Jumped on the $GME bandwagon on Friday, 4 @ ~316. My 36 hours of day trading has already taught me that no matter how this plays out, I will never YOLO on a bubble ever again.
The principle seemed straightforward: hedge funds got lazy/greedy, over-shorted their positions, bet against a company that wasn't actually going under, and some astute monkies on reddit caught them and triggered a short squeeze. Even as someone who knows almost nothing about the stock market, the basic premise makes sense. But the devil's in the details, and hype is blinding.
First red flag was when I realized DeepFuckingValue did not bet on the short squeeze, he bet on undervalued stock price over a year ago. He has also trimmed his position such that no matter what happens in the squeeze, he walks away with 8 figures. So the people screaming "if he's still in, I'm still in!" and "look at those brass balls, if he can lose $5MM in a day then I can hold" are really living up to the dumb ape meme. He didn't lose $5MM yesterday, he lost $5MM in *unrealized gains*, there is a *huge* difference.
Second red flag was a common sense idea that hedge funds won't go down without a fight, and they have literally billions of dollars and decades of experience. You don't get that without learning how to game the system in complex, subtle ways. So even if they are still heavily shorted (which they might not even be anymore), and even if somehow WSB is holding some kind of meaningful leverage over them, that doesn't rule out the very real possibility they have a dozen ways out of this that people like me have no idea about.
But even in the off chance that somehow this turns around, and $GME does go "to the moon," that doesn't change the fact that it's bad long-term strategy to bet on bubbles and jump on bandwagons. They almost certainly fail, and if they don't, they only serve to inflate egos that will fall even harder on the next gamble. I'm still holding my shares but I don't expect to see my ~$1200 ever again. In the off chance I break even or see a profit here, I will count it as dumb luck and use it as seed money to learn how to invest in real long term gains.
Edit: holy shit RIP my inbox. No way I can read all that.
Want to clarify a few things. Not financial advice.
My position: I knew I was late to the party. I wanted to gamble. I knew what I was doing, and (mostly) why I did it. Hindsight showed me it was more based on emotion than I wanted to admit, but still, I'm not surprised by the outcome so far, and I'm totally OK with taking the L and calling it a lesson learned. I don't blame DFV, WSB, or anyone for my choices. I own them, even proudly, because I wanted to step out and take a calculated risk vs. sit on the sidelines out of fear of loss. I'm holding because I already bought my tickets to this ride, want to see this thing play out, and I'm fine with gambling the final $300 on the outside chance things turn around.
Your positions: brothers, sisters, nonbinary siblings: you are not your portfolio. whether up or down, your value is not based on how big or small an imaginary number is. you are a human being on the bleeding edge of 3.5 BILLION years of evolution, you have more actual success in your past and potential success in your future than you'll ever know. 12 years ago I was a penniless alcoholic literally stealing change from my grandpa to get loaded on 211 Steel Reserve. I hit my bottom, joined AA, and now I'm a network engineer, wife, kids, the whole lot. Anything is possible if you don't give up on yourself. But I know it's not that easy, we all need borrowed self-esteem before we can see the real value inside. So if this $GME gamble hit you hard, please reach out to someone. don't give up. Hell, this bubble isn't even over, it might even turn around! But either way, don't give up.
Edit2:
wow, never expected this to go this far. wrote it on my way out the door as a way to cope with the situation. read a ton of replies, probably missed most of them. thanks for all the love and hate and everything inbetween! A few more points:

• Agreed that RH deserves to be held accountable. No question they manipulated this.
• Agreed it's not over yet. the squeeze could happen. but if it does, my main personal takeaway from this experience will stand: I won't speculate on bubbles anymore. This is my position if I lose everything or make $100k.
• if you posted gains, that's awesome! so glad for you, I wish you the best!

Edit3 2/3/21:
Full disclosure, I closed my position this morning at a ~$900 realized loss.
My gut says the squeeze happened, short interest isn't what I thought it was on Friday, and the stock will return to actual value soon.

I’m not a financial adviser and this isn’t financial advice. I just have a knack for explaining things and lots of people have asked about this topic so I thought I’d share my own personal thoughts.

The bull thesis

To date, the GME play has been pretty simple: buy and hold and wait for the squeeze, whether that comes in hours, days, or weeks. Try not to have a heart attack during the intermittent gamma squeezes, keep your hands diamond strong during the manipulated downward spikes, and buy baby buy.
It’s rapidly becoming apparent that we will soon enter the GME endgame. Before you can come up with an exit strategy or, if you’re still on the fence, decide whether to jump in, you need to form an opinion about the GME bull thesis, without considering the short squeeze. Your thoughts on the bull thesis will dictate how you play it from here on out.
One braindead simple way to calculate a fair stock price for a company is to use a "times-revenue" valuation. You take the company's revenue ($6.466B in 2020) and multiply by some magic number (often 0.5 for low-growth companies and 2 for high-growth companies), then divide by the float (number of shares available to trade, 50.65M). A times-revenue multiplier of 0.5 gives a GME stock price of $64, while a multiplier of 2 gives $255.
This isn't a particularly sophisticated method but whatever, I'm not a particularly sophisticated investor.
Working backwards, if Melvin Capital thinks that GME is overpriced at $20 then a times-revenue valuation would suggest a multiplier of 0.16. That's extraordinarily low for a retail business. If you applied that multiplier to Best Buy ($43B revenue in 2020, 231.59M float) you would get a stock price of $30. Best Buy currently trades for $115, which works out to a much more reasonable multiplier of 0.62.
What multiplier is correct? Well, the bulls point out:

• Ryan Cohen (13% stake in GME, sits on the board) has a great e-commerce success story with Chewy, his previous company.
• Three new successful e-commerce board members from Cohen's firm were added to the board in 2020.
• Despite being a brick-and-mortar business and the pandemic, Gamestop's balance sheet isn't bad. They have approx. $550M in debt, but more than that in cash (net cash positive). They have minimal risk of default or bankruptcy in the near future, even without any change to company direction.
• Their traditional core business of game and console sales is not shrinking as fast as many people expected, with major new consoles still supporting optical discs and digital game downloads not accelerating as fast as feared, possibly due to stagnation in the ISP industry. So even if Cohen and his board seats take a long time to roll out new changes, the company is in little danger of any sudden spiral.

So is Melvin right and GME is a dead-end company with no growth potential and should be valued with a times-revenue multiplier vastly below its competitors? Or is it more appropriate to think of it as a brand new business, being spring-boarded off the healthy books of an existing brand by a successful e-commerce businessman alongside a revamped board?
How you judge that determines your exit strategy.

Exit strategy 1: Just along for the ride

Maybe you don't care at all about GME's balance sheet or Cohen's planned turnaround, you bought a couple shares on a whim to be part of a unique movement. You don't intend to be a long-term Gamestop shareholder nor do you really care if you miss out on the highest peaks, so long as you make a few dollars and get to say you were part of the squeeze.
If I were this person, what would I do? I'd pick a number between 0 and 3 that I feel represents my confidence in the retail market's current expectation for Cohen and GME, and multiply it by 128. I'd submit a limit sell order for all my shares at that share price.

Exit strategy 2: Pants-shitting fear

You've got a handful of shares and maybe some options and you're up big. You don't know much about squeezes or fundamentals or greeks and every time there's a dip and the stock gets halted you shit your pants and your finger hovers over the sell button. But then the price jumps up and you wipe the drenching sweat off your face and promise to hold firm next time.
If I were this person, what would I do? I'd sell all my options that expire sooner than 30 days at market open to reduce the number of pairs of pants I'm going through. I'd keep all my shares and longer-dated options until the news comes out that the shorts are being liquidated. And I'm not watching hedge fund managers get on Fox Business or CNBC or whatever, I'm following WSB and Twitter for rapid fire updates about short volume. If the short volume as reported by WSB posters drops below, say, 50% I'm selling everything and getting out. I might also pick a maximum times-revenue multiplier (something pretty high, like 4 or 5) and use that for a limit sell for shares.

Exit strategy 3: Diamond hands

You've got bigger balls than most, and this isn't your first time dumping a significant fraction of your net worth into a company whose financials you've never looked at. You want to ride it to the peak, if at all possible, and you want to impress the pants shitters and the weak-kneed with your maximum gains. You are ok with increasing your cost basis to squeeze out extra tendies on the way to the top.
If I were this person, what would I do? I'd sell my weeklies on open tomorrow and immediately plow every dollar of those 20-bagger returns into shares. If my longer-dated options were purchased at extreme IV I'd do the same for them, otherwise I'd let them ride. I wouldn't sell a single share until the final squeeze, when news comes out that Melvin is done, and then I'd unload (in my pants). See you on the moon, brother.

Exit strategy 4: u/DeepFuckingValue

IF HE'S STILL IN I'M STILL IN

FAQ 1: Is it too late to get in?

The best way to judge this is by looking at the exit strategies. Which person are you? If you're (1) then sure, buy a share or two to be part of a once-in-a-decade event, but think of it as a fun expense - a ticket to ride the squeeze train - not an investment. If you're (2) then hell yeah buy those shares baby but avoid options unless there's a dip. If you're (3) or (4) then you're already in and lying to your wife about how deep.

FAQ 2: Was that the squeeze?! Is it over?

This must get posted every time there's a gamma squeeze. It's midmorning and price suddenly launches into the stratosphere, trading halts, and it crashes back down. No, that wasn't the squeeze. Gamma squeezes occur when options prices are rising (due to sudden increased options buying or volatility) faster than market makers can hedge. They're good to get your heart racing but a short squeeze is slower and more stable.

FAQ 3: How high will it go during the squeeze?

Who knows. $500? $1000? $2000? There's really no way to know. If you have the stones to get those max tendies then you should focus on listening to the emerging news about Melvin Capital and Citadel rather than watching the price. Sell when they're covering and not a moment before. That will be the peak.

FAQ 4: How long will this take?

Could be tomorrow morning, could be tomorrow afternoon, could be next week. At the rate that shorts are losing money it won't be much longer than that. If you're not in yet, this is the final boarding call.

FAQ 5: Who will buy our shares at the peak?

The idea behind selling at the peak isn't to sell your shares to another retail trader, but to sell your shares to the desperate short sellers who are forced by their prime brokers to liquidate their positions at any cost. That's the difference between a perfectly legal and time-honored short squeeze and a pump-and-dump. This isn't about irrationally driving the price upwards with the hopes of selling to a bigger idiot, it's about buying and holding and waiting for the shorts to crack and beg us to sell to them.

FAQ 6: What is the next stock?

Get this thought out of your head. Yeah you just joined WSB and made a few bucks and now you think you found yourself an investment club. No. This is a forum for folks to share their risky trade ideas, not a place to coordinate to manipulate the market. Yes, at the moment the consensus is that we can make a boatload of money off of dumbass hedge funds, but think of it less like a pack of draft horses following a path and more like a room of angry, shitting monkeys who happen, for the time being, to be throwing their shit in the same direction.

FAQ 7: Am I gay?

Many of us grow up to assume that we’re straight only to find out, later, that we’re not. Sometimes, we realize this because we have sex dreams, sexual thoughts, or feelings of intense attraction toward people of the same gender as us. However, none of those things — sex dreams, sexual thoughts, or even feelings of intense attraction — necessarily “prove” your orientation. There are a few different forms of attraction. When it comes to orientation, we usually refer to romantic attraction (who you have strong romantic feelings for and desire a romantic relationship with) and sexual attraction (who you want to engage in sexual activity with). Sometimes we’re romantically and sexually attracted to the same groups of people. Sometimes we’re not. For example, it’s possible to be romantically attracted to men but sexually attracted to men, women, and nonbinary people. This sort of situation is called “mixed orientation” or “cross orientation” — and it’s totally OK. Bear this in mind as you consider your sexual and romantic feelings.
Edit: - Thank you for all the awards and comments! - I didn’t write the gay part at the end. Read more here if you’re... ahem... curious. - For the new folks who keep trying to fondle my balls, I’m not some genius or WSB autist-in-chief, I’m a bit player. I can’t get intercede with the mods or whatever you want me to do. - Stop messaging me asking what you should do. Yes, Melvin Capital has been reported to have covered. You have to decide for yourself whether the squeeze is underway or complete and you should exit or whether you want to hold out for more, or take some profits and hold, or whatever. I just gave you a rough guide and some explanation of different thought processes, you have to make the call for yourself.
Important: This post is very outdated now but it’s still getting comments, so if you’re just seeing this for the first time make sure you’re caught up on the current state of the market and all the other, more recent posts about GME.

EDIT: Added a warning because people in the comments seem to think I’m trying to manipulate people
WARNING: THIS IS AN EXTREMELY RISKY PLAY: THERE ARE NO METRICS OR CURRENT DATA TO PROVIDE SOLID DD TO HAVE A MORE “CERTAIN” OUTCOME. WHAT YOU ARE TRULY BETTING ON IS OTHER PEOPLE. I WONT TRY TO CONVINCE YOU WHAT TO DO WITH YOUR MONEY. THIS IS MY SPECULATION, MY OPINION AND IT VERY WELL COULD BE WRONG
Hello all,
I wanted to post last night as many of you commenters have asked for however my building lost power and it was absolutely awful. I am currently a refuge and my ladies house and wanted to get this out to the world.
Disclaimer: I am not a financial advisor, but more importantly this is all simply speculation. If anyone wants to make counter claims they are more than welcome but word of advice to all readers. If anyone is claiming that they know exactly what is going to happen...they are lying. There simply isn't enough current data to push this either direction. I am a bull, big time and I would like to explain why.
First let's talk about yesterday
There are a lot of claims of short ladder attacks and the counter-claim is that it was MM's moving the price down. One thing appears certain, there is some sort of manipulation happening in an attempt to drive the price down. Whether this is MM's, HF's, or simply retail shorts and bears; there are a strange number of exchanges happening in a clear effort to lower the price. You can check out the real time quotes here.
Another large thought about why the price should have gone up yesterday was because of the options thats expired Friday 1/29 ITM. The rule is T+2 meaning these individuals have two business days to cover. Well, we expected a surge of these individuals covering and it simply never came. Everyone was glued to the screen Friday ATH waiting to see the spike of covering...but it never happened. Monday again...never happened. Tuesday...oh boy this is their last day they have to cover! Yet...they didn't. So what does this mean? Well, I see two possibilities.

1. They somehow timed it perfectly and covered throughout the dips and spikes
2. They haven't covered yet

I'm in the camp of number 2 hence why I am a bull. If they didn't cover that results in a Failure to Deliver which you can learn about here. So what does this mean for us? Well, that would explain the tremendous price drop as FTD's create "phantom shares" a problem GME is already facing. This will dilute the price tremendously and the amount of FTD's that probably occurred would greatly dilute the price. "With forward contracts, a party with a short position's failure to deliver can cause significant problems for the party with the long position. This difficulty happens because these contracts often involve substantial volumes of assets that are pertinent to the long position's business operations." From the earlier mentioned website regarding FTD's.
Now this is truly fascinating. The 2008 crisis was largely in part due to a mass number of FTD's. In fact, FTD's sometime intentionally happen...just to drive the price down for FUD so they can then cover at a better price.
So if this is correct, what happens next? Well, either you can read about it here. Simply put, the individual has to close out the positions after 13 consecutive settlement days of FTD. So all this logic about T+2 was actually just the logic to begin the FTD countdown, if it hasn't already started at the beginning of this.
Now, I'm not saying "nobody sold" of course people did. But volume is key and the interest in buying outweighed the interest in selling 3-1 Monday and Tuesday. Of course trades are 1-1 but interest was on the buyer side.
Obviously, I don't even need to mention it but restricted trading really is what screwed this thing to begin with. My opinion? It wasn't to prevent a massive short squeeze, it was to buy them time.
Today
So why the hell did it spike this morning? Two reasons.

1. RH still has 100 shares limit on GME, now for those who don't realize, that doesn't mean that is 100 shares per day. No no. The restriction is you can own up to 100 shares of GME. If you already own over 100 shares that's fine, but anyone with less than 100 shares can only add up to that amount. This restriction has not changed and other companies such as Revolut are still imposing a 100% trading restriction on GME. So what did RH offer today? The ability to purchase fractional shares, which doesn't help a whole lot but the fact that buying pressure accelerated at the notion of fractional shares shows that there is still an immense amount of buyers out there.
2. GameStop adds new CTO to the roster, an ex AWS lead engineer. They added other executive positions as well. This further cements the change the company is taking.

Now, before I get into the rest I want to address something: the fundamentals.
There is a disturbing echo chamber around the idea that GameStop is a dying brick and mortar retailer and there is no chance at survival. That is simply not the case. I don't want to do a full GME DD here because this is about the second incoming squeeze. However, let me put it to you this way:
If you were told that a new company was IPO'ing and it was coming to the market with an infrastructure, new talented team, 50 million customers and their plan was to become an e-commerce company to compete with Amazon; their plans for the physical locations was to be game-centric, a place for e-sports to compete, desktop building kiosks, and the newest systems and physical copies of games for those who still love having a physical copy. Not just that, but this company already has revenue share deals with Microsoft and other bigwig companies.
Knowing all that information would you be interested in this company? My answer is an easy yes. The thing with digital transformation and companies changing direction is people get so lost in what the company used to be they can't see what the company is planning on becoming. If this was a brand new company that Ryan Cohen was leading with the same exact model people would be all over the concept.
Enough of that. Let's talking about what is still going on today which is truly fascinating.
So the good news created a large uptick follow by a combination of people escaping with whatever gains they could salvage and some more clear manipulation regardless of the source. But then what? Well, after the bounce down a lot of people saw this as a fantastic buying opportunity which made it recover quickly...but then something interesting started happening. It started uptrending. Slowly. Steadily. Uptrending. Lower lows, higher highs; no sight more beautiful.
My interpretation? We found the bottom of the bears attack. The news has been consistently saying the squeeze is over but one and at time they are saying their might be a second surge and their reasoning is if retailors see this price drop as a buying opportunity instead of red flags, it will surely send the price up. The logic there is simple: if people are buying stock it goes up, if people are selling, it goes down.
So today is pure magic. It doesn't need to be a wild swing up to be promising. What it needs to be is slow, consistent buying pressure even during restricted trading.
But all the shorts covered! Simply not true. That is a fact. All we know is what people are telling us. Melvin says they covered. It will be the third time they have claimed that. Do I think they covered? Yes, I do. Does that matter? No. Now even if Melvin and others covered and the S3 figures are right that means the guess right now is that this stock is still 57% short. Based on their Twitter this isn't including newly opened positions which anyone in their right mind would certainly open a short position when it was 3-400. They thought this bubble would pop and they would make a quick buck. They saw it get down to $85 and started celebrating...but it starting climbing...uh oh.
Truth is, no one will know the real numbers until the 9th. I think it's a little too much tin foil hat to says those numbers will be misconstrued but what we have witnessed over the past few days...it's possible.
So let's talk about who is currently holding GameStop. Well, a shit ton of degenerates that have lost millions of dollars and seemingly don't give a shit. They are here out of principle, truth be told, so am I. I absolutely refuse to give any shares to the shorts after the crap they pulled last week. So we have a ton of bag holders refusing to sell and a ton of people wondering if now is the time to get in for a potential epic second short squeeze. No one is going to sell at these levels. Some people here and there but it simply isn't worth it, not with so much potential for a second squeeze.
So when will this second squeeze happen?
If the newest shorts are smart, it already begun. If I took up a short position and saw this start climbing again after everything it has been through, you better believe I would be covering now while I have profits. Not all of them are going to do this, which is why as the price gradually rises the potential for a larger and larger squeeze is exponential. There is no telling when it will happen. It could be a slow climb for the next couple of weeks before it pops. The 9th will be a huge indicator of what is to come, if that has anywhere above 50% short interest you better believe everyone is going to hop right back into it. It could happen as early as this week. It could be post earnings when Papa Cohen tells us his majestic plans during ER. It could be that ER will actually be fantastic on 03/05 because it will have the console cycle numbers. Look at GME charts in the past, the console cycle always makes the stock pop and with all this attention that very well could be the catalyst.
In summary
I wanted to do deeper analysis for you all but I knew some of you were really looking forward to the next post and my thoughts regarding the situation so I wanted to get something out there. In my opinion, a second surge, a second squeeze is bound to happen. This is a buying opportunity for those who missed the first one and I think the market and stock price is reflecting that sentiment.
Positions:
1100 GME @ $16 closed
500 GME @ $20 closed
50 GME @ $120 open
236 GME @ $250 open
​
TL;DR: I have yet to see any indication or good thesis to explain why the short squeeze would be over. Even if Melvin covered and even if S3 numbers are correct at a 57% short, these are indicators of another squeeze, potentially even more epic. The bleeding days of red on Monday and Tuesday I personally think was a combination of panic selling when premarket and ATH didn't blow up due to the ITM calls and phantom shares being created due to consistent FTD's diluting the share price. I do think these FTD's were intentional and what many are perceiving as a short ladder attack is in fact the creation and purchasing of phantom shares driving the price down. If you are a bagholder, I think it wise to hold, if you have already closed your position I would consider what we are witnessing as another buying opportunity.
Final disclaimer. I have already made a significant sum of money on this GME play. This post is not a hope that you will come rescue me from my bagholding status. The money I put back in was money I was willing to lose and I came back in out of principle to stick it to the man. Good luck everyone and be grateful to be alive during this time, this will go down in financial history quite possibly forever. Retail investors have more power than we think.

There's a rich kid in town. Let's call him Melvin. He thinks he's really smart. He finds a coupon for $20 off the new Nintendo Switch during the holidays with no limit on number of units. This is easy. I'll go ahead and sell the Switch now for $200 and then buy it for $180 with the coupon. Easiest $20 I'll ever make. He goes and tells all his parents' friends at the Citadel Country Club that he can get them the new Nintendo Switch for their kids. He collects $200 each from 150 parents. He now has $30K and will use that money to purchase Nintendo Switches for $27K. He'll have earned $3K in just a few hours. His parents will be so proud.
There's another kid watching Melvin this entire time. Let's call him Keith. Keith doesn't like Melvin. Keith is good friends with the guys over at Gamestop. He finds out that there are were only 100 new Switches shipped to the entire country. Keith and his 99 friends buy all 100 Nintendo Switches on the spot.
Later in the day, Melvin goes to Gamestop with his $20 off coupon and says, "I'll take 150 Nintendo Switches please." Gamestop guy looks at him and says, "Sorry, we're all sold out." Melvin goes to the next Gamestop. Same story. All sold out. He goes to all the Gamestops in the city and can't find a single Switch. He won't be able to fulfill the orders.
Meanwhile, Keith is telling all his friends about what Melvin promised the members at the Country Club. Nobody sell him the Nintendo Switch that you bought, no matter how much he offers you. Nobody likes Melvin, so everybody holds on to their Nintendo Switch.
Melvin is in trouble. His parents rich friends are all asking when they are getting their Nintendo Switch. Melvins parents are angry, but they don't want to lose their standing in the Citadel Country Club. They have to help Melvin gets 150 Nintendo Switches. Now remember there are only 100 Switches in the city, but Melvin has created the expectation among the parents that there are 150. This is how you get a short percentage over 100%. Melvin has promised more than actually exist.
The price of Nintendo Switches in the city skyrockets. Melvins parents were able to get a few units from Keiths friends, but they had to pay really inflated prices for them, first $1,000, then $2,000, now $3,000. It's nearing Christmas, and every rich parent at the Country Club is desperate for the Nintendo Switch they promised their kids. They can't trust that Melvin will be able to get them one. They all start bidding against each other for Switches. Everybody in town is in on the action now. Everybody wants to get a Nintendo Switch to sell at the country club for $10,000. Meanwhile, Keith and his friends are just hanging out and playing Animal Crossing.
[Edit 1: Thanks for all the love and awards. I'm really grateful. I'll try to answer as many question as I can on the thread and in the DM's]
[Edit 2: A few astute monkeys have pointed out some flaws in my story. The example above is an oversimplification and I left a few important elements. So here's an expanded version and I've had to adjust some of the numbers above to make room for new wrinkles.
In a more accurate version, Melvin went to his brother Steve's high school and borrowed 150 Nintendo Switches from the high schoolers. He tells them all that if he doesn't give them back within 24 hours, he will give them each $5 per day. The high schoolers know that it's not likely that Melvin will give it back in 24 hours, so they will be perfectly happy to collect $5 per day. He sells the 150 Switches to the Country Club parents for $200 each, but now he owes 150 Switches to the high schoolers. This is a naked short. He sold Switches that were borrowed but didn't own. Let's assume the Country Club parents wrapped the Switches and they are now under the tree and out of circulation. Although there are 250 Switches in the city, there are now only 100 Switches in circulation (Keith's friends). So you have a situation where Melvin owes 150 Switches to high schoolers and there are only 100 available (150% short position of float). Melvin is overconfident and thinks he will get 150 Switches same day or at the very worse case, the day after, and maybe have to pay 150 Switches x $5 penalty = $450. He'll still have made $3,000-$450 = $2,550. The $5 penalty due to the high schoolers is interest or Melvin's carrying costs, so the longer Melvin cannot get the Switches, the more expensive it's going to be for him. After 4 days, he's at break even and will lose $450 for each day he cannot get a Switch. It gets very expensive for Melvin and his parents very quickly. This is what's happening for the past week or so for GME. The hedge funds are bleeding money every day they cannot fulfill the IOU.
For those who are asking why Melvin doesn't just pay off the high schoolers with money, let's say that the new Zelda game is coming out and they all want to play. They also know that the price of Switches is rising. Even if Melvin offered $800 or $1,000 to cancel the IOU, they know that they can no longer get a Switch on the open market. In addition, the high schoolers are probably aware of the rising trend in Switch prices. They may think that it's better to wait for a Switch that will be worth $15,000 in a few days than to get paid off by Steve now for $1,000. So while it's possible that Melvin could buy his way out of it, it's very difficult.]

Update 2/4 - someone went ahead and spelled out the mechanics of the squeeze quite well and I would like to give their post attention https://www.reddit.com/wallstreetbets/comments/lc8vgo/slv_is_not_going_to_get_squeezedslv_is_the_trojan/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Update 2/2 - I am able to comment again. I messaged several mods on Reddit and the mod account on Twitter. None of them responded but it appears I am able to comment again so I assume one of them lifted my ban
Update 2/1 - I have been banned from posting on WSB. I guess they aren’t yet deleting my post here given the media attention. If this was a rogue mod I’d appreciate being restored the ability to post on WSB. I’m open to talking to any mods
Update 1/31 - there have been tons of 'what to buy' questions so I added a clarity post, hope it helps. It's also getting downvoted to hell because its not about GME so that's discouraging. The speed at which the downvotes flew in makes me think someone made bots to crush new posts related to SLV (or maybe anything not GME). It makes no sense for this post to have 93% upvotes and my new one to have 28%.
I have not sold my GME to buy SLV. I had a small pre-existing position in leaps I bought months ago.
Created an official Twitter handle not sure if I’ll use it, but didn’t want anyone to impersonate me on there
Here is the longer DD for the short squeeze case for SLV, a follow-up from my shorter post a few hours ago. Note that I talk in first person as this is something I’m going to do. Everyone is free to do as they individually please and copy my trade if they’d like to. I think it’s absurd that forces at be think this forum is manipulating by posting publicly but that’s where we are at right now.
First things first, I'm not doing this until the GME rise is done. I am long GME but am going long SLV immediately after.
Update 1/29: due to the manipulation and collusion of citadel, hedge funds, and brokers to change the rules and rig the game in their favor. Who likely knew ahead of time and bought puts right before and calls at the bottom, GME is too important to abandon still. SLV is still my next play but GME needs to go to $1000 and these people need to go to jail.
If you just want to know what to buy skip to the end
I present 2 investment DDs in this post, the short squeeze and the fundamentals. If you want to see what to buy
The short squeeze:
Buy SLV shares and SLV call options to force physical delivery of silver to the SLV vaults. Also buy physical silver bullion. The best possible thing would be to take physical delivery in the futures market if you have access to do so.
The silver futures market has oscillated between having roughly 100-1 and 500-1 ratio of paper traded silver to physical silver, but lets call it 250-1 for now. This means that for every 250 ounces in open interest in the futures market, only 1 actually gets delivered. Most traders would rather settle with cash rather than take delivery of thousands of ounces of silver and have to figure out to store and transport it in the future.
The people naked shorting silver via the futures markets are a couple of large banks and making them pay dearly for their over leveraged naked shorts would be incredible. It's not Melvin capital on the other side of this trade, its JP Morgan. Time to get some payback for the bailouts and manipulation they've done for decades (look up silver manipulation fines that JPM has paid over the years).
The way the squeeze could occur is by forcing a much higher percentage of the futures contracts to actually deliver physical silver. There is very little silver in the COMEX vaults or available to actually be use to deliver, and if they have to start buying en masse on the open market they will drive the price massively higher. There is no way to magically create more physical silver in the world that is ready to be delivered. With a stock you can eventually just issue more shares if the price rises too much, but this simply isn't the case here. The futures market is kind of the wild west of the financial world. Real commodities are being traded, and if you are short, you literally have to deliver thousands of ounces of silver per contract if the holder on the other side demands it. If you remember oil going negative back in May, that was possible because futures are allowed to trade to their true value. They aren't halted and that's what will make this so fun when the true squeeze happens.
Edit for more detail: let’s say there’s one futures seller who gets unlucky and gets the buyer who actually wants to take delivery. He doesn’t have the silver and realizes it’s all of a sudden damn difficult to find some physical silver. He throws up his hands and just goes long a matching number of futures contracts and will demand actual delivery on those. Problem solved because he has now matched the demanding buyer with a new seller. The issue is that the new seller has the same issue and does the exact same thing. This is how the cascade effect of a meltup occurs. All the naked shorts trying to offload their position to someone who actually has some silver. My goal is to ensure that I have the silver and won’t sell to them until silver is at a far higher price due to the desperation.
The silver market is much larger than GME in terms of notional value, but there is very little physical silver actually readily available (think about the difference between total shares and the shares in the active float for a stock), and the paper silver trading hands in the futures market is hundreds of times larger than what is available. Thus when they are forced to actually deliver physical silver it will create a massive short squeeze where an absurd amount of silver will be sought after (to fulfill their contractually obligated delivery) with very little available to actually buy. They are naked shorting silver and will have to cover all at once and the float as a percentage of the total silver stock globally is truly miniscule.
The fundamentals:
The current gold to silver ratio is 73-1. Meaning the price of gold per ounce is 73 times the price of silver. Naturally occurring silver is only 18.75 times as common as gold, so this ratio of 73-1 is quite high. Until the early 20th century, silver prices were pegged at a 15-1 ratio to gold in the US because this ratio was relatively known even then. In terms of current production, the ratio is even lower at 8-1. Meaning the world is only producing 8 ounces of silver for each newly produced ounce of gold.
Global industry has been able to get away with producing so little new silver for so long because governments have dumped silver on the market for 80 years, but now their silver vaults are empty. At the end of WW2 government vaults globally contained 10 billion ounces of silver, but as we moved to fiat currency and away from precious metal backed currencies, the amount held by governments has decreased to only 0.24 billion ounces as they dumped their supply into the market. But this dumping is done now as their remaining supply is basically nil.
This 0.24 billion ounces represents only 8% of the total supply of only 3 billion ounces stored as investment globally. This means that 92% of that gold is held privately by institutions and by millions of boomer gold and silver bugs who have been sitting on meager gains for decades. These boomers aren't going to sell no matter what because they see their silver cache as part of their doomsday prepper supplies. It's locked away in bunkers they built 500 miles from their house. Also, with silver at $23 an ounce currently, this means all of the worlds investment grade silver only has a total market cap of $70 billion. For comparison the investment grade gold in the world is worth roughly $6 trillion. This is because most of the silver produced each year actually gets used, as I have mentioned. $70 billion sounds like a lot, but we don’t have to buy all that much for the price to go up a lot.
**If the squeeze happens, it would be like 40 years worth of their gains in 4 months **
The reason that only 8 ounces of silver are produced for every 1 ounce of gold in today's world is because there aren't really any good naturally occurring silver deposits left in the world. Silver is more common than gold in the earth's crust, but it is spread very thin. Thus nearly every ounce of silver produces is actually a byproduct of mining for other metals such as gold or copper. This means that even as the silver price skyrockets, it wont be easy to increase the supply of silver being produced. Even if new mines were to be constructed, it could take years to come online.
Finally, most of this newly created silver supply each year is used for productive purposes rather than kept for investment. It is used in electronics, solar panels, and jewelry for the most part. This demand wont go away if the silver price rises, so the short sellers will be trying to get their hands on a very small slice of newly minted silver. The solar market is also growing quickly and political pressure to increase solar and electric vehicles could provide more industrial demand.
The other part of the story is the faster moving piece and that is the inflation and currency debasement fear portion. The government and the fed are printing money like crazy debasing the value of the dollar, so investors look for real assets like precious metals to hide out in, driving demand for silver. The $1.9 trillion stimulus passing in a month or two could be a good catalyst. All this money combined with the reopening of the economy could cause some solid inflation to occur, and once inflation starts it often feeds on itself.
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What to buy:
Edit 2/24: I now advocate buying PSLV for shares, physical metal if the premiums come back down, and if you want options then SLV is still ok for that.
I will be putting 50% directly into SLV shares, and 50% into the $35 strike SLV calls expiring 4/16. This way the SLV purchase creates a groundswell into silver immediately that then rockets through a gamma squeeze as SLV approaches $35. Price target of $75 for SLV by end of April if the short squeeze happens.
Edit: for the part of your purchases going into shares, some people recommend PSLV because they think SLV might start lying about having the silver in their vault. Or that the custodian will be double counting, ie claiming that the same silver belongs to multiple people (banking on the fact that people wont all try to get their silver at once). So if you buy SLV shares and calls, that's great. But I think it could be prudent for us to buy options in SLV (no options on PSLV) and shares in PSLV. It all depends on how paranoid you want to be. There is a lot of paranoia in the precious metals world.
Alternate options:
- buying physical silver; this also works but you pay a premium to buy and sell so its less efficient and you take fewer silver ounces off of the market because of the premium you pay
- going long futures for February or March; if you are a rich bastard and can actually take physical delivery of 1000s of ounces of silver by all means do so. But if you simply settle for cash you are actually part of the problem. We need actual physical delivery, which is what SLV demands and is why SLV is the way to go unless you are going to take delivery
- miners; I don’t recommend buying miners as part of this trade. Miners will absolutely go up if SLV goes up, but buying them doesn't create the squeeze in the actual silver market. Furthermore, most silver miners only derive 30-50% of their revenue from silver anyways, so eventually SLV will outperform them as it gets high enough (and each marginal SLV dollar only increases miner profits by a smaller and smaller percentage)
Details on SLV physical settlement:
When SLV issues shares, the custodian is forced to true up their vaults with the proportional amount of silver daily. From the SLV prospectus:
"An investment in Shares is: Backed by silver held by the Custodian on behalf of the Trust. The Shares are backed by the assets of the Trust. The Trustee’s arrangements with the Custodian contemplate that at the end of each business day there can be in the Trust account maintained by the Custodian no more than 1,100 ounces of silver in an unallocated form. The bulk of the Trust’s silver holdings is represented by physical silver, identified on the Custodian’s or, if applicable, sub-custodian's, books in allocated and unallocated accounts on behalf of the Trust and is held by the Custodian in London, New York and other locations that may be authorized in the future."
Join me brothers. Lets take silver to the moon and take on the biggest and baddest manipulators in the world. Please post rocket emojis in the comments as desired.
Disclaimer: do your own research, make your own decisions, everything here is a guess and hypothetical and nothing is guaranteed, not a financial advisor, I have ADHD and maybe other things too.
Bear case: silver does tend to sell off if the broader market plunges so it’s not immune to broad market sell off. It’s also the most manipulated market in the world so we are facing some tough competition on the short side

Imagine you are a gambler enjoying a night at the casino. You decide to play Blackjack. Your hand is a ten and the dealer shows a 7.
"I would like to hit."
"No sir. You are only allowed to stand or surrender."
"That's not the rules of the game. Aren't you regulated?"
"Due to the votality your hand represents to the Casino, sir, you are only allowed to stand or surrender. These are extraordinary times."
"...are you only allowed to stand or surrender?"
"No sir. In fact, we may double down."
"Wait. What? You are the dealer, you can't put more money in that I didn't put in. That money doesn't even exist on the table!"
"Sir, you have a gambling problem. We might have to report the commission on you for attempting to hit with your hand because your friend told you that you should."
"Wait, are you trying to make me fold?"
"Sir, we reported you to the newspaper for being a degenerate."
"You guys are crazy!"
"Sir, we have decided that in order to protect your interests, you have decided to surrender."

Tonight’s report has been built up to be a make or break point for GME. I want to caution my fellow autists from reading too much into this single piece of data. Let’s start with what we know about tonight’s report:
1) This report is based on self reported data.
2) The fine for misreporting, if caught, is pennies on the dollar compared to the costs to cover.
3) The data report covers up until the 29th.
So what are the possible outcomes:
1) Data is accurate, HF covered: I believe at this point GME becomes a long play. There is the potential for an acquisition or a turn around/pivot in the business model. The play is buy (DCA) and hold.
2) Data is accurate, HF did not cover: I believe the play here would be to buy as much as you can. This would push up the price pushing more expiring calls ITM and put further pressure on the HF. We would likely get a significant influx of new investment interest from retail and the squeeze is on. The play is buy and hold.
3) Data is inaccurate: This is the most likely outcome given the money at stake. If it shows they haven’t covered then there would be no real sense in putting out false data. If it shows they have covered then it becomes a gut call. Personally, the continued bots and media coverage seem to still indicate that something is amiss otherwise why go through all that effort, expense, etc. The play is buy (DCA) and hold.
In all three scenarios buy and hold seems to be the most prudent course of action. The only reason to sell IMHO is if you believe GME will go bankrupt.
Ok so I’m going to buy if I can or continue to hold ... what could happen that would turn this around?
1) If not covered, a whale investor or fund deciding to purchase this serving as a catalyst for a true squeeze. Elon, Cuban, another HF, etc. Personally,I have my Tesla in my shopping cart already.
2) If not covered, GME reverse stock split. This could force a true squeeze though likely would not happen until the stock gets back into single digits.
3) If not covered, emergency shareholder meeting. My understanding this would cause a recalling of shares to allow the shareholders to vote, this initiating the squeeze.
4) If covered or uncovered, significant renewed public interest in GME. A lot more likely if uncovered, but it’s a strange world we live in so I wouldn’t completely rule it out if they covered.
5) If covered or uncovered, GME public offering of 10 million shares at $x price (we will say $200). This sets a bottom for the stock in the short term, I believe most who are already in the stock would see value in putting billions into the company coffers either for stock support on a cash balance basis or to be a war chest to facilitate the turn around. I am actually a bit puzzled why this hasn’t already been done.
6) If covered, GME being acquired by a major player at a reasonable price. This would ensure continuing good will from the existing shareholders and would ensure the GameStop name lives on.
7) If covered, GME makes a strategic purchase or alliance that then starts to justify a higher evaluation.
Obviously these are the thoughts of some retarded ape. Full disclosure, I am currently down around 100k in my positions on GME. In my mind, the invested funds were completely lost at the moment of purchase so it doesn’t bother me to hold forever or until I win, whichever comes first. 🦍🙌💎🚀🌕
Edit: The report is supposed to reflect until the 29th.
Update: It appears the FINRA report officially states 78.46%.

Good evening you pieces of shit,
Why do you keep doubling down on your short positions? Why are new hedge funds are coming in and scooping up new short positions? What the fuck are you shitstains on society doing? What the fuck is wrong with you? Do you understand who we are?
We don’t fucking play here. We lose money for fucking breakfast. Every day. And then we come back and lose even more fucking money. We buy out of the money weeklies on fucking THURSDAYS. We don’t give a fuck. This is what we do. We do this. We don’t fucking play around. We come here to risk it all. We come here to YOLO our children’s college funds away just to post memes about it.
Your plan was really just to put us in a position where all we have to do is hold SHARES? Say less fam. I haven’t owned a share in four years. I sold AAPL AMD and ENPH calls last week just to buy shares of GameStop and fuck you up as much as possible so we can make memes about it.
Double down, triple down, quadruple down, take every penny of your rich boomer clients money and put it on the table. Sink the entire already artificially propped up economy over it. We know you will. And because we know you will, we are going to make you do it. Just like the coyote blindly chasing the roadrunner off of a fucking cliff. Chop off your whole head to spite your face.
Take all your boomer ass money and put it on the table. We are here for it. My shares are available for $10,000 before 6 pm today. For every hour after that, Im asking another $250. Go fuck yourself.

OG poster u/PlayFree_Bird
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Alright, I hate to say it, but there is some less-than-ideal information circulating out there, particularly about the famed "gamma squeeze" we hear so much about these days. I'll get to that. Let's go through the questions you simpletons want to know, as explained by a mouth-breathing fool who has managed to convince you he knows what he's talking about:

Did we win today? Is it endgame?

Kind of. Be patient.

In what ways did we win?

First, there was the obvious victory of bouncing back 65% today after the worst market manipulation I've ever witnessed. We kept the upward momentum going.
Secondly, every day you finish higher is another day the shorts are underwater. If you are perpetually going up, the walls are closing in on them.
Finally, a lot of put options expired worthless today while a number of call options expired in-the-money. It's always good to make put holders lose money because you drain the bank accounts of people betting against you.

Yes! Call options! We finished above $320 and get a gamma squeeze to infinity now, right?

No. That's not how this works. Too many people don't quite understand what a gamma squeeze is.
A gamma squeeze happens when call option sellers (or "writers") have to hedge their naked calls by buying stocks. They do this because the risk of selling naked calls is theoretically infinite if they don't. It's called delta hedging. You don't need to know all the fancy math ("delta" and "gamma" are those greek symbols for nerds), just understand this: as it becomes more probable that the call option you sold will cost you money, you hedge more.
This is a continuous PROCESS, not a discreet moment in time. The market makers and hedge funds and institutions selling you calls don't wake up on Friday morning and think, "Shit! I think I'm going to lose everything if these stocks keep going up! I have to BUY NOW!!!" That would be stupid. They are hedging all the way up. I guarantee you that most of the calls that were exercised at $320 today were already covered. They already went out and bought those shares and most of the upwards pressure that places on the market is priced in already.

So, no gamma squeeze?

Probably not significantly. They're not going to be madly rushing out on Monday to buy shit they already own for the most part.

Why are people talking about a gamma squeeze at $320, then?

We did have a gamma squeeze at $320. On Wednesday, two days ago. The price exceeded $320 (then the highest strike price on the books) and promptly surged to $371 before coming back down to around $320. That's what a gamma squeeze is: a frenzied rush by call sellers to cover calls.
It typically happens BEFORE expiration, not after. It's rare for market makers to get so caught with their pants down that they have to get squeezed for the previous week's calls on a Monday. I don't know where this idea of a gamma squeeze now at $320 is coming from.

This hurts my feelings. So, what's so great about the $320 threshold, anyway? Did it matter at all?

It's still a good thing. There may have been a few lingering naked calls to cover. And, like I said, it's always good to make put-holders lose money because stick it to the 🌈🐻, that's why.
$320 was a significant level because there were quite a few open call options at that strike. You can see the entire option chain here: https://www.nasdaq.com/market-activity/stocks/gme/option-chain
Go through and count up all the January 29th options that were in-the-money at today's close. I think maybe 90,000 or something? Screw it, I didn't count. Somebody who can figure out how to use a calculator can add those up. Multiply that number by 100 (because option contracts are sold in groups of 100) and that's how many shares need to change hands thanks to contracts expiring ITM.
It may be that with so many shares needing to change hands and so little liquidity in this market, some weird things could happen.

What weird things?

Well, if nothing else, a lot of shares will need to be tied up as the process of settling calls plays out.
You have to remember that when somebody says they own shares, they don't necessarily own own the shares right at that moment.
When you press "buy" on your phone and it says your order was filled, that doesn't mean that the process happens instantaneously. For all intents and purposes as far as you are concerned, sure, the process looks instant. However, there's a lot of messy stuff that happens on the back-end of the system between the brokers and the clearing houses. The clearing houses are where the daily tab gets settled: who owes whom and what they owe and at what price, etc.
Monday could be interesting as this tab for millions of stocks (in a market with only 50-something million shares actively circulating) gets settled. It might not be crazy, but it could. We'll see.
Michael Burry (Christian Bale, for all you noobs) seems to think that all the naked short-selling above the float will result in a shit-storm when people actually go to get their shares back: https://twitter.com/michaeljburry/status/1355221824661983233
Liquidity crunch + lots of shares being moved around + nobody knows where they all are currently = potential nightmare for Wall Street.

I just want my infinite short squeeze and my tendies, so how do we get the MOASS?

Something needs to be the catalyst. Something needs to get the short sellers really underwater, so much so that they are drowning. That's why there's been so much hype about gamma squeezes; the gamma and short squeezes are two separate things, but the gamma squeezing has been really good to us lately. It has triggered some crazy upwards price movements. I still think one was about to happen yesterday morning that would have triggered the squeeze-pocalypse, the Mother of All Short Squeezes. The bastards at the brokerages (acting with and for the clearing houses), took your tendies. It's criminal what played out.
I actually think a gamma squeeze was possible today, as well, as the price shot up to $378 around noon. If it had gotten to $400, it stood a very good chance of running up to $500, which would have caused a run up to $650 and beyond. Then Robinhood said, "Oh, actually, you plebs cannot buy 5 shares anymore, only 2 now." The price came back down again.
Oddly enough, the S&P500 sold off over a full percentage point (that's a lot of money) right after GME hit that $378 peak. Do you think this doesn't freak the finance world out? They know a gamma squeeze is like the fuse on a firework. It consumes itself until it ignites the rocket.

How will Wall Street defend themselves?

They will try to keep snipping the fuse. That's what all these restrictions on brokerages are about. They are trying to defuse the situation slowly because having it all get sorted out quickly and frantically is no good for them.
We need enough upwards price momentum that those option chains keep going up and up and feeding on themselves. They need to become a self-sustaining chain reaction, fed by hedging pressure. And you need to put pressure on your elected representatives to tell them that Wall Street cannot be allowed to just shut down the game when they are losing. I hate to tell you this, but the squeeze has so far been stopped purely by the losers declaring that it will not happen at any cost. It's bullshit. Eat the rich. But there it is.

Do you feel you've used the word "squeeze" too much by now?

Yes. I've been writing and looking at the word "squeeze" so much that it is starting to lose its meaning. Squeeze. Squeeze. Squeeeeeeze.
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EDIT:
TL;DR Shares most likely already bought so no gamma squeeze, doesn't matter anyway 🙌💎🚀 🙌💎🚀 🙌💎🚀
EDIT 2:
STOP THANKING ME FOR THIS POST, RETARDS! Literally the first sentence is me giving credit to the original poster, THANK HIM.

First of all, I can't wait to be berated in the comments.
I'm gonna be blunt, I have seen a whole lot of dumb shit over the last week. A lot more than normal. And compounding all of that is an unprecedented amount of legitimate emotional involvement here. So let me get started by saying outright that people getting emotionally involved with trading stocks always lose. Short, long, whatever. It doesn't matter if you're a 19 year old throwing in your life savings or Bill fucking Ackman not being able to admit he was wrong with Herbalife. Letting your emotions be a major factor in trading is a fantastic way to lose money.
And a whole lot of you are really emotionally involved with this GME, AMC, whatever.
To the point: I am not making a buy/sell/hold/whatever recommendation. I have no special insight in to what's happening with GME or whatever else. What I can tell you is that it is for sure not worth $300.
So let's dispel one quick thing: this is not David vs Goliath. It also isn't the little man vs hedge funds or WSB vs big finance. It might have started out that way, but if you only read one thing read this:

Many of the big retail brokerages, including Robinhood, route a lot of their customer orders to Citadel Securities, so it ends up seeing a large percentage of retail trades in U.S. stocks. It can see if retail traders are mostly buying or mostly selling or mostly pretty balanced. You might expect—I certainly expected—to see that retail traders were buying more than they were selling this week. The stock seemed to be rocketing up on frenzied retail sentiment, and the posters on WallStreetBets were all claiming that they would never sell and keep buying until it hit $1,000.
But here’s what Citadel Securities’ retail flow looked like in GameStop this week: 1
Graphic here
Retail investors were net buyers on Monday but net sellers for the rest of the week (through yesterday), and all in all quite balanced: About 49.8% of retail orders (that Citadel Securities saw) were to buy, and 50.2% were to sell.
What do you make of that? One reading would be: “Retail investors on Reddit might have started the GameStop rally, but they’re not piling into this stock now, and the price action this week is coming from professionals.” Or as one Twitter user put it, “past the retail ignition, the rocket ship was mostly intra-fast money warfare.”

So, just to be clear about this, there is massive institutional money on both sides of this trade, and retail is a toddler sitting at the world series of poker.
Understand that melvin does not need to cover in the way a retail trader needs to cover. You, and everyone else, have no idea what Melvin's position looks like, and they can reorganize and exit a position before you ever knew it happened. You don't know how hedged they are, you don't know what their collateral looks like, and you don't know if they've covered and restructured a short at last week's prices. You simply don't know. You only know what's been presented in the news, which is almost certainly bullshit.
This thing could come to an end as fast as it started and you won't know what happened for weeks. You might go take a shit at 1pm today and come back to GME trading at $16 because Ken Griffin got on CNBC and announced they restructured their short at an average price of $200, and were happy to sit on it. Make no mistake, you'll get kicked in the nuts and have your ball taken away faster than you can comprehend.
Emotions The problem with this whole "strike back at wall street" narrative is that lots of you are getting really worked up over this trade. Losing money sucks, but losing money and feeling like you got shit on by the big guy is going to hurt. This isn't a moral crusade to them, it's 25 billion dollars. So if you're out here putting money and emotions on the line that you can't afford to lose there won't be a happy ending.
Want to fight the good fight against wall street? Write your congressman, Tweet AOC or Ted Cruz, get you a fucking picket sign and go wave it around on the streeet. But dropping money on GME that you need in life ain't gonna change anything except your net worth.
TLDR:
1) know and understand who is playing this game. And that they have access to tools, leverage, and markets that you do not. You're playing Le Chiffre at Casino Royale right now, you might think you're James Bond but there's a good chance that you're just the fat dude in the corner.
2) Short squeezes end fast. As fast as they started. If you're new to trading then understand buying GME at this price can mean all of your money will evaporate before you had time to make a TikTock about it.
3) Get your emotions out of play here. This whole nonsense political narrative is only going to cause you to make trading mistakes. Can't handle that? then maybe it's not a good idea to sit at this table.
Lastly, if you really just can't get yourself out of the whole "fight the hedge funds" nonsense, at least understand that you're spending money that you likely won't get back. If that's worth it to you then have at it. But don't fool yourself in to thinking otherwise.
E: Completely unrelated: I hate reddit awards, reddit doesn't need your money. Go buy like a hundredth of a share of VTI or something.

It is the first time that the financial market is being used against the same monsters who bet on the failures of companies and enjoy manipulating the markets and impoverishing investors.
At least, it is the first time it is happening in front of my eyes and I can actively be part of it.
What is happening has become very serious, but it is experienced with that romanticism and irony that is not often seen in the world of the stock market.
The thing that no one mentions, however, is the incredible contribution that the GME affair is making to global financial culture. Not only are the videos of youtubers explaining what's going on increasing exponentially, but the incredible thing is that even influencers and youtubers completely outside the stock and financial game are talking about it.
The consequence of this is that a lot of people are getting informed, they are trying to understand what is happening, why it is happening, and what are the rules and mechanisms that are permitting this situation.
This wave of information is spreading at lightning speed financial concepts that have always remained obscure to most people.
In short, ordinary people are opening their eyes. Financial education, albeit minimal, is beginning to be part of the cultural baggage of young and old alike. And this will have huge consequences in the future.
This meme, and the whole GME situation, is opening the eyes to the world. I could compare it to the boost that the first trips to the moon gave to space engineering, or the boost to Karate gyms after the success of the movie Karate Kid, or the boost to medical culture that the pandemic that's hitting us is giving.
This, gentlemen, ladies and gentlemen, is the major event that is revolutionizing economic culture from the ground up. And each one of you is a part of it. And each one of you will be able, one day, to proudly say "f**k money, that time we were the protagonists".
Be honest: who else would have had such an opportunity to use money as a tool against the powerful market manipulators without GME?
This is why what is happening is not a meme anymore. The world will be different afterwards.
tl;dr
The GME Affair is changing the world's financial culture forever. No more financial ignorance, no more "under the mattress" investments. No more underhanded economic power plays.
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Edit:
I am not native English speaker, and in my country "gentlemen" is an ironic way to say "my dears" without any gender reference. My apologies, I fixed it!

My ex and I divorced three years ago. She was cheating, but at this point I don’t care about the relationship anymore. The pending lawsuit has nothing to do with her or him, but rather their actions.
My ex and I have a son 13m that we split time with 50/50. He’s a great kid that interests have changed a lot tbh as I imagine more kids/teenagers tend to do through the years.
One thing my son was heavily into at some point was legos. He use to play with them all the time, and personally I think they’re a great toy for different reasons. I use to love playing them with him, and to this day I still collect boxes that I leave unopened as a collection.
Well when my ex and I divorced she got with someone who loved legos more I guess? From what I know he loves making creations and building the sets in. I don’t care.. seems cool. He does one thing I think is very very weird.. He uses crazy glue so the sets can’t break or pieces can’t be lost. It seems so weird to me.
The issue is, I was out of town for all of three days last week for medical reasons, and my son wanted to get his ps4 so he could play it at his moms. This isn’t out of the ordinary at all and he has a key, so he let me know he would be stopping over for it. I told him to have fun when I saw him on the entry camera. My wife’s husband was with him which was a no-no. I told him via speaker to not go in and to wait on the porch.
He flinched but walked in any way. I sent my ex a text telling her to call him and tell him he’s one minute away from a cop call. He left my home with a bag in hand which I didn’t think much of because my son had his games too.
Well my son texted me later that evening and said he didn’t know it at the time but he’s pretty sure SD took some of my sets. These are all old sets and two are worth big money. When I got home I confirmed the missing sets and called my ex. She had no idea but he admired he took them but it was so son could have the sets to complete his collection... my son doesn’t even like legos anymore and told his mom he wouldn’t steal from me.
My wife asked how much it would cost to replace them and unfortunately it’s more than their savings. Actually, it would take their house down payment plus more. I told them if they didn’t pay in two weeks I was suing and pressing charges. The price in the sets makes it a felony.
My ex and her husband are saving for a house which would give my son more space when he’s there, but those sets were going help pay for his education someday or a home of his own. I filed the police report and have talked to a lawyer and we’re moving forward with the suit.
Everyone is calling me a joke because they are just toys, but I don’t get it. They are worth real money.. I’m not rich guys. I needed those to help with my sons future... but again taking this money does deny my son things at his moms house.
AITA here??
Edit* I’ve been asked to add these facts.
The sets have been opened which more than half their worth, and one was glued together. The damage was done already.
The stolen items are:
Kings Castle Milk truck Lego land train Carousel And the glued one was a Star Wars snow speeder.
Some of these are one piece of a larger set. So if you lose one of five, you lose the value of one produce plus the value of the set as a whole.
Second edit*
Ex wife and boyfriend are the same as ex boyfriend.. I’m just a bad writer.
Third/final edit for this post*
I know I haven’t been here much but I have read many of your comments and taken them to heart. I know my spelling is poor guys, and I apologize for the format. Calling me names in my private message was not called for, and I am not a scalper. I enjoy buying these sets and do not intend to sell all of them, but I want my son to go to college and not worry about debt, so I want to sell the ones that I can to help. I never had the smarts for higher education but my son is not me, and I love him and want him to do better.
Around 4:00 PM I called the local state police and met at their facility. I gave them all I had and gave my statement.
My son is with me starting tonight so when I picked him up I sent him into GameStop and called his mom. I told her I had filed charges and I asked the cop to call me when everything was done so I could give him the opportunity to turn himself in. I wanted to be better than he treated me. I’ll save her reaction for a real update btw—- can someone please tell me how to update because I don’t really understand the steps in the main notes.
I told my son when we got home what I did and why. My son said that I did the right thing because he didn’t want his step dad to think it was ok to do it again, and if he didn’t go to jail he’d rather be her away from him so it isn’t weird.

Disclaimer: I am not a financial advisor. This entire post represents my personal views and opinions, and should not be taken as financial advice (or advice of any kind whatsoever). I encourage you to do your own research, take anything I write with a grain of salt, and hold me accountable for any mistakes you may catch. Also, full disclosure, I hold a net long position in GME, but my cost basis is very low (average ~$67--I have to admit, the drop today was too tasty so my cost basis went up from yesterday)/share with my later buys averaged in), and I'm using money I can absolutely lose. My capital at risk and tolerance for risk generally is likely substantially different than yours. In this post I will go a little further and speculate more than I'd normally do in a post due to the questions I've been getting, so fair warning, some of it might be very wrong. I suspect we'll learn some of the truth years from now when some investigative journalist writes a book about it.
Thank you everyone for the comments and questions on the first and second post on this topic.
Today was a study in the power of fear, courage, and the levers you can pull when you wield billions of dollars...
Woops, excuse me. I'm sorry hedge fund guys... I meant trillions of dollars--I just briefly forget you control not just your own but a lot of other peoples' money too for a moment there.
Also, for people still trading this on market-based rationale (as I am), it was a good day to measure the conviction behind your thesis. I like to think I have conviction, but in case you are somehow not yet familiar with the legend of DFV, you need to see these posts (fair warning, nsfw, and some may be offended/triggered by the crude language). The last two posts might be impressive, but you should follow it in chronological order and pay attention to the evolution of sentiment in the comments to experience true enlightenment.
Anyway, I apologize, but this post will be very long--there's just a lot to unpack.

Pre-Market

Disclaimer: given yesterday's pre-market action I didn't even pay attention to the screen until near retail pre-market. I'm less confident in my ability to read what's going on in a historical chart vs the feel I get watching live, but I'll try.
Early in the pre-market it looks to me like some momentum traders are taking profit, discounting the probability that the short-side will give them a deep discount later, which you can reasonably assume given the strategy they ran yesterday. If they're right they can sell some small volume into the pre-market top, wait for the hedge funds try to run the price back down, and then lever up the gains even higher buying the dip. Buy-side here look to me like people FOMOing and YOLOing in at any price to grab their slice of gainz, or what looks to be market history in the making. No way are short-side hedge funds trying to cover anything at these prices.
Mark Cuban--well said! Free markets baby!
Mohamed El-Erian is money in the bank as always. "upgrade in quality" on the pandemic drop was the best, clearest actionable call while most were at peak panic, and boy did it print. Your identifying the bubble as the excessive short (vs blaming retail activity) is money yet again. Also, The PAIN TRADE (sorry, later interview segment I only have on DVR, couldn't find on youtube--maybe someone else can)!
The short attack starts, but I'm hoping no one was panicking this time--we've seen it before. Looks like the momentum guys are minting money buying the double dip into market open.
CNBC, please get a good market technician to explain the market action. Buy-side dominance, sell-side share availability evaporating into nothing (look at day-by-day volume last few days), this thing is now at runaway supercritical mass. There is no changing the trajectory unless you can change the very fabric of the market and the rules behind it (woops, I guess I should have knocked on wood there).
If you know the mechanics, what's happening in the market with GME is not mysterious AT ALL. I feel like you guys are trying to scare retail out early "for their own good" (with all sincerity, to your credit) rather than explain what's happening. Possibly you also fear that explaining it would equate to enabling/encouraging people to keep trying to do it inappropriately (possibly fair point, but at least come out and say that if that's the case). Outside the market, however...wow.

You Thought Yesterday Was Fear? THIS is Fear!

Ok short-side people, my hat is off to you. Just when I thought shouting fire in a locked theater was fear mongering poetry in motion, you went and took it to 11. What's even better? Yelling fire in a theater with only one exit. That way people can cause the financial equivalent of stampede casualties. Absolutely brilliant.
Robin Hood disables buying of GME, AMC, and a few of the other WSB favorites. Other brokerages do the same. Even for people on 0% margin. Man, and here I thought I had seen it all yesterday.
Side note: I will give a shout out to TD Ameritrade. You guys got erroneously lumped together with RH during an early CNBC segment, but you telegraphed the volatility risk management changes and gradually ramped up margin requirements over the past week. No one on your platform should have been surprised if they were paying attention. And you didn't stop anyone from trading their own money at any point in time. My account balance thanks you. I heard others may have had problems, but I'll give you the benefit of the doubt given the DDOS attacks that were flyiing around
Robin Hood. Seriously WTF. I'm sure it was TOTALLY coincidence that your big announcements happen almost precisely when what has to be one of the best and most aggressive short ladder attacks of all time starts painting the tape, what looked like a DDOS attack on Reddit's CDN infrastructure (pretty certain it was the CDN because other stuff got taken out at the same time too), and a flood of bots hit social media (ok, short-side, this last one is getting old).
Taking out a large-scale cloud CDN is real big boy stuff though, so I wouldn't entirely rule out nation state type action--those guys are good at sniffing out opportunities to foment social unrest.
Anyway, at this point, as the market dives, I have to admit I was worried for a moment. Not that somehow the short-side would win (hah! the long-side whales in the pond know what's up), but that a lot of retail would get hurt in the action. That concern subsided quite a bit on the third halt on that slide. But first...
A side lesson on market orders
Someone printed bonus bank big time (and someone lost--I feel your pain, whoever you are).
During the face-ripping volatility my play money account briefly ascended to rarified heights of 7 figures. It took me a second to realize it, then another second to process it. Then, as soon as it clicked, that one, glorious moment in time was gone.
What happened?
During the insane chop of the short ladder attack, someone decided to sweep the 29 Jan 21 115 Call contracts, but they couldn't get a grip on the price, which was going coast to coast as IV blew up and the price was being slammed around. So whoever was trying to buy said "F it, MARKET ORDER" (i.e. buy up to $X,XXX,XXX worth of contracts at any price). This is referred to as a sweep if funded to buy all/most of the contracts on offer (HFT shops snipe every contract at each specific price with a shotgun of limit orders, which is far safer, but something only near-market compute resources can do really well). For retail, or old-tech pros, if you want all the contracts quickly, you drop a market order loaded with big bucks and see what you get... BUT, some clever shark had contracts available for the reasonable sum of... $4,400, or something around that. I was too stunned to grab a screencap. The buy market order swept the book clean and ran right into that glorious, nigh-obscene backstop limit. So someone got nearly $440,000 PER CONTRACT that was, at the time theoretically priced at around $15,000. $425,000 loss... PER CONTRACT. Maybe I'm not giving the buyer enough credit.. you can get sniped like that even if you try to do a safety check of the order book first, but, especially in low liquidity environments, if a HFT can peak into your order flow (or maybe just observes a high volume of sweeps occurring), they can end up front running your sweep, pick off the reasonable contracts, and slam a ridiculous limit sell order into place before your order makes it to the exchange. Either way, I hope that sweep wasn't loaded for bear into the millions. If so... OUCH. Someone got cleaned out.
So, the lesson here folks... in a super high volatility, low-liquidity market, a market order will just run up the ladder into the first sell order it can find, and some very brutal people will put limit sells like that out there just in case they hit the jackpot. And someone did. If you're on the winning side, great. It can basically bankrupt you if you're on the losing side. My recommendation: Just don't try it. I wouldn't be surprised if really shady shenanigans were involved in this, but no way to know (normally that's crazy-type talk, but after today....peeking at order flow and sniping sweeps is one of the fastest, most financially devastating ways to bleed big long-side players, just sayin').
edit *so while I was too busy trying not to spit out my coffee to grab a screenshot, piddlesthethug was faster on the draw and captured this: https://imgur.com/gallery/RI1WOuu
Ok, so I guess my in-the-moment mental math was off by about 10%. Man, that hurts just thinking about the guy who lost on that trade.*
Back to the market action..

A Ray of Light Through the Darkness

So I was worried watching the crazy downward movement for two different reasons.
On the one hand, I was worried the momentum pros would get the best discounts on the dip (I'll admit, I FOMO'd in too early, unnecessarily raising my cost basis).
On the other hand, I was worried for the retail people on Robin Hood who might be bailing out into incredibly steep losses because they had only two options: Watch the slide, or bail. All while dealing with what looked to me like a broad-based cloud CDN outage as they tried to get info from WSB HQ, and wondering if the insta-flood of bot messages were actually real people this time, and that everyone else was bailing on them to leave them holding the bag.
But I saw the retail flag flying high on the 3rd market halt (IIRC), and I knew most would be ok. What did I see, you ask? Why, the glorious $211.00 / $5,000 bid/ask spread. WSB Reddit is down? Those crazy mofos give you the finger right on the ticker tape. I've been asked many times in the last few hours about why I was so sure shorts weren't covering on the down move. THIS is how I knew. For sure. It's in the market data itself.
edit So, there's feedback in the comments that this is likely more of a technical glitch. Man, at least it was hilarious in the moment. But also now I know maybe not to trust price updates when the spread between orders being posted is so wide. Maybe a technical limitation of TOS
I'll admit, I tried to one-up those bros with a 4206.90 limit sell order, but it never made it through. I'm impressed that the HFT guys at the hedge fund must have realized really quickly what a morale booster that kind of thing would have been, and kept a lower backstop ask in place almost continuously from then on I'm sure others tried the same thing. Occasionally $1,000 and other high-dollar asks would peak through from time to time from then on, which told me the long-side HFTs were probably successfully sniping the backstops regularly.
So, translating for those of you who found that confusing. First, such a high ask is basically a FU to the short-side (who, as you remember, need to eventually buy shares to cover their short positions). More importantly, as an indicator of retail sentiment, it meant that NO ONE ELSE WAS TRYING TO SELL AT ANY PRICE LOWER THAN $5,000. Absolutely no one was bailing out.
I laughed for a minute, then started getting a little worried. Holy cow.. NO retail selling into the fear? How are they resisting that kind of price move??
The answer, as we all know now... they weren't afraid... they weren't even worried. They were F*CKING PISSED.
Meanwhile the momentum guys and long-side HFTs keep gobbling up the generously donated shares that the short-side are plowing into their ladder attack. Lots of HFT duels going on as long-side HFTs try to intercept shares meant to travel between short-side HFT accounts for their ladder. You can tell when you see prices like $227.0001 constantly flying across the tape. Retail can't even attempt to enter an order like that--those are for the big boys with privileged low-latency access.
The fact that you can even see that on the tape with human eyes is really bad for the short-side people.
Why, you ask? Because it means liquidity is drying up, and fast.

The Liquidity Tide is Flowing Out Quickly. Who's Naked (short)?

Market technicals time. I still wish this sub would allow pictures so I could throw up a chart, but I guess a table will do fine.
​

Date	Volume	Price at US Market Close
Friday, 1/22/21	197,157,196	$65.01
Monday, 1/25/21	177,874,00	$76.79
Tuesday, 1/26/21	178,587,974	$147.98
Wednesday, 1/27/21	93,396,666	$347.51
Thursday, 1/28/21	58,815,805	$193.60

What do I see? I see the shares available to trade dropping so fast that all the near-exchange compute power in the world won't let the short-side HFTs maintain order flow volume for their attacks. Many retail people asking me questions thought today was the heaviest trading. Nope--it was just the craziest.
What about the price dropping on Thursday? Is that a sign that the short-side pulled a miracle out and pushed price down against a parabolic move on even less volume than Wednesday? Is the long side running out of capital?
Nope. It means the short-side hedge funds are just about finished.
But wait, I thought the price needed to be higher for them to be taken out? How is it that price being lower is bad for them? Won't that allow them to cover at a lower price?
No, the volume is so low that they can't cover any meaningful fraction of their position without spiking the price parabolic almost instantly. Just not enough shares on offer at reasonable prices (especially when WSB keeps flashing you 6942.00s).
It's true, a higher price hurts, but the interest charge for one more day is just noise at this point. The only tick that will REALLY count is the last tick of trading on Friday.
In the meantime, the price drop (and watching the sparring in real time) tells me that the long-side whales and their HFT quants are so certain of the squeeze that they're no longer worried AT ALL about whether it will happen, and they aren't even worried at all about retail morale to help carry the water anymore.
Instead, they're now really, really worried about how CHEAPLY they can make it happen.
They are wondering if they can't edge out just a sliver more alpha out of what will already be a blow-out trade for the history books (probably). You see, to make it happen they just have to keep hoovering up shares. It doesn't matter what those shares cost. If you're certain that the squeeze is now locked in, why push the price up and pay more than you have to? Just keep pressing hard enough to force short-side to keep sending those tasty shares your way, but not so much you move the price. Short-side realizes this and doesn't try to drive price down too aggressively. They can't afford to let price run away, so they have to keep some pressure on at the lowest volume they can manage, but they don't want to push down too hard and give the long-side HFTs too deep of a discount and bleed their ammo out even faster. That dynamic keeps price within a narrow (for GME today, anyway) trading range for the rest of the day into the close.
Good plan guys, but those after market people are pushing the price up again. Damnit WSB bros and Euros, you're costing those poor long-side whales their extra 0.0000001% of alpha on this trade just so you can run up your green rockets... See, that's the kind of nonsense that just validates Lee Cooperman's concerns.
On a totally unrelated note, I have to say that I appreciate the shift in CNBC's reporting. Much more thoughtful and informed. Just please get a good market technician in there who will be willing to talk about what is going on under the hood if possible. A lot of people watching on the sidelines are far more terrified than they need to be because it all looks random to them. And they're worried that you guys look confused and worried--and if the experts on the news are worried....??!
You should be able to find one who has access to the really good data that we retailers can only guess at, who can explain it to us unwashed masses.

Ok, So.. Questions

There is no market justification for this. How can you tell me is this fundamentally sound and not just straight throwing money away irresponsibly?? (side note: not that that should matter--if you want to throw your money away why shouldn't you be allowed to?)
We're not trading in your securities pricing model. This isn't irrational just because your model says long and short positions are the same thing. The model is not a real market. There is asymmetrical counterparty risk here given the shorts are on the hook for all the money they have, and possibly all the money their brokers have, and possibly anyone with exposure to the broker too! You may want people to trade by the rules you want them to follow. But the rest of us trade in the real market as it is actually implemented. Remember? That's what you tell the retailers who take their accounts to zero. Remember what you told the KBIO short-squeezed people? They had fair warning that short positions carry infinite risk, including more than your initial investment. You guys know this. It's literally part of your job to know this.
But-but-the systemic risk!! This is Madness!
...Madness?
THIS. IS. THE MARKET!!! *Retail kicks the short-side hedge funds down an infinity loss black hole\*.
Ok, seriously though, that is actually a fundamentally sound, and properly profit-driven answer at least as justifiable as the hedge funds' justification for going >100% of float short. If they can be allowed to gamble INFINITE LOSSES because they expect to make profit on the possibility the company goes bankrupt, can't others do the inverse on the possibility the company I don't know.. doesn't go bankrupt and gets a better strategy from the team that created what is now a $43bn market cap company (CHWY) that does exactly some of the things GME needs to do (digital revenue growth) maybe? I mean, I first bought in on that fundamental value thesis in the 30s and then upped my cost basis given the asymmetry of risk in the technical analysis as an obvious no-brainer momentum trade. The squeeze is just, as WSB people might say, tendies raining down from on high as an added bonus.
I get that you disagree on the fundamental viability of GME. Great. Isn't that what makes a market?
Regarding the consequences of a squeeze, in practice my expectation was maybe at worst some kind of ex-market settlement after liquidation of the funds with exposure to keep things nice and orderly for the rest of the market. I mean, they handled the VW thing somehow right? I see now that I just underestimated elite hedge fund managers though--those guys are so hardcore (I'll explain why I think so a bit lower down).
If hedge fund people are so hardcore, how did the retail long side ever have a chance of winning this squeeze trade they're talking about?
Because it's an asymmetrical battle once you have short interest cornered. And the risk is also crazily asymmetrical in favor of the long side if short interest is what it is in GME. In fact, the hedge funds essentially cornered themselves without anyone even doing anything. They just dug themselves right in there. Kind of impressive really, in a weird way.
What does the short side need to cover? They need the price to be low, and they need to buy shares.
How does price move lower? You have to push share volume such that supply overwhelms demand and price therefore goes down (man, I knew econ 101 would come in handy someday).
But wait... if you have to sell shares to push the price down.. won't you just undo all your work when you have to buy it back to actually cover?
The trick is you have to push price down so hard, so fast, so unpredictably, that you SCARE OTHER PEOPLE into selling their shares too, because they're scared of taking losses. Their sales help push the price down for free! and then you scoop them up at discount price! Also, there are ways to make people scared other than price movement and fear of losses, when you get right down to it. So, you know, you just need to get really, really, really good at making people scared. Remember to add a line item to your budget to make sure you can really do it right.
On the other hand..
What does the long side need to do? They need to own as much of the shares as they can get their hands on. And then they need to hold on to them. They can't be weak hands either. They need to be hands that will hold even under the most intense heat of battle, and the immense pressure of mind-numbing fear... they need to be as if they were made of... diamond... (oh wow, maybe those WSB people kind of have a point here).
Why does this matter? Because at some point the sell side will eventually run out of shares to borrow. They simply won't be there, because they'll be safely tucked away in the long-side's accounts. Once you run out of shares to borrow and sell, you have no way to move the price anymore. You can't just drop a fat stack--excuse me, I mean suitcase (we're talking hedge fund money here after all)--of Benjamins on the ticker tape directly. Only shares. No more shares, no way to have any direct effect on the price whatsoever.
Ok, doesn't that just mean trading stops? Can't you just out-wait the long side then?
Well, you could.. until someone on the long side puts 1 share up on a 69420 ask, and an even crazier person actually buys at that price on the last tick on a Friday. Let's just say it gets really bad at that point.
Ok.. but how do the retail people actually get paid?
Well, to be quite honest, it's entirely up to each of them individually. You've seen the volumes being thrown around the past week+. I guarantee you every single retailer out there could have printed money multiple times trading that flow. If they choose to, and time it well. Or they could lose it all--this is the market. Some of them apparently seem to have some plan, or an implicit trust in certain individuals to help them know when to punch out. Maybe it works out, but maybe not. There will be financial casualties on the field for sure--this is the bare-knuckled capitalist jungle after all, remember? But everyone ponied up to the table with their own money somehow, so they all get to play in the big leagues just like everyone else. In theory, anyway.
And now, Probably the #1 question I've been asked on all of these posts has been: So what happens next? Do we get the infinity squeeze? Do the hedge funds go down?
Great questions. I don't know. No one does. That's what I've said every time, but I get that's a frustrating answer, so I'll write a bit more and speculate further. Please again understand these are my opinions with a degree of speculation I wouldn't normally put in a post.

The Market and the Economy. Main Street, Wall Street, and Washington

The pandemic has hurt so many people that it's hard to comprehend. Honestly, I don't even pretend to be able to. I have been crazy fortunate enough to almost not be affected at all. Honestly, it is a little unnerving to me how great the disconnect is between people who are doing fine (or better than fine, looking at my IRA) versus the people who are on the opposite side of the ever-widening divide that, let's be honest, has been growing wider since long before the pandemic.
People on the other side--who have been told they cannot work even if they want to, who wonder if congress will get it together to at least keep them from getting thrown out of their house if they have to keep taking one for the team for the good of all, are wondering if they're even living in the same reality.
Because all they see on the news each day is that the stock market is at record highs, or some amazing tech stocks have 10x'd in the last 6 months. How can that be happening during a pandemic? Because The Market is not The Economy. The Market looks forward to that brighter future that Economy types just need to wait for. Don't worry--it'll be here sometime before the end of the year. We think. We're making money on that assumption right now, anyway. Oh, by the way, if you're in The Market, you get to get richer as a minor, unearned side-effect of the solutions our governments have come up with to fight the pandemic.
Wow. That sounds amazing. How do I get to part of that world?
Retail fintech, baby. Physical assets like real estate might be a bit out of reach at the moment, but stocks will do. I can even buy fractional shares of BRK/A LOL.
Finally, I can trade for my own slice of heaven, watching that balance go up (and up--go stonks!!). Now I too get to dream the dream. I get to feel connected to that mythical world, The Market, rather than being stuck in the plain old Economy. Sure, I might blow up my account, but that's because it's the jungle. Bare-knuckled, big league capitalism going on right here, and at least I get to show up an put my shares on the table with everyone else. At least I'm playing the same game. Everyone has to start somewhere--at least now I get to start, even if I have to learn my lesson by zeroing my account a few times. I've basically had to deal with what felt like my life zeroing out a few times before. This is number on a screen going to 0 is nothing.
Laugh or cry, right? I'll post my losses on WSB and at least get some laughs.
Geez, some of the people here are making bank. I better learn from them and see if they'll let me in on their trades. Wow... this actually might work. I don't understand yet, but I trust these guys telling me to hold onto this crazy trade. I don't understand it, but all the memes say it's going to be big.
...WOW... I can pay off my credit card with this number. Do I punch out now? No? Hold?... Ok, getting nervous watching the number go down but I trust you freaks. We're still in the jungle, but at least I'm in with with my posse now. Market open tomorrow--we ride the rocket baby! And if it goes down, at least I'm going down with my crew. At least if that happens the memes will be so hilarious I'll forget to cry.
Wow.. I can't believe it... we might actually pull this off. Laugh at us now, "pros"!
We're in The Market now, and Market rules tell us what is going to happen. We're getting all that hedge fund money Right? Right?
Maybe.
First, I say maybe because nothing is ever guaranteed until it clears. Secondly, because the rules of The Market are not as perfectly enforced as we would like to assume. We are also finding out they may not be perfectly fair. The Market most experts are willing to talk about is really more like the ideal The Market is supposed to be. This is the version of the market I make my trading decisions in. However, the Real Market gets strange and unpredictable at the edges, when things are taken to extremes, or rules are pushed beyond the breaking point, or some of the mechanics deep in the guts of the Real Market get stretched. GME ticks basically all of those boxes, which is why so many people are getting nervous (aside from the crazy money they might lose). It's also important to remember that the sheer amount of money flowing through the market has distorting power unto itself. Because it's money, and people really, really, really like their money--especially when they're used to having a lot of it, and rules involving that kind of money tend to look more... flexible, shall we say.
Ok, back to GME. If this situation with GME is allowed to play out to its conclusion in The Market, we'll see what happens. I think all the long-side people get the chance to be paid (what, I'm not sure--and remember, you have to actually sell your position at some point or it's all still just numbers on your screen), but no one knows for certain.
But this might legitimately get so big that it spills out of The Market and back into The Economy.
Geez, and here I thought the point of all of this was so that we all get to make so much money we wouldn't ever have to think and worry about that thing again.
Unfortunately, while he's kind of a buzzkill, Thomas Petterfy has a point. This could be a serious problem.
It might blow out The Market, which will definitely crap on The Economy, which as we all know from hard experience, will seriously crush Main Street.
If it's that big a deal, we may even need Washington to be involved. Once that happens, who knows what to expect.. this kind of scenario being possible is why I've been saying I have no idea how this ends, and no one else does either.
How did we end up in this ridiculous situation? From GAMESTOP?? And it's not Retail's fault the situation is what it is.. why is everyone telling US that we need to back down to save The Market?? What about the short-side hedge funds that slammed that risk into the system to begin with?? We're just playing by the rules of The Market!!
Well, here are my thoughts, opinions, and some even further speculation... This may be total fantasy land stuff here, but since I keep getting asked I'll share anyway. Just keep that disclaimer in mind.

A Study in Big Finance Power Moves: If you owe the bank $10,000, it's your problem...

What happens when you owe money you have no way to pay back? It's a scary question to have to face personally. Still, on balance and on average, if you're fortunate enough to have access to credit the borrowing is a risk that is worth taking (especially if you're reasonably careful). Lenders can take a risk loaning you money, you take a risk by borrowing in order to do something now that you would otherwise have had to wait a long time or maybe would never have realistically been able to do otherwise. Sometimes it doesn't work out. Sometimes it's due to reasons totally beyond your control. In any case, if you find yourself there you have no choice but to dust yourself off, pick yourself up as best as you can, and try to move on and rebuild. A lot of people had to learn that in 2008. Man that year really sucked.
Wall street learned their lessons too. Most learned what I think most of us would consider the right lessons--lessons about risk management, and the need to guard vigilantly against systemic risk, concentration of risk through excess concentration of leverage on common assets, etc. Many suspect that at least a few others may have learned an entirely different set of, shall we say, unhealthy lessons. Also, to try to be completely fair, maybe managing other peoples' money on 10x+ leverage comes with a kind of pressure that just clouds your judgement. I could actually, genuinely buy that. I know I make mistakes under pressure even when I'm trading risk capital I could totally lose with no real consequence. Whatever the motive, here's my read on what's happening:
First, remember that as much fun as WSB are making of the short-side hedge fund guys right now, those guys are smart. Scary smart. Keep that in mind.
Next, let's put ourselves in their shoes.
If you're a high-alpha hedge fund manager slinging trades on a $20bn 10x leveraged to 200bn portfolio, get caught in a bad situation, and are down mark-to-market several hundred million.. what do you do? Do you take your losses and try again next time? Hell no.
You're elite. You don't realize losses--you double down--you can still save this trade no sweat.
But what if that doesn't work out so well and you're in the hole >$2bn? Obvious double down. Need you ask? I'm net up on the rest of my positions (of course), and the momentum when this thing makes its mean reversion move will be so hot you can almost taste the alpha from here. Speaking of momentum, imagine the move if your friends on TV start hyping the story harder! Genius!
Ok, so that still didn't work... this is now a frigging 7 sigma departure from your modeled risk, and you're now locked into a situation that is about as close to mathematically impossible to escape as you can get in the real world, and quickly converging on infinite downside. Holy crap. The fund might be liquidated by your prime broker by tomorrow morning--and man, even the broker is freaking out. F'in Elon Musk and his twitter! You're cancelling your advance booking on his rocket ship to Mars first thing tomorrow... Ok, focus--this might legit impact your total annual return. You need a plan, and you know the smartest people on the planet, right? The masters of the universe! Awesome--they've even seen this kind of thing before and still have the playbook!! Of course! It's obvious now--you borrow a few more billion and double down again first thing in the morning. So simple. Sticky note that Mars trip cancellation so you don't forget.
Ok... so that didn't work? You even cashed in some pretty heavy chits too. Ah well, that was a long shot anyway. So where were you? Oh yeah.. if shenanigans don't work, skip to page 10...
...Which says, of course, to double down again. Anyone even keeping track anymore? Oh, S3 says it's $40bn and we're going parabolic? Man, that chart gives me goosebumps. All according to plan...
So what happens tomorrow? One possible outcome of PURE FANTASTIC SPECULATION...
End of the week--phew. Never though it'd come. Where are you at now?... Over $9000^\)!!! Wow. You did it boys, and as a bonus the memes will be so sweet.
^\)side note: add 8 zeros to the end...
Awesome--your problems have been solved. Because...
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BOOM
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Now it's EVERYONE's problem. Come at me, Chamath, THIS is REAL baller shit.
Now all you gotta do is make all the hysterical retirees watching their IRAs hanging in the balance blame those WSB kids. Hahaha. Boomers, amirite? hate when those kids step on their law--I mean IRAs. GG guys, keep you memes. THAT is how it's done.
Ok, but seriously, I hope that's not how it ends. I guess we just take it day by day at this point.
Apologies for the length. Good luck in the market!
Also, apologies in advance for formatting, spelling, and grammatical errors. I was typing this thing in between doing all kinds of other things for most of the day.
Edit getting a bunch of questions on if it's possible the hedge funds are finding ways to cover in spite of my assumptions. Of course. I'm a retail guy trying to read the charts and price action. I don't have any special tools like the pros may have.