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Short-selling is when institutions bet that stocks will fall. They do this by borrowing those stocks and selling them. They then buy them back later at a cheaper price and then return the stocks to the original owner, pocketing a profit. We have to be judicious about the short book, Left said in a video posted to Twitter. Even though we have been called boomers many times over the past week, we understand the changing dynamics in the market. So with that we ll become more judicious when it comes to shorting stocks. Doesn t mean the industry is dead. But it just means you have to be more specific. As for longs, we have some great ideas in the future.
In what some have labelled an act of defiance against seasoned Wall Street veterans, these retail investors had essentially forced the hedge funds into a stark choice – continue buying shares at higher prices to cover their positions or abandon them altogether incurring potential billions in losses. This is known as a short-squeeze.
Gamestop s share price soared by 92 per cent during the January 26 trading session, and by 134 per cent on January 27, with a reported 178 million shares traded. To put this into perspective, the average volume of Gamestop shares traded daily prior to this saga was around 10 million shares per day.
While Melvin Capital, reportedly, tried to sustain its position, it later said that it had closed its position without detailing the scale of losses it had suffered. It is also worth noting that the hedge fund had accepted a $2.75 billion capital lifeline by other funds like Point72 Asset Management and Citadel Securities in order to stay afloat.
GameStop gamed in stock market tizzy By WILLIAM HENNELLY in New York | China Daily Global | Updated: 2021-01-29 12:20 A GameStop store is pictured amid the COVID-19 pandemic in the Manhattan borough of New York City, Jan 27, 2021. [Photo/Agencies]
It looks like the latest installment of Wall Street vs Main Street.
The stock market has been in an uproar this week over the wildly speculative trading in a handful of stocks, namely GameStop, a retail outlet that sells video games, and has drawn the attention of the US Securities and Exchange Commission, Congress and politicians from both sides of the aisle.
GameStop story: Amateur traders take down Wallstreet
The GameStop story that has got everyone excited with its David and Goliath undertones needs a telling. PUBLISHED BY
GameStop is a US-based retail chain store selling video games CDs, consoles, and other related electronics. With the gaming world becoming more tech-savvy and moving totally online, gamesters included, GameStop was not exactly thriving. Added to that was the Pandemic that shut down most cities for almost a year, and we have a retail brand in trouble.
In come the shining knights in armor the metaphorical ones that operate on Reddit. In this case, subreddit peopled by almost 4 million that call themselves Wallstreetbets. Here everything to do with investments, stocks, trading, hedging is discussed, recommended and discarded.