[Non-Doomsday Economics] Democrats end expanded entitlements, bailout Silicon Valley

The Something Awful Forums > Discussion > C-SPAM > [Non-Doomsday Economics] Democrats end expanded entitlements, bailout Silicon Valley

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cumshitter: Sep 27, 2005; by Fluffdaddy

Raccooon posted:

I guess I was thinking shorting required borrowing shares to do it.

When it reality it�s just more akin to a straight bet of something will happen for a money exchange. In theory then the contract maker and buyer may never own any of the stock.

shorting and options are zero-sum. in order for one person to profit the other has to lose. the rest of the market is not.

like if you inherit stocks from your grandma and get a stepped up cost-basis on them you don't lose anything. nobody loses anything by you and the other inheritors getting a tax advantaged new basis in the stocks. but shorts and options are actual zero sum games. this is why they are riskier and have higher payouts

# ? Jan 26, 2021 08:50

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# ? May 7, 2024 04:18

Gods_Butthole: Aug 9, 2020; Can't post for 8 years!

cumshitter posted:

im trying to think of the best way to explain this. shorts and options are derivatives: you dont own the underlying stock. you are selling a contract on the open market to either buy or sell shares of a stock. that is why they are called derivatives; they derive their value from an underlying stock

example: you think McDonald's will go gangbusters in the next six months. its worth $100 now. you think it will be $110 in six months, so you buy a call option (an option that lets you buy shares at a pre-determined price) on mcdonalds for $105

mcdonalds breaks the $105 price barrier. you exercise it. theoretically, the person who sold you the call option can give you mcdonalds stock. but why bother? you just settle it and you get 100 x $X number of call options you bought. at no point did you ever have to own mcdonald stock: the option seller just gives you the cash once you exercise it over the strike price of $105 and also when it earned you more than you paid for the options contract

i can not stress this enough: derivatives are purchase and sell contracts. i pay you $X to sell to me or buy from me Y security at a certain price within a certain timeframe. if the price of the derivative stock fluctuates enough that it makes sense for me to put the contract in force then you just pay me the difference. you dont need to actually own the thing youre dealing with. im very drunk i hope that makes sense

that is the #1 rule of options they teach you in an MBA: options (but not shorts) are a contract, but not an obligation, to buy or sell something at a certain price within a given time frame. whether or not it is profitable or desirable is up to you

So naked shorts are more "dangerous" in the sense that you are able to leverage far more value and theoretically more ~~value than the entire market cap of the company's stock?~~ stocks then there are on the market?

# ? Jan 26, 2021 08:52

Raccooon: Dec 5, 2009

Something I don�t get. If shorting never requires selling a borrowed amount of stock and is just a uhh side bet (?). How does it affect the price of a stock? I thought the whole point of if you had a lot of shorts then that meant lots of people would be selling borrowed stock dropping the price of said stock.

# ? Jan 26, 2021 08:53

Gods_Butthole: Aug 9, 2020; Can't post for 8 years!

cumshitter is the money whispering hero

# ? Jan 26, 2021 08:55

Epic High Five: Jun 5, 2004

Raccooon posted:

Something I don’t get. If shorting never requires selling a borrowed amount of stock and is just a uhh side bet (?). How does it affect the price of a stock? I thought the whole point of if you had a lot of shorts then that meant lots of people would be selling borrowed stock dropping the price of said stock.

As I understand it, people putting loads of cash into GME is making it number go up, and as it rises some of these contracts come due, meaning the vultures have to scramble for shares, which drives the price up even more, and so on until trading is halted a dozen times in the hopes that it'll get them to knock it off

# ? Jan 26, 2021 08:59

Antonymous: Apr 4, 2009

cumshitter posted:

its inherntly neutral but good if you expect more people are going to be born into the economy. otherwise you have more people chasing after a static amount of dollars

not commenting on the inability of the private sector to provide a living wage (it never will on its own). just saying if youre only going to have $100 trillion US dollars ever those dollars become more precious as more people are birthed into your economy

like imagine a deflationary economy where every year you negotiate how much less youre going to be paid, because de facto your wage gets inflated by the smaller amount of dollars in circulation compared to the popualation, where the optimal outcome is that you took a 0% paycut because you were a top earner

bro inflation is not about how much total money there is. that's, if anything, a bad reading of anti-inflation rhetoric

# ? Jan 26, 2021 09:03

cumshitter: Sep 27, 2005; by Fluffdaddy

Gods_Butthole posted:

So naked shorts are more "dangerous" in the sense that you are able to leverage far more value and theoretically more value than the entire market cap of the company's stock?

i dont understand what you're trying to communicate. you don't leverage with shorts: leverage is when you borrow money. a bad short is basically betting more money than you have, you would leverage after you lost to cover your debts with other debts

here is how a short works:

McDonald's is $100. the maximum possible profit you could make is $100/share you short. your potential loss is, theoretically, infinite because the WSB crew could come in and drive shares up to infinity dollars per share on the exchanges

shorts are dangerous because there is a known and definite amount of profit to be made while the price could theoretically skyrocket far beyond any justifiable value, as it did with gamestop

there are two ways for the short seller to make this up:

1) They do nothing. they pay the cash difference between when they initiated the short and the current price of the stock, assuming it went up. this is the maximum loss situation
.
2) They buy shares of gamestop as the price is rising to mitigate their losses. They make good on the some of the short contracts and provide the other party with the shares they promised instead of the cash equivalent. this is still costly, but they lose less because they bought shares while they were rising in price rather than paying the difference of peak price when the short contract closes

either way they lose. option 2 means they lose, but they stil lose less. again, very drunk, sorry if this doesn't make senese

cumshitter has issued a correction as of 09:06 on Jan 26, 2021

# ? Jan 26, 2021 09:03

Raccooon: Dec 5, 2009

Epic High Five posted:

As I understand it, people putting loads of cash into GME is making it number go up, and as it rises some of these contracts come due, meaning the vultures have to scramble for shares, which drives the price up even more, and so on until trading is halted a dozen times in the hopes that it'll get them to knock it off

From cumshitter�s post it sounded like the short sellers who lose never need to buy the stock just provide the cash differential. Like their bet would never need to impact the stock price directly as they never would buy or sell it directly.

Edit: think 2) in above post answered this.

# ? Jan 26, 2021 09:07

Epic High Five: Jun 5, 2004

Raccooon posted:

From cumshitter’s post it sounded like the short sellers who lose never need to buy the stock just provide the cash differential. Like their bet would never need to impact the stock price directly as they never would buy or sell it directly.

Yeah but they're buying the shares as a means to lessen the pain, which in cases like this means having to go to the people who are collaborating to never sell until it hits a certain level

# ? Jan 26, 2021 09:09

Xaris: Jul 25, 2006; Lucky there's a family guy
Lucky there's a man who positively can do
All the things that make us
Laugh and cry

Epic High Five posted:

Kojima has done it again

# ? Jan 26, 2021 09:14

Xaris: Jul 25, 2006; Lucky there's a family guy
Lucky there's a man who positively can do
All the things that make us
Laugh and cry

Stairmaster posted:

Has the online left ever done anything besides get owned by septuagenarian rapists

sometimes we larp real hard and conjure up disco elysium thought cabinents

# ? Jan 26, 2021 09:15

Viginti Septem: Jan 9, 2021; Oculus Noctuae

So what's a good trade on GME? The calls in Robinhood wonk out above 115.

# ? Jan 26, 2021 09:16

Xaris: Jul 25, 2006; Lucky there's a family guy
Lucky there's a man who positively can do
All the things that make us
Laugh and cry

samantonio posted:

So what's a good trade on GME? The calls in Robinhood wonk out above 115.

you don't

its too late now

instead YOLO into TSLA

# ? Jan 26, 2021 09:17

Antonymous: Apr 4, 2009

if I am shorting gamestop I sell a contract and the contract says "antonymous will give you one Gamestop stock in one month" and I sell that contract for $20. I'm expecting gamestop will be under $20 in one month

lots of people saying 'hey I will give you a stock in a month for a lower price than it is now if you pay me upfront' does have an effect to lower the price of the stock

when Wallstreet bets runs the price up to $120 right when the one month came due you can see that it extremely hosed me over, especially if I didn't have the stock in the first place, and my panicked buying only emboldens the price to go higher, loving over the other contract I have that sells GME next week and one the week after for lower and lower

# ? Jan 26, 2021 09:17

cumshitter: Sep 27, 2005; by Fluffdaddy

Raccooon posted:

From cumshitter�s post it sounded like the short sellers who lose never need to buy the stock just provide the cash differential. Like their bet would never need to impact the stock price directly as they never would buy or sell it directly.

Edit: think 2) in above post answered this.

shorts and options are timed buy/sell contracts. you, as the seller of a short or an option, must agree to buy or sell a security for $X within a defined timeframe

if you believe it will be more expensive to buy the thing you must provide to the purchaser of th contract you sold at the calendar date end of that time frame then it makes sense to buy stock while it is rising and while you think it has not hit its peak price point. that is how you mitigate losses on a losing deal. you have to provide X number of shares at a certain date. if you are smart, you will buy them while they are (relatively) cheap

you lose either way. it is just a way of reducing your losses by buying the thing you have promised to deliver to a third party at lower prices. you are still royally hosed regardless

cumshitter has issued a correction as of 09:20 on Jan 26, 2021

# ? Jan 26, 2021 09:18

Gods_Butthole: Aug 9, 2020; Can't post for 8 years!

cumshitter posted:

i dont understand what you're trying to communicate. you don't leverage with shorts: leverage is when you borrow money. a bad short is basically betting more money than you have, you would leverage after you lost to cover your debts with other debts

here is how a short works:

McDonald's is $100. the maximum possible profit you could make is $100/share you short. your potential loss is, theoretically, infinite because the WSB crew could come in and drive shares up to infinity dollars per share on the exchanges

shorts are dangerous because there is a known and definite amount of profit to be made while the price could theoretically skyrocket far beyond any justifiable value, as it did with gamestop

there are two ways for the short seller to make this up:

1) They do nothing. they pay the cash difference between when they initiated the short and the current price of the stock, assuming it went up. this is the maximum loss situation
.
2) They buy shares of gamestop as the price is rising to mitigate their losses. They make good on the some of the short contracts and provide the other party with the shares they promised instead of the cash equivalent. this is still costly, but they lose less because they bought shares while they were rising in price rather than paying the difference of peak price when the short contract closes

either way they lose. option 2 means they lose, but they stil lose less. again, very drunk, sorry if this doesn't make senese

That makes sense, thanks

I think the last bit I'm hung up on is how naked short selling is possible. My current understanding of a short sell is you borrow a stock and sell it at a given price and are expected to pay the borrower back by a certain date, with shares of the borrowed stock, cash, or some combination thereof. I also imagine that you could do this by borrowing and selling options of a stock and you're legally expected to ensure that the there are stocks in existence that you have access to back up those options. A naked short sale is when you don't ensure that there are stocks that you have access to.

Am I close?

# ? Jan 26, 2021 09:26

Xaris: Jul 25, 2006; Lucky there's a family guy
Lucky there's a man who positively can do
All the things that make us
Laugh and cry

Centrist Committee posted:

it�s like a weird, funhouse mirror echo of the uprisings this summer. this time it�s the reddit keyboard jockeys who are experiencing their first, fleeting encounter with solidarity. but like the uprisings it is fundamentally spontaneous in nature, and WSB is going to learn a tough lesson about the limitless resources of capital much like the cool zone was exhausted by the limitless resources of the state. when this crashes, there�s going to be a whole lot of angry people ready to be organized, I hope the online left doesn�t leave them to the nazis

and yeah i actually i agree with the cramer cnbc poo poo that it is a sideshow, it's not going to change anything. it's 1 stupid hedgefund that lost like $2 billion, but single hedge funds and private equity firms control billions on the low end to trillions, and there are a thousand of them. even aggregating all the "wealth" of everyone in wsb+other isn't even going to come closet to the wealth of a single good sized hedge fund. GME wasn't a one-in-a-billion death-star torpedo shot per se, a lot of stars aligned there, both calculated or otherwise, but it's also not likely to be repeated as successful for most scenarios.

that said most everyone knew what they were doing: that investing in a dying company at increasingly-inflated prices is almost certainly going to lead to them losing money overall, just that boomers were going to lose more. probably the thing that would be most upsetting would be j-pow just handing another $100 billion dollars to Melvin Capital

# ? Jan 26, 2021 09:28

Antonymous: Apr 4, 2009

Gods_Butthole posted:

That makes sense, thanks

I think the last bit I'm hung up on is how naked short selling is possible. My current understanding of a short sell is you borrow a stock and sell it at a given price and are expected to pay the borrower back by a certain date, with shares of the borrowed stock, cash, or some combination thereof. I also imagine that you could do this by borrowing and selling options of a stock and you're legally expected to ensure that the there are stocks in existence that you have access to back up those options. A naked short sale is when you don't ensure that there are stocks that you have access to.

Am I close?

a naked short is you saying you will give someone a stock in a week that you don't have because you assume they won't want the stock

edit: the contract usually lets you settle by handing over the stock or the cash value of the stock at the time the contract came up

Antonymous has issued a correction as of 09:34 on Jan 26, 2021

# ? Jan 26, 2021 09:30

Braggins: May 21, 2020; No, it's Braggins, not... dammit

cumshitter posted:

me, waving a Target stock certificate at the front of the masses: let me in! let me in!!!

*a man in a red polo with an M16 slung aorund his back and a doberman with red bullseyes over its eyes reviews the stock certificate*

Welcome, citizen.

You have meddled with the primal forces of nature, Mr. Cumshitter, and I will not have it!

# ? Jan 26, 2021 09:31

cumshitter: Sep 27, 2005; by Fluffdaddy

Gods_Butthole posted:

I think the last bit I'm hung up on is how naked short selling is possible. My current understanding of a short sell is you borrow a stock and sell it at a given price and are expected to pay the borrower back by a certain date, with shares of the borrowed stock, cash, or some combination thereof.

you understand it 100% man. heres your MBA

# ? Jan 26, 2021 09:34

cumshitter: Sep 27, 2005; by Fluffdaddy

fun story: at my college graduation they handed out color coded hoods for people who got honorary degrees

one of the honorary degrees they gave out was for humanitarian studies and they gave a white hood to someone, i forget their name or their involvement but they apparently knew MLK Jr., a loving white hood for his role in advancing civil rights

like come the gently caress on

# ? Jan 26, 2021 09:36

Viginti Septem: Jan 9, 2021; Oculus Noctuae

# ? Jan 26, 2021 10:03

Xaris: Jul 25, 2006; Lucky there's a family guy
Lucky there's a man who positively can do
All the things that make us
Laugh and cry

this may be part copium / part conspiracy, but this was something i didn't really consider with GME but it seems potentially true: https://www.reddit.com/r/wallstreetbets/comments/l528pz/gme_endgame_part_3_a_new_opponent_enters_the_ring/

(too long/embedded pics to c/p. also some other good links in there)

# ? Jan 26, 2021 10:42

Viginti Septem: Jan 9, 2021; Oculus Noctuae

# ? Jan 26, 2021 10:47

Goa Tse-tung: Feb 11, 2008; ;3; Yams Fan

Xaris posted:

this may be part copium / part conspiracy, but this was something i didn't really consider with GME but it seems potentially true: https://www.reddit.com/r/wallstreetbets/comments/l528pz/gme_endgame_part_3_a_new_opponent_enters_the_ring/

(too long/embedded pics to c/p. also some other good links in there)

tl;dr is that one of the market makers that handles transactions (at NYSE) now has a financial stake in GME going down, and those weird holds at market openings were them manipulating the price momentum (that last part is the :tinfoil:

part)

# ? Jan 26, 2021 11:05

Victory Position: Mar 16, 2004

it's fancy gambling, much like all speculation

# ? Jan 26, 2021 11:08

Horizon Burning: Oct 23, 2019

Xaris posted:

this may be part copium / part conspiracy, but this was something i didn't really consider with GME but it seems potentially true: https://www.reddit.com/r/wallstreetbets/comments/l528pz/gme_endgame_part_3_a_new_opponent_enters_the_ring/

(too long/embedded pics to c/p. also some other good links in there)

this is why i won't put money in GME now. even if it seems a sure thing, my assumption is that there're a lot of people with a lot of money who don't want to take the hit. they'll find some way to not get hosed. as that guy says, they're playing a game against the dudes who write the rules.

# ? Jan 26, 2021 11:51

Stereotype: Apr 24, 2010; College Slice

it's literally just a game lmao

# ? Jan 26, 2021 12:31

Horizon Burning: Oct 23, 2019

sooner or later the game... will stop

# ? Jan 26, 2021 12:36

Relevant Tangent: Nov 18, 2016; Tangentially Relevant

1stGear posted:

https://twitter.com/burgessev/status/1353836814386257920

Sen. Sinema Opposes Eliminating the Filibuster, ‘Not Open to Changing Her Mind’

There were others like Jon Tester, who said they don't want filibuster reform now but are open to it in the future. Maybe. Possibly. If the Republicans are naughty.

Oh, I see what's going on here, you're making posts from 2010. Buckle up, friend, the next ten years are going to be wild.

Mitch folded, he didn't get poo poo, and your insistence otherwise is purest republican spin.

# ? Jan 26, 2021 12:49

Judakel: Jul 29, 2004; Can't post for 9 years!

Relevant Tangent posted:

Mitch folded, he didn't get poo poo, and your insistence otherwise is purest republican spin.

Lib cope

# ? Jan 26, 2021 12:53

Minera: Sep 26, 2007; All your friends and foes,
they thought they knew ya,
but look who's in your heart now.

shorting both of your posts

# ? Jan 26, 2021 13:01

bedpan: Apr 23, 2008

I'm really feeling like opening an account and starting to gamble with wallstreet bets. It is sobering to see people made millionaires off of reddit stock trading and that I have to work for a living and a terrible living at that.

# ? Jan 26, 2021 13:04

FistEnergy: Nov 3, 2000; DAY CREW: WORKING HARD; Fun Shoe

bedpan posted:

I'm really feeling like opening an account and starting to gamble with wallstreet bets. It is sobering to see people made millionaires off of reddit stock trading and that I have to work for a living and a terrible living at that.

If you jump directly into WSB plays you'll probably be zeroed in a month. You need to start smaller and safer and learn the basics before dipping your toe into the the real freebase poo poo

# ? Jan 26, 2021 13:39

Greataval: Mar 26, 2010

bedpan posted:

I'm really feeling like opening an account and starting to gamble with wallstreet bets. It is sobering to see people made millionaires off of reddit stock trading and that I have to work for a living and a terrible living at that.

Your going to blow up your first account.

# ? Jan 26, 2021 13:45

Mr Hootington: Jul 24, 2008; I'M HAVING A HOOT EATING CORNETTE THE LONG WAY

https://twitter.com/LizAnnSonders/status/1354046045894930433?s=19

Jump into blackberry! Go all in! The chart has nothing to do with this!

# ? Jan 26, 2021 13:46

Mr Hootington: Jul 24, 2008; I'M HAVING A HOOT EATING CORNETTE THE LONG WAY

Every cspammer will be a boomer by the end of 2022. Thank you biden for making this possible. :patriot:

# ? Jan 26, 2021 13:47

Tiler Kiwi: Feb 26, 2011

the investment news keeps talking about how "Market Investors Are Disagreeing With the Value of GameStop" and while, you know, i get that its supposed to be based on some actual valuation of the company and its profits and dividends, it feels like an incredible act of disingenuous language to imply that any of this had anything to do with and assessment of the actual state of gamestop

# ? Jan 26, 2021 13:48

OhFunny: Jun 26, 2013; EXTREMELY PISSED AT THE DNC

Greataval posted:

Your going to blow up your first account.

Nah Gamestop is going to $250. WSB can stay irrational for longer than the shorts can have money.

# ? Jan 26, 2021 13:53

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# ? May 7, 2024 04:18

Cold on a Cob: Feb 6, 2006; i've seen so much, i'm going blind
and i'm brain dead virtually; College Slice

bedpan posted:

I'm really feeling like opening an account and starting to gamble with wallstreet bets. It is sobering to see people made millionaires off of reddit stock trading and that I have to work for a living and a terrible living at that.

you haven't seen how many people lost money nor the people that blew up a shitload of accounts before getting lucky

# ? Jan 26, 2021 13:56

The Something Awful Forums > Discussion > C-SPAM > [Non-Doomsday Economics] Democrats end expanded entitlements, bailout Silicon Valley

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