I guess you have read the headlines from the US on how retail traders are causing a “short squeeze” in stocks like GameStop, AMC entertainment, etc. If you haven’t, check this article by Finshots that explains this well. We have been getting a lot of questions around shorting, and if a short squeeze of this scale can happen in stocks listed on Indian exchanges. It cannot, and below, I explain why.
Quick intro to Stock lending & borrowing (SLB)
Many people who invest in the markets think that the only way to profit is buying stocks that have the potential to grow with an expectation that if the companies do well, the prices will also go up. This buying of stocks is also called going “long stocks”.
Can GameStop frenzy happen in India?
A GameStop store is seen in the Jackson Heights neighborhood of New York City, New York
(Reuters)
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If you are someone who is into stock investing, you might have noticed the stories doing rounds about the US company called Gamestop. The stock price of this video game retail company surged a massive 1,900% in a brief period of one month. It has surged from $17 on 4 January, 2021 to $348 on 27 January. What is more interesting is the reason behind the surge. Basically, members of a Reddit group called WallStreetBets came together to manipulate the price of the company. They started to buy shares of the company as they came to know that a hedge fund is holding big short positions in the stock. This led to a short squeeze kind of situation and led to huge losses for the hedge fund which is filing for bankruptcy. So, the question that arises is can something like this happen in India?
GameStop: How rookie investors beat seasoned counterparts at their own game
The GameStop share price has been skyrocketing and the short-selling tables have been turned on hedge funds who bet the stock will tank by amateur investors on Reddit.
Source: AFP
GameStop may well be a nondescript struggling chain of video game retail stores in the US, but if its stock price is anything to go by then it is definitely more in demand than the hugely popular FAANG – Facebook, Apple, Amazon, Netflix and Google – group of stocks that has even made Indians look at the US stock market for investment opportunities.
Sawitree Pamee / EyeEm/Getty Images
From financial apps to publicly traded funds to crypto-exchanges, there are now a multitude of options for investing in bitcoin.
Bitcoin remains risky and volatile, so individuals should invest small amounts, keep their accounts secure, and think long term.
Bitcoin s dramatic price rise since its 2009 debut is attracting both institutional and individual investors.
Bitcoin is possibly the most fashionable investment of the past decade. It has appreciated in value by anything from 717,900% to just shy of one billion percent (depending on your starting figure) over the last 10 years or so. Either way, it s one of the best-performing financial assets in recent history.
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How to invest in bitcoin: The major ways to buy, their pros and cons, and the strategies to consider
How to invest in bitcoin: The major ways to buy, their pros and cons, and the strategies to consider
Simon ChandlerDec 19, 2020, 19:59 IST
There are a variety of ways to invest in bitcoin, even if you aren t a professional day trader or regularly play the currency markets.Sawitree Pamee / EyeEm/Getty Images
From financial apps to publicly traded funds to crypto-exchanges, there are now a multitude of options for investing in
bitcoin.
Bitcoin remains risky and volatile, so individuals should invest small amounts, keep their accounts secure, and think long term.