Gamestop went from 90 to 140 overnight in late/early trading - when retail on reddit are locked out.
This isn't a reddit, or even retail, pump and dump.
This isn't a reddit, or even retail, pump and dump.
Retail traders were not "locked out". Practically every retail brokerage offers extended hours trading, many from 4AM to 9PM.
Retail traders can't swing that kind of volume in the underlying shares, no. But retail call buying as a proportion of total equity options volume is up massively in the past two years. The trading leverage inherent to retail call options herding together combined with the requirement for market makers to hedge the options they sell induces these huge movements. From there, momentum traders exacerbate the spark that's already lit.
https://i.imgur.com/Rz1kUp7.mp4
EDIT: https://twitter.com/deitaone/status/1364957363724288000 "Gamestop Short Sellers Estimated To Have Lost $818 Million On Their Bearish Bets on Wednesday - Ortex"
update: literally 1st pair of comments i read in WSB on this one is:
"Lol Cramer is such a great actor. “What?! Seriously?!” What a douche"
"Is he okay? He was looking off camera so frequently I thought maybe they are holding his wife hostage there or something.
Cramer, buddy, blink twice if we should call the cops."
As a more general aside: take everything said on Cramer's show with a grain of salt. He is a deeply unserious character in the financial space. His angle is to be provocative, not accurate.
https://www.reuters.com/article/us-retail-trading-melvin/mel...
https://www.cnbc.com/2021/01/29/gamestop-short-sellers-are-s...
> Short-selling hedge funds have suffered a mark-to-market loss of $19.75 billion year to date in the brick-and-mortar video game retailer GameStop, according to data from S3 Partners.
Doesn't attribute losses to specific firms, but the damage is spectacular.
losses on options contracts arent limited to invested capital. AUM is irrelevant
i withdraw.
"Retail on reddit" doesn't use a broker that allows after-hours trading? Or am I reading this phrase incorrectly?
Of course it could be that nobody posting on reddit has a single share, and all the screenshots are just virtual profiles on various accounts, but if we're assuming what people on reddit are saying is broadly true then that's the case
Don't try to apply logic to this, it's meme trading, it's not meant to be rational.
edit: These are the only 3 platforms I have experience with, there are certainly others.
If you're still using Robinhood after what they pulled last month... that's on you.
Only in this age that a stock going up is bad.
Even if 10 million redditors were buying, that would be $1400 each. That's ridiculous
Retail can buy/sell call options overnight.
The Bloomberg opinion article states:
> Yesterday someone bought thousands of GameStop call options with an $800 strike price expiring tomorrow. They cost 87 cents per share. If the stock closes above $800 tomorrow those options will pay out; also though all notions of money and value and human society will be rendered meaningless, so I don’t know what you’ll do with your payout.
That hypothetical person YOLOing $100,000+ could very easily be a retail investor throwing away money for the lulz. Maybe someone who won big a few months ago and feels fine throwing their excess money away.
Open interest increases if someone opens a position.
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Open Interest is well over 10,000 on $800 GME expiring tomorrow. So __somebody__ bought-to-open call options at $800. (I presume the sell-to-open side of that call option is just the Market Maker who happened to close that deal, taking the free money).
This is well over $1-million USD being YOLO'd onto an outrageous bet (that GME is going to be over $800 tomorrow at 4:30pm).
https://www.nasdaq.com/market-activity/stocks/gme/option-cha...
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In any case, my point is that retail is absolutely allowed to trade options overnight. Just because stock market is closed doesn't mean that the options-market is closed. The options-market is 24/7.
Options are only traded during market hours.