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Comment by baybal2 | Hacker News Reader

> They're specifically buying/selling short dated out of the money options in order to move the price.

This exactly what stock market speculation is about, is it?

Not when moving the price is the goal. If you trade specifically to create an unfair impression of the supply and demand of a stock that's market manipulation.

Thing is no one is going to prosecute a randomer on the internet for throwing $5k at an option especially when there's no proof that it was done in bad faith.

I just don't get how WSB is engaging in market manipulation more than the 136% shorts were.

Shorting a stock because you genuinely believe the company is crap is not market manipulation.

To be clear, market manipulation is very vague and very broad, and from what I've read the SEC is only going after you if there was fraud or lying involved. Most of WSB's activity is not illegal market manipulation.

Trading (or posting) to cause impact and affect other positions you have is manipulation too. But it's not really provable in the case of WSB so they're safe.

P.S. not legal advice

It is not market manipulation for short interest to rise above 100%. It doesn't require anything nefarious. No collusion between institutional investors required either.

I agree that neither group manipulated the market.

I referenced the % just as a convenient label for that group of market participants.

> If you trade specifically to create an unfair impression

What is a "fair impression," it's all up to owners of the paper to decide on selling price, nobody else can.

> Not when moving the price is the goal.

Market transactions don't move the price, its people doing them do.

No, almost all personal trading is buying stocks. Options are derivatives that give you the right, but not the obligation, to buy or sell a security based on some predetermined price at or before some predetermined time. They essentially provide leverage such that $1 out of the money option has a much larger market impact than a $1 purchase of a stock.

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