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So margin call arrives and all the surprised short sellers can do is buy back the stocks at exponentially increasing costs. The problem was that the shares they sold at $4 were now closer to $400. The expiration dates for many of these short positions grew closer this is the time when investors need to cover their shorted stocks in order to return them to the original owners. These included changes to upper management, an enduring consumer preference for physical sales, the release of new gaming consoles, and massive market growth for video games in 2020. Diamond Hands and the Short Squeezeĭespite multiple predictions of bankruptcy, Gamestop’s stock started to recover for several reasons. In fact, some traders will even short stocks that are already being shorted by someone else- which is how Gamestop’s float (the number of shares available for trading) ended up at a baffling 140%.
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Shorting is a popular practice among many investment firms it can be extremely effective both as retribution for poorly-run businesses and a method to make obscene amounts of money. Here’s a quick timeline to get you up to speed: The History of Gamestop, Reddit, and Robinhood: A Brief Summary There are also implications for the future, both for how we trade and how governments regulate it.” “What’s happening right now in the stock market is fascinating, but there is a historical precedent that can help us follow along. Then you’ll understand what it means to have diamond hands. So if you’re feeling FOMO and want to know what’s going on, keep reading to learn the difference between securities and commodities, as well as the subtle nuances of credit default swaps, infinity squeezes, and gamma squeezes. There are also implications for the future, both for how we trade and how governments regulate it. What’s happening right now in the stock market is fascinating, but there is a historical precedent that can help us follow along. It’s one of many rallying cries for a new wave of retail investors who have banded together in the pursuit of justice, glory, and “the bag.” That phrase has been said a lot over the past few weeks- especially on Reddit. Let’s make something clear right off the bat: This is NOT financial advice.