![]() So at a certain point, when they feel like your ability to return, the shares is quickly diminishing. So how did this play into the hands of the Robin hood army? Well, the problem with shorting a stock is that when the price goes up, you're losing money because you'll have to buy the stock back at a price that is more than what you sold it for.Īnd not only are you starting to worry, but so as the broker who lent you the shares after all, they want to be repaid in full with interest on their loan. So the difference between the price they sold the stock at originally versus what they buy it back at is the profit or loss that they realize on the transaction. So the way that the fat cat hedge funds typically short a stock is by borrowing the stock from their broker, which they sell at the then current price with the hopes that they can buy the stock back later on at a lower price to return to the broker. So many people don't understand what it means to short a stock other than it means you're betting against the stock price. So how did they do it? Essentially the identified a stock that was a household name I E GameStop that had an incredibly high level of short interest in it in a reasonably low market cap so that their fevers collective buying initiative would push the stock price up substantially. In all fairness, the aims of these investors was far from charitable, but they have leveled the playing field in an unprecedented way. And it's almost too perfect that a lot of this activity occurred on Robin HUD's app, as this became the new age, stealing from the rich to give to the poor, the central narrative behind the original Robin hood. So how did we get here? And where are we going? Well, it all started on the subreddit wall street bets, a group of board and bullish Robinhood investors got together to take on the establishment. ![]() It turned out to be a watershed moment that arguably eclipse, the hysteria that surrounded the collapse of Enron, something huge happened today and whatever its impacts are, will be with us for a long time. And you have stocks surging to unfathomable levels. Then you throw in FOMO and just fear in general. It was a combination of disposable cash, freed up by stimulus checks, unemployment insurance, and reduce living expenses, meeting an existential crisis that led a younger generation to quell their boardroom and the forums of Reddit where an idea was born, that would not have gained traction unless people had nothing else to do. And we all know it's not because they're the new hotness as a company, but rather as a stock, this is an absolute phenomenon that the market as a whole is struggling to come to terms with this was like a run on a bank, except most people profited in a small number, lost big. Gamestop is up nearly 750% in less than a week.
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