Man I always warn people about shorting because if you're wrong the losses are unlimited. This is one of those times where you actually see people who bet wrong and get slaughtered.
Theoretically, they weren't wrong to short. It's just that their positions likely had short time periods and that 2% chance actually happened and wiped them out. Imagine waking up to your advisor telling you that your fund got wiped out cuz he bet the wrong way lmaoooooo
I saw "The Big Short" last Night, and when they had the scene with Margot Robie breaking down shit like "shorting", it began to make more sense.
Shorting is basically betting against a Stock to either gain or lose. It's like a Gambler betting for or against the House. I'm not sure if that's accurate enough, so if someone could correct me on this, please feel free.
Still waiting for my binance account to get verified. Put $50 into bitcoin on cashapp though. I was told to hold NOK until about Thursday and probably sell AMC on Monday when the shorts begin
I saw "The Big Short" last Night, and when they had the scene with Margot Robie breaking down shit like "shorting", it began to make more sense.
Shorting is basically betting against a Stock to either gain or lose. It's like a Gambler betting for or against the House. I'm not sure if that's accurate enough, so if someone could correct me on this, please feel free.
It gets better. Selling options naked is unlimited risk. Here's why.
FYI Naked just means that you don't have the shares onhand to satisfy the call if you are margin called.
For example, Say I sold some naked apple calls @ $136.25 strike for 4/16/21. Today.. I would be ITM (Think the reverse of buying a call).
For the person who bought calls, he would be down $226 per contract. At least.. if he got in from the previous day. He would be down even more if he bought these calls at the open. For now, we'll stick with previous close.
So... who gets that $226 per contract? Me. Cha-ching!
But what happens to the guy who buys the calls and it goes to zero? He has defined risk. At most, if he bought at previous close and it goes to zero, then he is out of $1,070 per contract. As the number gets closer to zero... I would earn all that he lost.
Here's where it gets tricky.
As the stock price reaches the strike, the contract goes up in price, and of course vice versa (see delta, gamma, and the greeks for more).
So what happens when the stock price hits or goes past my strike call? I lose money... and it's unlimited because Apple could have gone to $500 a share today. If it did, then in this situation, I would be F U C K E D. I would receive a margin call and thus would need to liquidate my other holdings (but as we know, the brokerages have the right to do this for me if I don't act immediately.
Now imagine someone getting greedy and doing this with 50 or a 100 contracts..
But wait... there's more.
Because each option contract is roughly equal to 100 shares... and because I sold a call and it hit... I also need to have enough equity in the account to each buy the put, to offset the call (strangle), or enough to buy 100 shares at that strike price. So that's $136.25 *100 shares.
If you read through all of that and understood it, then you know why hedge funds are freaking the fuck out this week. Their situation is a bit different. They were short selling shares that don't exist... and now ppl are coming for those shares... but there aren't enough to satisfy the demand...
GME could save the day by diluting the shares... but if someone locked potential customers from buying your current shares and only allowed ppl to sell them... would you help that person out down the line? If you would, then meet me at the river. You are the frog; I'm the scorpion.
*My thoughts; Do your own DD; yada yada. This is NOT investment advice and shouldn't be taken as such.*
That's because they own the keys. If you don't own the keys, you don't own the crypto. Stay away from cash app and paypal as well if you plan to transfer.
Get with my boy Dr. @M4nh4tt4n for more info on that.
*My thoughts; Do your own DD; yada yada. This is NOT investment advice and shouldn't be taken as such.*
It will more than likely go way up. The gamma squeeze hasn't even begun yet.
Play with what only you can afford to lose. The rest is up to you. I lost over 10k in one day. I don't feel it. Gained 15k the next day.
*My thoughts; Do your own DD; yada yada. This is NOT investment advice and shouldn't be taken as such.*
One more and I'm done for the night, unless you all want me to stick around.. lol
How fitting is this... it's the ultimate cheat code. POWER TO THE MF PLAYERS!
Robinhood is so fucked lmao.
I do shed a tear for the I.T. dept; they will lose their jobs more than likely and that sucks. They only did what they were instructed to do.
:kanyecry2:
*My thoughts; Do your own DD; yada yada. This is NOT investment advice and shouldn't be taken as such.*
It will more than likely go way up. The gamma squeeze hasn't even begun yet.
Play with what only you can afford to lose. The rest is up to you. I lost over 10k in one day. I don't feel it. Gained 15k the next day.
*My thoughts; Do your own DD; yada yada. This is NOT investment advice and shouldn't be taken as such.*
Yeah man that's how most people get killed in bubbles. The one sane guy tells them to leave while they on top, they decide that dude is crazy, stay and then shit plummets and then they get slaughtered. I've seen it far too many times lololol.
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