GME is not a delisted, leveraged security though. Also, that price increase means $1.6K for GME maximum not $25K, and that was when short interest was extremely high.
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Are you suggesting that there are no circumstances where hedge funds and brokers will be forced to cover a short position by buying shares on the open market? The whole idea of a squeeze depends on that basic premise. The āillusionary demandā in a short squeeze situation is regulatory compliance.
I think so. As long as the broker has more shares, they can lend them to the shorter who can then use them to cover the original short. Obviously, the broker will charge another round of interest in the process, but theyāre still only missing the original number of shares. Itās only a regulatory issue if they declare a FTD when the shorter canāt afford to pay any more interest, or the broker doesnāt believe they are good for more interest and demands the share back immediately. But thereās no real reason to do that if they think they can continue extracting more interest, because the owner of the share is happy holding in the meantime.
The whole charade can continue indefinitely if the owner of the share doesnāt want to sell, and if the broker knows they can offload the share at a guaranteed price, if the FMV is below that price, they can just pay the owner the FMV of the share when they want to sell and report it as an off-exchange sale, rather than going through the market.
I think this is the whole reason why shorts are normally only for a day or two, so that they can be disguised in the settlement timeframe.
The notion with Gamestop is that acceptable and normal practices left the room a long time ago. If the level of illegal naked shorting is anywhere near the speculated amounts then there could come a point where constantly resetting the short position is no longer viable. Thatās the play here. If the premise is correct and thereās a suitable trigger that forces a reconciliation back to the issued number of shares then the brokers are no longer in charge. In terms of margin, remember that hedge funds were shorting GME when it was $20 or less a share. If those kind of positions have been rolled forward for settlement at a unspecified point in time then the level of risk has increased spectacularly. Anyway, weāll see. Time will tell.
I know, I only put a limit price to show how far it is from the $10k + prices that some people think it can get to. On top of that, short interest is closer to 20% now.
The only thing we know for sure is that nobody knows whatās going to happen. The situation is similar to other things that have happened in the past but is completely unique at this moment in time.
None of us really know how many āsyntheticā GME shares have been sold. Nobody knows the extent of the illegal activity surrounding the stock - it could be a lot, it could be a little. Nobody knows what exactly will trigger a squeeze. Nobody knows the political and economic ramifications just like nobody knew exactly what would happen when Wall Street spent years feasting on mortgage backed securities before coming to an abrupt end in 2008.
Until itās history, itās speculation. It may come to nothing, it may be spectacular. Weāll see.
Whatās your source for this?
I donāt know how well SOME have actually thought about the mathematics involved and how the rich use bankruptcy to avoid debts
From my understanding, if a member of the DTCC (i.e. a hedge fund) is margin called or forced into bankruptcy, the stock liabilities of that member are transferred to the DTCC. In the event that the DTCC feels a member is over-leveraged, it can reduce itās risk by liquidating that member using the new SR-NSCC-2021-801 ruling.
In the case of bankruptcy, the DTCC would be responsible for covering naked shorts (and other positions). The DTCC then auctions these liabilities to the other members. If the DTCC were to go bankrupt (unlikely due to their insurance policies) the liability is transferred to the Fed to pay out.
Some of this is detailed in the DTCCās disclosure framework.
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There are various sites that quote short interest.
This one shows short percentage of float to be 19.6% at end on March, so 20% probably isnāt far out
However when I brought this up I was told these figures are manipulated due to some complex options play that I didnāt have time to read and understand, so make up your own mind
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So my point is still kind of valid, where is the money going to come from if they use bankruptcy to get out? Money can be moved before this and then go into liquidation so the DTCC pay out as you say but the numbers mentioned still end up coming from somewhere.
It is like people being happy if a petrol company get a huge fine for an oil leak but in reality it just ends up them paying more each week at the pump. If an insurance industry ends up paying out then our bills get higher or the fees increase in the market. It all ends up costing the little man in the end.
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I donāt have any hard values beyond the links I provided, but Iāve heard it suggested that the DTCC carries 70 trillion in insurance. Also the Fed has been printing money like itās going out of fashion for the past year, so we know theyāre good for it. In theory. I believe it would have to go to absolutely market-wrecking prices (1m+) for payouts to become a questionable issue.
GME is a side-effect of a much larger problem - hedge funds have taken hundreds of billions in margin across the market which they canāt realistically afford to ever pay back. This may lead to a significant crash at some point in the future, but when is anyoneās guess. The effect of GME in relation to the systemic failures weāre currently seeing is insignificant, even if the share price hit 100k.
But yes, sadly we will all be the ones to pay the price for other peopleās greed, as usual. I try to avoid expressing personal opinions here, but I will say - the silver lining is that if GME did āmoonā to astronomical levels, that money would be redistributed to the working class and local economies. It would also provide a huge tax boon for the government which could go back into infrastructure and services (in an ideal world).
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It is what all sites say when you Google GME short interest. It is likely this is higher but still nowhere near what it was in January.
Agreed, I donāt doubt the authorities would afford to pay out but the trickle will impact the poorest ultimately as usual. I also donāt pretend to know all the ins and outs of what will/can happen but I do think that people thinking we all will get 25k etc is a very 1 dimensional view of what the actual outcome will mean.
The best outcome is probably somewhere in the middle where people make a huge % and the HFās get screwed but not too high that regulators/insurance/governments end up bailing out. People just need to look at 2008 and see who really lost out in the long run and it certainly wasnāt the city that suffered austerity in the next 10 years 
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There are going to be a lot people losing lots of money in this stock over the next year or so. And It wonāt be the āprofessionalā traders.
Iāll be happy if this stock reaches $250, let alone $25,000
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In the suggested scenario, the actual āstockā is incidental. This is about what could happen due to market behaviour. It has nothing to do with the underlying value of the company. Of course, you may be right. If none of the suggested malpractice has taken place, then the game returns to fundamentals and anybody who bought above the true value, loses the difference between that value and the price they paid.
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Even if they bought in at $40, suggesting that 200,000 reddit readers put in $4000 each doesnāt seem very conservative. Iād imagine thereās a couple of hundred talking very loudly and posting YOLO pictures and the rest have a share or two at most and hoping itāll earn them a yearās salary.
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I would be curious to know how many Freetrade users have GME in their holdings.
Judging by the huge surge in user numbers while the first part of the squeeze was happening Iād guess quite a lot. Iād assume most of the new users wanted to buy GME and couldnāt on other platforms.
However I also suspect most of them only have a small amount
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It is worth acknowledging many are alts and bot accounts to hype it up 
The amount of new accounts that join post same thing then disappear is astonishing 
There will also be many āapesā hyping/encouraging others who would be first to jump at say 5k and bugger every other ape.
Iām actually curious. Do you have anything to back this up? I tried googling for it, and just found redditors claiming it without an actual source.
Iād believe this might have been true during the hype mania, maybe in terms of number of transactions (lots of people jumping on the bandwagon), but probably not volume or value (Iād imagine big investorsā large volumes would drown GME). But given the stock has just been slowly falling for the last week or so, I canāt imagine itās really all that active or that people are just holdingā¦
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