Short squeeze explained

Discussion in 'General Precious Metals Discussion' started by mmm....shiney!, Feb 1, 2021.

  1. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    21,286
    Likes Received:
    4,122
    Trophy Points:
    113
    Location:
    昆士蘭
  2. jultorsk

    jultorsk Well-Known Member Silver Stacker

    Joined:
    Oct 17, 2016
    Messages:
    1,014
    Likes Received:
    1,433
    Trophy Points:
    113
    Location:
    Brisbane
    Love it. But how to explain to ape them counterfeit 'nanas? o_O :p

    https://old.reddit.com/r/wallstreet..._real_reason_wall_street_is_terrified_of_the/

    Short Version: The short version is that a review of the 'strategic fails–to–deliver' data indicates that institutional insiders may have counterfeited a massive number of Gamestop shares which is why they tried to stop retail investors from buying more shares on Thursday.

    There are are 71 million shares of GME that have ever been issued by the company. Institutions have reported to the SEC via 13F filings that they own more than 102,000,000 shares (including the 13% of GME stock is owned by Ryan Cohen). That is already 30,000,000 shares more than even exist.

    On top of the shares reportedly owned by institutions, retail investors may currently hold 50+ million shares (counting both long holdings and call options – both ITM and OTM).

    Once you include call options, retail investors may already hold more than 100% of GME (not just 100% of the float, more than 100% of the actual company). This would be definitive proof of illegal activity at the highest levels of the financial system.
     
    leo25, wrcmad, 66rounds and 1 other person like this.
  3. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    2,363
    Likes Received:
    2,464
    Trophy Points:
    113
    Location:
    Melbourne
    Whats the diff between 100% of float and 100% of company? I've yet to understand this point clearly
     
  4. STKR

    STKR Well-Known Member Silver Stacker

    Joined:
    Aug 19, 2019
    Messages:
    1,137
    Likes Received:
    1,983
    Trophy Points:
    113
    Apes, snakes and bananas :D:D

    Very fitting...
     
    mmm....shiney! likes this.
  5. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,762
    Likes Received:
    1,366
    Trophy Points:
    113
    Location:
    Northern NSW
    Floating shares (100% of float) indicate the number of shares available for trading on the market.
    Outstanding shares (100% of the company) include those held by shareholders and company insiders (eg founder's major shareholding, or convertible executive stock options - not available for trading).
    Floating stock = total shares outstanding - closely-held shares = active shares.

    This is related to Market Capitalisation vs Fully Diluted Market Capitalisation. A company's Fully Diluted Market Capitalisation is what it's market cap would be if all stock options were exercised and all convertible securities were exchanged for stock.
    Market Capitalisation = Outstanding shares x Share price.
    Fully Diluted Market Capitalisation = (Outstanding shares + outstanding convertible stock options and securities) x Share price.
     
    jultorsk, 66rounds and mmm....shiney! like this.
  6. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    2,363
    Likes Received:
    2,464
    Trophy Points:
    113
    Location:
    Melbourne
    Perfect, thanks!
     
  7. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

    Joined:
    Jan 8, 2016
    Messages:
    4,257
    Likes Received:
    1,115
    Trophy Points:
    113
    Location:
    North Sydney
    • A company could have 1 billion shares but only 700m shares might be ever floated.
    • A company could also have 5m or 500m convertable notes,
    • An insider might state they hold 27.33% but it could be held by institutions out right or under a business name, few might own shares in their name but that would be very tax ineffective
    • Xm shares could be held by the company in escrow for perfomance right (unlikely to be large as GME is a Sh!thole company that will go bankrupt eventually)
    • Xm shares of insiders could be held by Institutions as loan guarantee for individual insider
    Each point above will increase the percentage above 100%

    For example Elon Musk total salary was $23,760 in 2019
    It is obvious he spends more than 23k in a year.

    Say Elon has 1 billion shares in the filing but JPM has security of 50 million shares for revolving line of credit for his living expenses and another 950m in a trust fund inside JPM.

    JPM files 2500m shares. If you "add" the Top Stock holdings and think JPM and Elon combined owns 3500 millions shares....

    When the real number is JPM owns 1500m and elon owns 1000m
     
    Last edited: Feb 1, 2021
    Tokyo and jultorsk like this.
  8. leo25

    leo25 Well-Known Member Silver Stacker

    Joined:
    Jun 8, 2010
    Messages:
    3,742
    Likes Received:
    2,014
    Trophy Points:
    113
    Well I'm sure the SEC already have their blindfolds on. It's not like naked shots are a new thing.
     
    66rounds likes this.
  9. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

    Joined:
    Jan 8, 2016
    Messages:
    4,257
    Likes Received:
    1,115
    Trophy Points:
    113
    Location:
    North Sydney
    Plus GME is not short squeezed, it is impossible to short squeeze a stock that is turning over more than its entire float.

    Few Predictions..... some time soon

    RobinHood will be fined hundreds of millions of dollars, potentially billions by SEC
    Plenty of GME options holders will lose everything

    A Hedge Fund loses 5 billion, they just borrow more and life goes on......
    Novice Option Holders still writing or buying GME options at $500 strike will likely comtemplate suicide

    When WallstreetBets poster realise that there are no First Admendment right in Commercial speach if they own own shares and not declared so, some will have a rude awakening
     
    Last edited: Feb 1, 2021
    wrcmad, Tokyo and 66rounds like this.
  10. jultorsk

    jultorsk Well-Known Member Silver Stacker

    Joined:
    Oct 17, 2016
    Messages:
    1,014
    Likes Received:
    1,433
    Trophy Points:
    113
    Location:
    Brisbane
    Shorts appear to be exiting - according to https://isthesqueezesquoze.com, so ^^ prediction of 'some time soon' may well be justified.

    It's asymmetric to the extreme; as DFV says: "what exit strategy"?

    Screen Shot 2021-02-01 at 5.06.50 pm.png
     
    66rounds likes this.
  11. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

    Joined:
    Jan 8, 2016
    Messages:
    4,257
    Likes Received:
    1,115
    Trophy Points:
    113
    Location:
    North Sydney
    As at 31st January Market Close these options expired

    7,835 contracts at $320 per share.
    855 contracts at $310 per share.
    1,170 contracts at $300 per share.

    These contracts expired in the money and closed out meaning these three options contracts alone equal 986,000 shares of GameStop stock traded over this weekend, for a total investment of $312,325,000.

    These options combined might have been worth $100,000

    If you owned 1 option for $320 than in the morning you will find out your account needs $32,000 buy the shares
    If you don't have the money it will be liquidated
     
    Tokyo likes this.
  12. Stoic Phoenix

    Stoic Phoenix Well-Known Member Silver Stacker

    Joined:
    Nov 12, 2014
    Messages:
    4,384
    Likes Received:
    1,990
    Trophy Points:
    113
    ^ in laymans terms does that mean you think the stock will go down on opening bell in 6-7 hrs or so @Ipv6Ready ?
     
    Ipv6Ready likes this.
  13. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

    Joined:
    Jan 8, 2016
    Messages:
    4,257
    Likes Received:
    1,115
    Trophy Points:
    113
    Location:
    North Sydney
    Depends 1 on the brokerage T&C and 2 on the new share holders conviction that GME will go higher lol .

    • Brokerage T&C will state
      • either the account holder needs to have cleared funds in the morning open - if not it will be sold
      • some borkerage could give the new shareholders 2 days to two weeks to buy - after the period any un paid for shares will be sold.
    • If the option owner is a Never Sell WallstreetBets diehard with conviction they might stump up the cash
      • or they could just sell immediatley
    If too many new owners sells than a run could start.

    Note: Many options expired with huge gains too ie strikes at $50.
    If it was me, I will stump up the cash than sell for $27,000 profit, but if they can't or don't have $5,000 hopefully they have a credit card or someone to borrow from lol
     
    Stoic Phoenix and Tokyo like this.
  14. jultorsk

    jultorsk Well-Known Member Silver Stacker

    Joined:
    Oct 17, 2016
    Messages:
    1,014
    Likes Received:
    1,433
    Trophy Points:
    113
    Location:
    Brisbane
    66rounds likes this.
  15. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,762
    Likes Received:
    1,366
    Trophy Points:
    113
    Location:
    Northern NSW
    Call options do not equal shareholdings.... this is misinformation.

    Naked shorts are not illegal.
    Nothing wrong with naked shorts... they are an important mechanism of the market.
     
  16. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

    Joined:
    May 25, 2018
    Messages:
    3,372
    Likes Received:
    1,817
    Trophy Points:
    113
    Location:
    Singapore
    "Country hedge funds" haven't even stepped in. Maybe MBS will join in the fun with $10 billion hard cash? I can tell you there are lots of strongmen and women that can play casino with $1 billion a bet. It's fun when you're not losing your own money and don't need to account for losses. :D
     
    66rounds likes this.
  17. jultorsk

    jultorsk Well-Known Member Silver Stacker

    Joined:
    Oct 17, 2016
    Messages:
    1,014
    Likes Received:
    1,433
    Trophy Points:
    113
    Location:
    Brisbane
  18. Number 47

    Number 47 Well-Known Member

    Joined:
    May 31, 2018
    Messages:
    320
    Likes Received:
    433
    Trophy Points:
    63
    You'll have to excuse me, I've been living under a rock for the last 12 months....

    Is there a short squeeze on silver in the making?
    If so, on this occasion is JP Morgan the snake? I hope they are, it's about time they were shot with a pellet of their own $#it.

    I'm considering dropping around 5kg soon to help fund something, I could probably hold out for about another 3 months but to be honest I've already been holding out for the last year.
     
    Last edited: Feb 1, 2021
  19. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,762
    Likes Received:
    1,366
    Trophy Points:
    113
    Location:
    Northern NSW
    jultorsk likes this.
  20. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

    Joined:
    Jan 8, 2016
    Messages:
    4,257
    Likes Received:
    1,115
    Trophy Points:
    113
    Location:
    North Sydney

    JPM doesnt "own" a lot of silver even though on paper they do.

    However JPM stores sh!tloads of silver in thier own and other vaults on behalf of the beneficial holders.

    For example CBA states it has 20 billion in cash reserves..... that 20 billion belongs to deposits holders not CBA but they are the custodian.

    The next question you might ask is why do JPM do it, because they charge a fee for storing it and if they are the clearing house they take a tiny cut of each trade say .01c .... multiply that by tens of billions of trade... it becomes money for jam.
     
    Last edited: Feb 1, 2021
    wrcmad and 66rounds like this.

Share This Page