Seems to me that if we can avoid a complete meltdown, then the situation will be self-limiting. At that point the biggest danger IMO is congress. I fear we will see a bunch of brain-dead politicians proposing all sorts of restrictions on everyone that will do nothing but cause even more problems for them to solve !

TD Ameritrade and WeBull also stopped or restricted sales at the same time as Robinhood.

I don't understand your worry. Surely with Maxine Waters in the House and Elizabeth Warren in the Senate serving on the key committees the situation is well in hand.

Neither of those is correct Hippie.

For a short seller to make money, he only needs the stock price to decline. Once he buys it back, he is no longer short...NOR is he long. He has no position whatsoever. So it would not make him a dime regardless of how high the stock went.

#2...in this case... the stock is going up...generally....and the stock buyers are gaining. They are not taking it in the shorts.


Just to try to clarify a bit of arcane trivia I'll add this.

If you own stock you are said to be LONG

If you sell that stock, you have no position. You are not short . You cannot be both long and short in the same account simultaneously.

If you want to be short then you must sell shares that you do not own. You must borrow those shares in order to sell them.

You COULD have two accounts at different brokers and be long in one account and short in the other. But that seems rather pointless. There are easier ways to hedge.

But if you only have one account you are either long, short or have no position.

We're not understanding each other.

On one...

You have stock that's falling or going to, You sell at say 10, and buy back at 5 once it falls. You need it to go back up to make money. Ten being what you have invested originally to own them.

On two.

This is what happened in gamestop. Hedge funds borrowed stock at pretend 10 and sold them thinking they were going down and would then buy them back to return to the owner at the pretend 5, pocketing the 5 difference.

Problem when it didn't drop.

No. You 're not understanding the logistics.

If I have an account in which I own 100 shares of GME and I sell those at 10................I now have no position in GME at all. I have NOT shorted the stock.
.

That is NOT what happens in a short sale transaction.

In order for me to "get short" I have to own nothing. I have to borrow shares to sell. So I sell them at 10 and buy them back at 5. I have made 5 points. BUT the instant I buy those shares back at 5 they go back to the person I borrowed them from They do not go into my account.

Suppose being 'short' equals -1. Now when you buy to close that short it is like adding a +1. Negative one plus positive one equals zero.

You can't have the shares in your account and get short by selling those shares.



#2 that's correct but the stockholders are gaining not taking it in the shorts

One thing I know for sure is last quarter my 401K made me some money,
In crazy times I'm glad to even break even right.
But I trust the politicians stock brokers got my best interest in there actions right.
Ok enough for now gotta go make the africans some money.

Here;s a better example Hippie.

Suppose you have a brand new 1955 corvette with 3 miles on it. Also, your buddy has the identical vehicle.

If you sell your car, you have cash. You don't have a position in the 'car' at all. That's the same as selling shares out of your brokerage account.

But now your buddy loans you his car and you sell it for 100K. NOW you are SHORT. Next week the buyer decides he doesn't like it and sells it back to you for 90K. You return the car to your buddy. You keep the 10k profit minus a fee to your buddy.

That's the way a short transaction works

Yes, and why I said the stockholder took it in the shorts is in your example.

He loaned you a 100,00 car that you made ten on and gave it back worth only 90,000 if he wants to sell.

Didn't 2 people actually lose 10k ?

The guy you sold it to lost 10 when you bought it back plus the original owner has a car only worth 90k now.

NO. He got back the same car he loaned you PLUS he got paid for loaning it to you. He still owns his car plus additional cash.

The only person who lost anything is the guy who bought and sold it back to you. He lost 10 K


I am just trying to illustrate that when you sell stock from your account you are not shorting. You are just eliminating your position.

Ok.

White17. Best explanation I heard

LOL The other thing to consider is that maybe the car really is only worth 90K and your buddy should have sold it to someone else. That's the point of short selling . It, under normal circumstances, attempts to discover what the correct value of something is.

Hey....Im just looking in through the window , trying to get the gist of things

if I sell something that's not mine, I go to jail...

If you want a safe place to make money you have to look at risk and reward. The more risk , the more reward. You have to laugh at the experts crying they may lose if stock market crashes so better get government to level the playing field in their favour. The Hunt brothers fought the same stuff. they about broke the game wide open so they were legislated in to place to protect a corrupt system. Looks like Trump exposing more corruption in a subtle way. Like how great a system is it if a bunch of 100 gamers can break it. The USDA has been playing the same games with farmers forever. Welcome to real world

I’ll bet Jim Cramer regrets doing this interview all those years ago.

Probably why he’s been MIA this last week.

https://www.youtube.com/watch?v=gMShFx5rThI

I came here from Reddit to see if there was a thread on this topic, I mostly lurk, but i'll post my 2 cents.

I believe that this movement is actually quite amazing. People are starting to realize they have power in numbers. These people are on a crusade against the establishment, the corrupt, politicians, the bankers/hedge funds that are blamed for 2008. The people who have beaten them for years and kept the poor poor, and the rich rich.

A lot of people using the reddit board are millennials who watched their parents suffer through 2008 (including myself.) They've finally found a way to beat the "hedgies" at their own game, now everyone wants a piece of the pie by buying a share, even a fractional share. Several friends of mine have already taken positions, whether its a fractional, 1, or 20+ shares. To be honest many of them don't expect to see any $ back, so long as they see Melvin Capital and friends go under for trying to bankrupt (by shorting) Gamestop and other retail stores struggling from the pandemic.

This cause has made many, many new millennials very wealthy overnight. At the click of a mouse, many of them could sell their shares and become millionaires, but they're holding their shares until Melvin covers for $1-$10k or better per share.

This is class warfare.

How high do you think GME will go before it plummets?