You say this, and then it’s reported that funds are bleeding out $800M-$1B per day when GME and AMC rally, so ¯\_(ツ)_/¯
https://www.bloomberg.com/news/articles/2021-06-01/amc-games...
https://www.bloomberg.com/news/articles/2021-06-01/amc-games...
There are a lot of outright shorts. But there are also a lot of shorts for other reasons, and those people aren’t bleeding.
Nothing you have said indicates you understand professional options markets.
Are there any resources or books or anything you'd suggest checking out? Right now I'm definitely at an early "learn as much as possible" stage and would love to hear any suggestions you might have on how to get exposure to this world.
Thanks.
Presuming it’s the latter, I would start here: https://reddit.com/r/Superstonk/comments/nwqaj0/gme_moass_th...
That’s a link to a comprehensive beginner’s guide covering the GME saga so far, and offers plenty of supporting research in favour of a further potential squeeze. I hope it’s a useful starting point for you, assuming that’s what you were asking after!
I guess one goal would be to be able to walk into a trading role at a hedge fund (long/short probably? Also curious about macro strategies) and be at a decent starting point to hit the ground running
Then using what you've learned in your textbook, just keep your book hedged, without any opinion. Watch how your greeks change, and how that corresponds with your risk and pnl. Most people only really end up learning on the job. I didn't "get" options until I started running some risk and making some money. But that only happened when I first started working.
Now of course you want to do both, because ultimately you'll want to know why vols are trading where they are, which will be determined by the behavior of the underlying. But at first you just want to get a qualitative sense of how all the pieces fit together. Then once you do, you can do you fundamental analysis and incorporate that thesis, and start to develop a vol thesis.
One of the most well-known contributors at Superstonk is a former Citadel employee — he’s even spoken publicly about these events in an interview with CNBC. I think that makes him less of a “rando” than an otherwise-anonymous career hedge fund trader, who just happens to support your viewpoint.
There are experts on both sides. Nobody knows what’s going to happen. We’ll see!
>One of the most well-known contributors at Superstonk is a former Citadel employee
Source for both of these?
And here’s Dave’s interview with Superstonk: https://youtu.be/AYct0XX0uTU
—
As for “plenty” of career hedge fund traders: I’ll accept “plenty” is a bit of a meaningless word here. Given the anonymous nature of Redditors, I’ll struggle to give you any meaningful identities.
Anecdotally, however, I’ve come across quite a few who claim to be professionals, and were accompanied by some kind of reasonable evidence to back it up. /r/DDintoGME has often brought attention to these people.
There have been several professional traders providing regular updates from their corporate Bloomberg Terminals [1].
Michael Burry, famed investor from “The Big Short”, held a long position on GME [2]. I think he sold it last year, but his tweets have been very bullish about the prospect of a market crash and accompanying MOASS resulting from Wall St being overleveraged. Take this one with a pinch of salt.
Perhaps, most tellingly, there are plenty of major hedge funds — including Blackrock and Vanguard (both of which are full of career traders!) — who seem to think it’s worth holding [3].
[1] https://reddit.com/r/Superstonk/comments/nzyh7f/14062021_gme...
[2] https://www.reddit.com/r/investing/comments/cthume/dr_michae...
I've not argued for/against GME. I've just argued against the conspiracy theories. I have zero insight into their core business, and if I don't have edge, I don't trade. But I know a thing or two about how markets work, and all of the conspiracy nuts who have jumped onto the GME story just don't really get it. That's what I take issue with.
They even disclosed to investors the risk of a further short squeeze on their stock. If they don’t have reason to believe that’s a possibility, it would never have been put on the record in a public filing.
In addition, assisting the SEC about 'ongoing manipulation' can just as easily mean that the SEC may be considering mass hyping of the stock through reddit to be manipulation. It does not mean that there is definitely shady stuff going on that GameStop is worried about.
GameStop’s filing did note the following [1]:
“the inquiry is not expected to adversely impact us”
The SEC themselves have commented on the investigation too [2]:
"SEC staff continues to monitor the market in light of the ongoing volatility in certain stocks to determine if there have been any disruptions of the market, manipulative trading, or other misconduct," a spokesperson for SEC said in a statement.
"In addition, we will act to protect retail investors if violations of federal securities laws are found."
[1] https://www.bloomberg.com/news/articles/2021-06-09/gamestop-...
[2] https://www.reuters.com/world/us/us-sec-says-observing-marke...
I think that's a major misunderstanding of how the statement works. Gamestop think the SEC inquiry won't affect their business - they aren't making any claims about its effect on their stock price. In a normal world, these would be close to equivalent, and you could interpret the statement as "this will not impact us to an extent that is material to our stock price", but that's not OK to do here.
They are currently completing an at-the-market offering for 5,000,000 shares, as a means to raise capital to fund their new digital strategy. We don’t know how long this will continue to go on for.
You may or may not be aware of this, but their new chairman is on a major recruitment drive and is taking on many new technology-focussed executives (lots of former Amazon execs, a total change in perspective for a brick-and-mortar retailer that was nearly bankrupt last year).
This has all been disclosed in their recent filings — and so as I understand it, at the present moment their share price is directly linked to the performance of their business.
Ultimately, though — I’m just speculating. This is far from the only indication they’ve given that retail investors needn’t worry. Just some food for thought. I wouldn’t normally give much weight to this if it weren’t also for everything else they’ve got going on at the moment. Time will tell!
“Forget GameStop” is a running joke by this point: https://www.reddit.com/r/GME/comments/mhc9vf/dont_forget_to_... — and that post was from nearly 3 months ago. These headlines haven’t slowed down since!
Some people speculate hedge funds are allowing AMC to squeeze, as a way to raise money to cover their GME shorts — not outside of the realms of possibility, given Citadel hold long positions on AMC. The timing of AMC price spikes has also correlated with FTD cycles, but that’s a whole other can of worms.
AMC seems to be covered by the media far more often than GME. On days when GME’s price has rocketed up, there appeared to be media blackouts, and it goes largely unreported. The same thing doesn’t seem to be happening with AMC (at least, not to anywhere near the same extent).
Other common observations include trading apps like Robinhood only sending users push notifications when GME’s price drops significantly — but never when it’s rising. This has not been observed with any other stocks, as far as I’ve seen.