re: #180 Teukka

You have this possibility on betting a certain stock, say $GME, to rise or fall, and to buy it at the value when it has risen or fallen. A lot of hedge fund managers bet on $GME falling, and r/WSB made it so that it instead rose, and rose painfully much, forcing hedge fund managers to buy at that cost. Cue:

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Most hedge funds, if I remember correctly, are setup as 130/30, meaning 130% long, 30% short on the market or market sector they deal with. They play both ways as a “hedge” for massive losses.

They probably shorted the shit out of Gamestop because it seemed like COVID was likely pushing them out of business.

How shorting works is: Basically you borrow shares of a stock you think is going to go down from your broker, and sell them at the high price they are now. Later if it goes down you buy the shares back at a lower price and give them back to your broker. The price difference is your profit.

If the stock ends up going up, you lose money because you have to buy it at a higher price.

Apparently the share price was pushed up from around $18 to like $350 so these hedgefund managers are hosed.

They did the equivalent of buying it at $350/share and selling it at $18/share.