GME: Or, why we shouldn't underestimate “4chan with a Bloomberg terminal”

Front running is simplistically placing your own orders in front of your customers orders based on the knowledge that the customers orders will be executed.

Buying at better than requested rates and reselling to a customer based on a request from that customer to buy at a specific point is not front-running the customers order, it's literally just carrying out the customers order, but pocketing the difference between what you can find buy the asset at and what the customer decided to pay.

Think of this, you pay someone a fixed amount to buy you a PS5. When he gets to the shop there is a sale, so he pays less than he expected and less than you expected, but he's fulfilling your order at the agreed price so he pockets the difference. That's not front-running. He is making money fulfilling your order, but it's not front-running.

Now second scenario imagine you again pay a fixed amount for him to get you a PS5. He comes back saying "sorry, but they didn't have any left ... but I just happen to have bought 4 myself before I could fulfill your order, I'm willing to sell you one at an elevated price". That's front-running. He executed his own order, in front of the one he was carrying out for you, with the knowledge that he would be able to make money because of your order.

Note that the illegal part is not "making money by buying and selling something". It's perfectly legal for someone to buy the last PS5 and resell it at a higher price to make money. The illegal part carrying out such an order based on the inside knowledge of your pending order and front-running your order with their own.

Naturally this is rather fuzzy explanation, take it with a grain of salt.

What signs?

Even if that were true, would it constitute manipulation? What disclosures are required for stating opinion and publicly available information. I can find 1000 articles on google finance.

BBBY has been brought up in a few DD (due diligence) posts. If you go to WSB and search for BBBY you'll come acorss them. GME is obviously the focus of attention, and therefore the lions share of posts are about them.

Pattern recognition? It's not hard to find a list of the most shorted stocks currently, and think that you can buy them "earlier" than GME. By Monday, several were already way up, although not as extreme.

I think the real world meaning of this, is that people shorted stocks that were perhaps in temporary distress, but many if not all of them could be saved if they got a lot of cash, which they can do, if they suddenly can sell stock at an inflated price. The short theses could have been self-fulfilling, but now things are going the other way. It's not really a violation of objective facts if the market decides to give these companies more capital. Who's to say they shouldn't get it? Especially with all the money showered on IPOs lately?

I used to think short selling was honorable, misunderstood, etc. but if it really is a self-fulfilling thing, maybe it isn't a social good, especially when the viability of a company is affected by the temporary situation with covid.

Maybe GME and similar should get a year's lifeline, for the good of all their stakeholders, because a lot could and almost certainly will change.

Some believe the other stocks are being pumped by the funds either through direct purchases or flooding social medias to divert focus from GME.

Has the SEC ever considered the market value of a stock false information in this way before?

Edit: and as to your first point, it has always been legal to say, hey, I am buying this stock, I like it, I recommend you buy it too. That alone is definitely not manipulation.

I really don't see how WSB posts about how GME is overshortted is any different from any of the other analysts DD.

>Wanting to move the price is sort of the smoking gun of manipulation.

That's the definition of shorting 100% of the float.

Borrow the stock of every active trader. Sell all stocks. Now the market looks like everyone, literally every single trader, is selling the stock and it is true because all of the actively traded stock was in possession of wallstreet who did indeed sell the stock.

People who are long in the stocks now get scared and sell their shares. That's how this strategy is making money for wallstreet. However, wallstreet kept shorting and shorting. From $24 per share to well below $3 and they never stopped shorting. They never closed their shorts even though going from $3 to 0 is only an extra $3 in profit but it massively increases exposure to a short squeeze and thus the potential for losses. They could have bought some options to cover their shorts and lock in profits at $6 and still have the upside of the stock going down to $0. They did neither.

It doesn't matter who buys GME. Anyone can buy the stock and go long and cause a short squeeze. Anyone. I think it is sad that I have to remind you that a short squeeze is not market manipulation. There is nothing to regulate except the short sellers and that is exactly why they try to find a scapegoat like WSB. When you fucked up and are about to get investigated just stirr up the media and control the narrative.

Sometimes identical products trade at different venues, often different products at different venues are highly correlated. HFTs reduce the friction of value transfer between these many different markets. They are, in a sense, building the neurons that make up the global economic central nervous system. It's a natural and healthy market phenomenon. The benefits are systemic, which requires some perspective to appreciate. In the course of a decade or two, HFT has permanently cemented itself into the fabric of the finance.

All this talk about front running is uninformed utter nonsense.

And it's that novelty that makes this newsworthy.