up a good job to day trade, find it is more work and much harder than they realized, come to appreciate the benefits their job offered and return to work. It's not that they lost money, it's that they can make more elsewhere.
I'd imagine those that lose out were under-funded and shouldn't have been in the game in the first place.


I doubt it. As soon as they go long or short, they are already fighting and at a disadvantage to the spread. Throw in short term capital gains taxed as regular income, under funded, etc....and I would believe 95% to 99% fail.

Hell, even Warren Buffet admits he would go broke trying to day trade. Yet Johnny Stockman makes a go of it? Rare individual makes it, imo.
TumblingBones
TumblingBones
Joined: Dec 25, 2016
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January 30th, 2021 at 2:43:47 PM permalink
FWIW, the guy credited with starting the ball rolling, Kieth Gill a.k.a. Roaring Kitten, is neither an amateur nor a day trader. From what a saw on his YouTube videos he comes across a mensch and pretty smart. It's worth checking out the 10 minute video where he explains his approach to investing. There's also one from back in August where he goes in to detail on why GameStop is a good bet.
My goal of being well informed conflicts with my goal of remaining sane.

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