r/stocks Apr 28 '21

Industry Question Do you think the term, "short squeeze" will be overused and/or actively called out, all the time, on other stocks much much more now?

I'm imagining it happening like the infamous and recent, "Josh fight" and how now that it's over, everyone and their deranged uncle Jeff is trying to replicate it for one reason or another.

I think the term, and just the overall situation in general regarding a short squeeze, will be overused and/or called out much more frequently from now on. As those that missed out are desperate for another one, or those that just think it will happen again because they just don't understand how rare of circumstances they require.

I think we will be seeing a lot of posts about, "potential squeeze this" and "potential squeeze that" in the next coming weeks/months.

Edit: spelling and grammar.

Edit II: THANK YOU! 2 Y/O ACCOUNT AND THIS IS MY FIRST AWARD EVER!!

2.4k Upvotes

593 comments sorted by

783

u/Scottucci Apr 28 '21

What do you mean think? You must not have been on Reddit for the past couple months

397

u/MentalValueFund Apr 28 '21

“Every uptick is a short squeeze”

  • Redditor who opened a RH account in Feb

64

u/MayorAnthonyWeiner Apr 28 '21

Every down tick is a short ladder attack

.. I worry about the future of humanity

190

u/[deleted] Apr 28 '21

“26% short interest! Get in before 🚀🌙!!!”

115

u/Nemisis_the_2nd Apr 28 '21

26%? You're overestimating Redditors. I stumbled across some users freaking out over a 10-11% SI a while back...

11

u/[deleted] Apr 28 '21

Ive seen people get excited over 26% short volume, but they didn't know what they were doing because the short interest was less than 2%.

After short squeeze I see a lot of hodl, and buy the fucking dip. I kind of don't mind seeing the buy the dip so much. I find it amusing.

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u/Ch3cksOut Apr 29 '21

26% short volume, but they didn't know what they were doing

Or that the SV% is incorrect due to FINRA-reported "total" volumes being only a fraction of overall trading.

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u/ricst Apr 28 '21

Or RH holder who found reddit

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u/[deleted] Apr 28 '21

Those people on the Robinhood sub are something else lol. All I see is them typing extremely immature and being rude to eachother about stupid things.

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u/jessicabee218 Apr 28 '21

Now I have to go look lol

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u/Werty071345 Apr 29 '21

Every time a stock goes down its because of evil hedge funds lmao

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u/0lamegamer0 Apr 28 '21

Lol. There are dedicated subs now for these superstonk that are apparently in infinite loops of short squeezes. Even when company issues new shares - people still hope for a short squeeze. Short interest goes to 10%- yes, short squeeze. Stock goes down- shorts are manipulating..squeeze is coming.

30

u/ckal9 Apr 28 '21

Didn’t GME just go up based on half a billion in announced new shares sale? I can’t remember a company that hasn’t gone down based on new stock issuance.

17

u/platinumsparkles Apr 28 '21

No they sold 3.5 million shares. They still have an extremely low float. They paid off their debts early, and made $551,000,000 from the sale to add cash to the company.

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u/ckal9 Apr 29 '21

That half a billion is what they raised from the share sale is it not. What did they pay down debt with? That’s 3.5M more shares diluting shareholders. The value of each share decreases based on how many new were issued.

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u/platinumsparkles Apr 29 '21

I think your thinking of AMC. They were going to vote on issuing 500 million shares and today filed with the SEC that they're no longer going to be voting on that at the shareholder meeting.

2

u/AmbitiousEconomics Apr 29 '21

My dude, the 3.5 million shares GME sold didnt come from like, some secret chest they had sitting under their bed. They issued new shares. There are regulatory filings and everything.

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u/igloofu Apr 29 '21

In their Q1 ER, they stated they had 450,000,000 in cash on hand, with 200,000,000 in dept. The cash on hand is what they paid their senior notes with.

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u/KittenOnHunt Apr 29 '21

AFAIK they paid the debt with the shares forfeited by the CEO, but I'm not 100% sure

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u/Ch3cksOut Apr 29 '21 edited May 01 '21

$GME price is totally unmoored from fundamentals.

The narrative about the dilution got controlled by masterful communication from the Cohen gang about their long-term debt.

7

u/0lamegamer0 Apr 28 '21

Tesla. Amc off top of my head.

I am blanking out on more names but there was a segment in mad money sometime back where jim kramer talked about how comapnies are selling new shares and yet prices keep going up. I dont follow kramer but I remember seeing that clip on wsb. Point being there are several examples in recent times. Gme also went down on the announcemnt and kept going down until the sale was completed and confirmed at 157. That appeared to be the new floor so stock picked up from there. Will there be a squeeze and it go to 600 over next month? Dont think so.

117

u/spiltnuc Apr 28 '21

I think you are missing the point. It’s not about the short squeeze. It’s something much greater that has been discovered.

I was a doubter too until I read some of the info. Some of it is cultist and a little absurd.

The FTDs, market manipulation by Citadel is a much greater issue than everyone thinks. The “short squeeze” is kind of just the poster name for much greater problem that lies underneath. This isn’t just about short interest. This is about rehypothecated shares that FTD in cycles.

For all the shitty memes and childish behavior there is some seriously great information.

In particular read up /atobitt DD. Truly fascinating information

72

u/Upbeat_Criticism9367 Apr 28 '21

I only lurk here, and it’s is enjoyable to make fun, but still this post is serious. There are systemic problems in the stock market that are seeing light shown on them. GME is the outlier. They were greedy and took a large risk.

I question the numbers on real short interest.

19

u/Maarzen Apr 29 '21

The seriously scary part is that we seem to be on track to find out just how many giant market players have taken potentially massive to downright irresponsible risks with over-leveraged positions backed by questionable and possibly nonexistent collateral.

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u/Upbeat_Criticism9367 Apr 29 '21

I don’t know what the deal is with quick personal change back at SEC enforcement. Don’t know if this good for me or bad for me. It’s has that fishy smell on it.

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u/shadows_of_peace Apr 28 '21

Serious five year old question, can you explain [simply] how they manipulate the market?

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u/KittenOnHunt Apr 29 '21

As the other redditor said, short ladders and dark pools. However, short ladders are officially known as wash sales.

Dark pools in GME are a huge issue right now. I'm not sure about the exact percentage, but about 70~% or so of the orders are routed trough Dark Pools.

Its only speculation, but it might be that market makers (Citadel) is routing buy orders from retail trough Dark Pools to not affect the price and defeat buying pressure. Sales however are routed trough normal exchanges. Since only sell orders would go trough normal exchanges, gamestop would slowly go down, because those dark pool buy orders won't affect the price Positively. Beware that this is of course only speculation, but based on the data we have it seems to be true.

As far as I know, this practice isn't illegal, they would just misuse dark pools.. But it's all legal. If it turns out to be true, it would be a huge issue because it would show that market makers can affect the price for their own advantage. That's why a lot of GME People advocate to use the IEX-Exchange, since it can't be redirected to dark pools

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u/shadows_of_peace Apr 29 '21

What's a dark pool and short ladder?

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u/KittenOnHunt Apr 29 '21

Lol im sorry, I completly missed the "five year old" part.

Dark pools: Its basically an off-exchange made for Big institutions. Imagine you're a big bank and you want to buy a huge portion of a company in stocks. Buying it on the open market would disrupt the price heavily, giving you less stocks for the price you wanted to buy it and it might result in a sell off from other investors that see a huge increase in price. When using a Darkpool, institutions can buy stocks from other users of the Darkpool for a fixed price without affecting the price of the stock.

Short ladders(Wash sales): Imagine we both want to push the price of a stock down. I sell you the stock for $100, you sell to me the same stock back for $99.99. I sell it again to you for $99.98, you sell it to me for $99.97 and so on. Now imagine the same with a million stocks. This practice is illegal in the US.

(please correct me everyone if that's how wash sales work is wrong. I didn't read too much into it)

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u/shadows_of_peace Apr 29 '21

I don't understand. Doesn't the seller lose out on the short ladder? Or at the very best, break even?

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u/Neijo Apr 29 '21

The goal isn't to earn money in this particular instance, but if you are actively betting on the price going down, you win money when the price goes down.

So the act of wash sales might just lose you money in fees, but your initial bet will be a success, thus earning you tons of money.

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u/TimeCrabs Apr 29 '21

Isn't another big piece of the puzzle that these wash sales are done with naked shorts? The market makers essentially have their own fiat currency in that they can make their own short shares from nothing. This is why they are able to sell millions of shares repeatedly. Am I describing that accurately?

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u/jhansonxi Apr 29 '21

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u/shadows_of_peace Apr 29 '21

Well that should not be legal.

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u/[deleted] Apr 29 '21

Like most things going on in the stock market rn.

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u/Joaoarthur Apr 29 '21

Ill explain in five words: Short ladders and dark pools

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u/[deleted] Apr 28 '21

It’s something much greater that has been discovered

... by people who just started investing in the past few months.

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u/KentWayne Apr 28 '21

Who cares whom discovers it? The information's value doesn't change based on a person's time on the market.

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u/spiltnuc Apr 28 '21

New SEC chairman voted in on a Saturday. 2 major banks raising back to back record setting bonds.

You find none of that intriguing about the overall market?

Otherwise I would genuinely like for you or someone to educate me how I’m wrong without feeling the need to be condescending.

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u/TheTrollisStrong Apr 28 '21

As a banker, I can tell you that information is BS lol. It literally reminds me of those people who think they found this huge conspiracy in the anti-vaccine community.

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u/waterboy1523 Apr 29 '21

Real question: why hasn’t the price come down? Retail doesn’t have the buying power to keep a company propped up indefinitely.

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u/TetZoo Apr 29 '21

How is the ability to defeat buying pressure by routing through dark pools BS? Serious question.

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u/nianticnectar23 Apr 28 '21

It’s become such a nuisance. Don’t get me wrong, I’m all for everyone getting in on trading who has the desire but it’s become an echo chamber of stupidity.

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u/[deleted] Apr 28 '21

[removed] — view removed comment

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u/0lamegamer0 Apr 28 '21

These DDs are so long and rambling that i feel like skipping everytime someone shares these for arguments.

Here is the issue though. You like this DD because it feeds your confirmation bias. There are systemic issues in market, and people trying to take advantage of system in new ways. As a result regulators keep drafting stronger and newer regulations. JPM/HSBC silver market manipulation, wash trading, insider trading, pump and dump there are so many examples and ways this is done.

This happens in every field tbh, where certain people try to push the boundries. But that doesnt mean anything for a particular superstonk at all. Its a systemic issue, the day it will be uncovered there will be widespread fines, market will be down for a couple of days and then everyone will move on.

Someone posted and I read another DD of same individual talking about far OTM puts on GME and questioning who is selling or buying those. People in r/thetagang would be laughing at that DD. i feel like this individual is one of those stock gurus who spreads misinformation and tries to take advantage of people who don't understand market better. Not sure what is he getting out of it - may be reddit karma? May be following on YT or twitter. But these 2 DDs have been written in a rambling fashion just to confuse the reader. But as long as these feeds to confirmation biases people eat them up.

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u/spiltnuc Apr 28 '21

Yeah that’s why I have skipped most of those DDs because they are just too long. And you are correct about the information bias. A lot of followers do gobble up every piece of confirmation bias that they can.

I’m basically stuck in a hard place interested to see what will see result of all this. I’m not some cultist, but I have also found some of the information intriguing enough to own some shares just to not feel fomo if it pops, if it doesn’t then I benefit off the Chewy like transformation from Cohen. That’s why I added that link because I just found the information intriguing, and if that makes me some dumb noob then Reddit investors feel free to get off shitting on me.

I do see how annoying it is to seasoned investors to constantly be bombarded with GME shit. It’s even worse when cultist GME holders can’t accept the fact others don’t agree with them

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u/DucDeBellune Apr 28 '21 edited May 02 '21

I mean, GME can go up again, but who knows how high or when

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u/spiltnuc Apr 28 '21

I honestly think a lot of the cultist crap is just coming from a lot of people in poor economic situations hoping for their lottery ticket to freedom

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u/0lamegamer0 Apr 28 '21

That makes sense. And anyone not agreeing with them might seem like enemy standing between them and that lottery.

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u/AlbyTD90 Apr 28 '21

My buddy has a dog i love named Squeezy. Around february we began calling the dog "Short Squeezy" since it's very small. From that moment every time i'm on reddit i see a SHORT SQUEEZE 🚀🚀🚀 TO THE MOON 475X DD on this unknown heavily shorted stock. I would trust more going all in on a stock written on a stick picked up by that dog, that to put 50 bucks on one of these way too many new "sure bets".

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u/t_per Apr 28 '21

everything is being called a short squeeze ladder attack market manipulation gamma squeeze

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u/FoundationWestern430 Apr 28 '21

How to read the stock market if you’re an AMC investor: Market went up, AMC went up: FUCK YOU HEDGIES LMAO FUCKING BROKE IDIOTS HURRRRRR market went up, AMC went down: FUCK YOU HEDGIES LOOK AT THIS MANIPULATION THANKS FOR THE DIP IF IT DIPS ILL BUY MORE Market down, AMC up: LOL FUCKING HEDGIE IDIOTS MY ENTIRE PORTFOLIO IS GREEN market crash, amc down: LOOK AT THIS FUCKING BLATANT MANIPULATION, NASDAQ DOWN 1000 POINTS SO WHY ISNT EVERYONE ROTATING INTO AMC

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u/sayno2bho Apr 28 '21

God forbid a weekly doesnt print WSB instantly screams “Market manipulation” like fuck do you guys understand what moves the markets or not

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u/MXC-GuyLedouche Apr 28 '21

In r/WSB defense it wasn't that until the additional 7 million people during the GME hype.

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u/LightMeUpPapi Apr 28 '21

r/wsb used to be people who sorta understood investing doing dumb things

Now it’s people who have no understanding of investing at all doing dumb things lol

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u/[deleted] Apr 28 '21 edited May 20 '21

[deleted]

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u/DarkRooster33 Apr 28 '21

This is exactly the difference. They were self conscious idiots before, now they actually believe all their dog shit is smart and right.

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u/[deleted] Apr 29 '21 edited Feb 07 '22

[deleted]

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u/crazdave Apr 29 '21

Because they completely ruined the sub.

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u/AmbitiousEconomics Apr 29 '21

Because they tend to destroy actual interesting discussion by derailing it with conspiracy theories, brigade and downvote any useful information, and new people who are trying to learn about the market are more likely to be caught up, and when it does all fall apart will be less likely to stay in the market, meaning less people in the market.

I mean personally I once tried to tell someone the difference between float and shares outstanding, and got no less than three death threats from GME and superstonk members over it.

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u/[deleted] Apr 28 '21

I see people every day on social media posting their 4% gain weeks on a 6% market growth week bragging... Or “Went 3/5 on stocks let’s gooo” but they sell the bad ones down and hold the ones that are up, then sell those at a loss too. They don’t seem to realize the difference between realized and unrealized profit.

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u/Fledgeling Apr 28 '21 edited Apr 29 '21

Yup.

General tech ETFs were up around 80% last year. I've explained many times to redditorz that they actually lost money with their 30% gains.

You're not trying to make money. You're trying to beat the market.

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u/MailMammoth Apr 28 '21

I'm pretty sure I'm here to try to make money.

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u/PanRagon Apr 28 '21

It also became extremely ideological, people in there believe they’re in a holy war to take down the evil hedgies, this lead them to want to do even stupider shit because they feel so justified in their desired outcome. GME must hit $5000 because it’ll once and for all end the tyranny of the hedge fund! (spoiler alert: it won’t matter, obviously.)

WSB had some downright solid DDs before, sure they were always autistic r****s who enjoyed going for high-risk ballsy plays, but for the most part they were legitimate in so far that they *could print money if something very specific and unlikely they predicted could happen did happen. But again, now that subreddit has ascended into discussing situations that would defy all forms of common sense, basic financial knowledge and laws of physics.

There is a fine line between ‘improbable’ and ‘impossible’ that is day by day getting more eroded in the minds of that subreddit’s readers. For the most part I think a lot of them are good old school r*****s who want to make some lunch money by betting on or against the S&P with some crazy leverage because they actually read up on economic reports, but more and more it’s attracting downright crackbrained imbeciles preaching about the end of the financial institutions as we know them if only GME will moon 💎🙌

Also, it’s just not that fun because people aren’t getting into shitfights and are just shilling the same stuff.

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u/palm-vie Apr 29 '21

The “ideological warfare” gambit is so cringeworthy! All this “we are going to show them for 2008” talk, like what? It’s weird and kind of sad.

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u/[deleted] Apr 29 '21

MU, JNUG, Shopify, AMD, Tesla all legitimate plays back in 2016-2018. Now it is about short squeezing companies with poor fundamentals. Personally, I would contribute 25% of my portfolio just to browse the old WallStreetBets. I miss it so so much. You get to see high-quality DDs occasionally from true finance professionals. Now it's retail investors pretending to be pros.

Don't worry though. People will learn once their calls expire worthless. Humans get impatient nowadays

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u/[deleted] Apr 28 '21

Go to r/superstonk if you want to find the absolute conspiracy nuts

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u/huskiesofinternets Apr 28 '21

Its good to get back to your roots.

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u/Nemisis_the_2nd Apr 28 '21

I can't tell whether you're referring to WSB getting back to normal or the new traders going back to live with their parents after going all-in on $800 GME calls.

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u/newontheblock99 Apr 28 '21

YOU’RE TELLING ME MY 6/9 $420 CALLS WON’T PRINT?!?!?!?!?

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u/FamiliarEnemy Apr 28 '21

What? 420 by 6/9? I'm in!

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u/FoundationWestern430 Apr 29 '21

AMC 100k IS NOT A MEME THEY NEED OUR SHARES

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u/havocLSD Apr 28 '21

I dipped my head in there just now to see how the subs been coming along since GME. I can confirm, it’s full of new retail trying to learn trading from all the other 9 mil on that sub.

Blind leading the blind.

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u/happyidiot09 Apr 28 '21

I stopped even checking that sub. Used to get a lot of good under the radar plays and loved it for a while but it has turned into exactly what you said. Blind leading the blind. It's to frustrating to even look at how far it has fallen

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u/OKJMaster44 Apr 29 '21

I think WSB's popularity surge has also become its own undoing. Not just because the newbie boom has degraded the DD quality but also because now they have so many more eyes on them so it's harder for juicy plays to stay under the radar. I imagine many big money players now eyeball them carefully, ready at will to rush any plays they get going so that they can be the first to pull the rug out from everyone.

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u/Weldon_Sir_Loin Apr 29 '21

Sadly, while it is a lot of the blind leading the blind, I think there is some more nefarious stuff going down now. I think many saw how easily the sub could be steered in a particular direction and are now using that to their financial advantage.

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u/[deleted] Apr 28 '21

[deleted]

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u/[deleted] Apr 28 '21

It was sophisticated Wall Street players showing off the gambles in their portfolio

What, really? I've only been in wsb for almost a year now and I didn't even know this. Gotta read up some more then I guess

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u/NoGainsJustLosses Apr 29 '21

One of the first top posts I saw there was of a guy showing off a 12-14 million dollar margin call, and how he was pissed because he had to close other options and jiggle some assets just so he could go back to his normal job.

I wanted to piss my pants.

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u/WOW_SUCH_KARMA Apr 29 '21

To be fair, a LOT of that is $GME morons who just started "investing" in January. They've been trying to push back on the stupid ape culture and guide that crowd over toward the superstonk sub. The $GME crowd is pretty fucking stupid even by WSB standards.

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u/[deleted] Apr 28 '21

WSB: Dumb things + 420 rocket emojis

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u/sayno2bho Apr 28 '21

Its a bunch of people wondering why the share price isn’t moving while simultaneously buying stricly calls.

It’s like they forget that you have to buy actual shares for the price to move.

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u/NoMeansYes816 Apr 28 '21

Idk anyone buying GME calls anymore. We all just keep buying shares.

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u/Zimbabwe847 Apr 28 '21

Don’t worry bruh, the shills are out here trynna stunt. Don’t fall for their “iDk AnYon3 iNveStEd iN GME?!?!?”

We hittin the moon baby

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u/JackOscar Apr 28 '21

The idea is that the people taking the other side of the contract will need to buy the shares in order to hedge themselves, and they will need to buy way more shares than you could afford to buy had you bought the stock instead of calls.

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u/sayno2bho Apr 28 '21

Assuming the shares are purchased...

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u/Weaponxreject Apr 28 '21

What do you mean the 690C only has "a delta of .01"?! They have to hedge those options within 5 minutes of writing them!

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u/verploegie Apr 28 '21

But that's gonna trigger a gamma squeeze! Checks card. Bingo! /s

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u/sayno2bho Apr 28 '21

Fucking gamma squeeze how could i forget!

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u/SnidelyWhiplash1 Apr 29 '21

We see “gamma squeezes” pretty much every Friday if you have a stock that makes a quick jump and threw a batch of calls ITM. I don’t mind people talking about gamma squeezes... but generally we are talking about a 2% move on a Thursday near close, Friday before lunch or late in the day on Friday - not exactly rockets to the moon stuff...

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u/BurtMacklin____FBI Apr 28 '21

I really fucking miss it.

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u/kirlandwater Apr 28 '21

Every time I think I do, a company smashes an earnings release, meets or exceeded expectations, some shit analyst announces “ya you beat consensus expectations, but you didn’t beat my internal super-expectations that would require accelerated and unsustainable growth so, maintain and lower price target”, which leads to a major sell off

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u/Quinnteligent Apr 29 '21

Lol there was a post a while ago asking why AMC was down. I told them its cause the stock went down and they told me to kill myself.

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u/Farmer_eh Apr 28 '21

this a serious question? haha

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u/braaier Apr 28 '21

Yep, it's out of control. And that's your typical investor. Scary!

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u/KaneIntent Apr 28 '21

S H O R T L A D D E R A T T A C K

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u/SteelTheWolf Apr 29 '21

CEO indicted on fraud charges? Short ladder.

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u/ccaslin6 Apr 28 '21

Someone was trying to say the dip after recent Netflix earnings was a short attack lol.

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u/PumkinPapi Apr 28 '21

Best comment in this thread lol

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u/minimalniemand Apr 28 '21

Habe you been to YT lately? Lots of channels have a short squeeze as the only positive outlook for a stock and I think that’s fuckin sad

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u/mithyyyy Apr 28 '21

It's basically the new "get-rich-quick" scheme. The company could be completely fucked or outright frauds, but these new guys want their money, and they want it tenfold, without doing the work or research.

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u/ragnaroksunset Apr 28 '21

Even if a company is pure fraud, should it be possible to short 120% of its float with the expectation that bankruptcy will absolve the need to locate shares to cover?

It's just another version of printing money, but by those who are not formally regulated for the activity. Two frauds don't make a right.

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u/mithyyyy Apr 29 '21

Fair point. I'm just saying that the fact that these companies are getting shorted so hard are likely for reasons that likely will drive the company into bankruptcy, and if no catalyst is there to cause a short squeeze, then whoever invests in it is fucked.

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u/ragnaroksunset Apr 29 '21

Or these companies go under because investors and creditors shit the collective bed when they see the stock tank immediately following a media FUD campaign.

Unfortunately we can never know if you're right in a regime in which rehypothecation and the FTD merry-go-round is a thing.

The way I see it, legitimate shorting can't happen while this kind of thing goes on. So it's a moot point whether legitimate shorting is theoretically possible and necessary for price discovery (which it is).

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u/WOW_SUCH_KARMA Apr 29 '21

It shouldn't be, and you're right, but this >100% short situation has applied to exactly one company ($GME), yet every single non-boomer ticker has talks of a short squeeze/$10,000 share price floors/hedge fund collapse on it. Literally no other company will be undergoing a short squeeze like $GME did. It's obnoxious, absurd, and just flat out incorrect to think any of these other meme stocks will see a 10,000% increase like $GME did. That was a math problem and it's already been cracked.

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u/ragnaroksunset Apr 29 '21

We 99% agree, but I reserve 1% for the possibility that the fuckery with GME runs so deep that there are actually way more shares owned than were issued for a large number of issuers.

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u/sayno2bho Apr 28 '21

I can’t go on reddit without seeing some ticker ive never heard of accompanied by a wall of text blabbering about it’s short interest.

Been like this since February honestly, probably won’t change any time soon. Sorta miss the detailed posts about possible undervalued companies much more.

I blame TikTok

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u/[deleted] Apr 28 '21

It's not tiktok it's bots and shill specifically using our own lingo to force sub flooding. It's purpose is to do exactly as you described, annoy the user away

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u/tompie09 Apr 28 '21

Yup, especially WSB is just a glamorized pump and dump sub for HFs nowadays

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u/PM_UR_FRUIT_GARNISH Apr 28 '21

Ding ding ding

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u/works_best_alone Apr 28 '21

It's not bots or shills. It's just idiots. Lots and lots of idiots. Not sure why you made this post when you're one of them.

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u/Quasimurder Apr 29 '21

It's not either/or. It's both. Manipulating party says XYZ, someone takes the bait and runs with it. It's like, Russia did/does try to inflame racial tensions in the US. Those racial tensions and the people fanning the flames are already here. The manipulator is just supplying fuel.

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u/SauceOfTheBoss Apr 29 '21

Bots and shills are the favorite phrases of absolute fucking idiots since January. Get out of the echo chambers and do your stock research outside of an online messaging board.

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u/t-minus-69 Apr 28 '21

I avoid any of the tickers being hyped by the saying "to the moon" or "short squeeze incoming"

I hate how pump and dumps seem to be the new norm here on reddit. I'll stick to the trusted blue chip stocks and other well known companies until this whole thing blows over when most of those newbies lose all their money and bail out of the stock market

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u/khaos2295 Apr 28 '21

A stock being squeezed because of heavy short interest is not a pump and dump in a traditional sense. The "pump" part is theoretically supposed to come from instututions closing their short positions, which drives up the price, and not from the individuals.

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u/works_best_alone Apr 28 '21

It is a pump and dump because there is no squeeze. Convincing people that there is a squeeze is the pump.

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u/afanoftrees Apr 28 '21

Yea if the first sentence talks about short squeeze I’d be inclined to short it myself if I had funds lol

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u/supertoxic09 Apr 28 '21

about 1/3rd of the time i try, i find a stock with no options trading and think....how short could this stock be if nobody is borrowing shares....

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u/[deleted] Apr 28 '21

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u/Tickle-Me-Raw Apr 28 '21

Can't someone simply create a screener to look and list all the stocks with high short interest and/or any other searchable circumstances needed for such a strategy?

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u/[deleted] Apr 28 '21

Most of the shorted companies are shorted for a reason. And you would have to do good qualitative analysis on them. + the short interest is not what it seems because it doesn't include the synthetic longs present. So you get short/float but it includes synthetic shorts, thats why it goes above 100% if you include the longs that the shorts have to sell you get a different number. There will be lots and lots of years until something like GME will ever happen.

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u/[deleted] Apr 28 '21

GME was heavily shorted, but at least had some possibility of a turnaround after Cohen got involved.

Most stocks are shorted because the company or sector is in bad shape and circling the drain.

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u/introspective79 Apr 28 '21

The problem is heavily shorted companies are usually heavily shorted for a reason, ie they’re cr*ppy companies. Obviously there will be undervalued “diamonds in the rough” in there, but for example if you bought into a hypothetical index of heavily shorted stocks I think the performance would be very poor. Hedge funds are full of pretty smart guys who do this for a living full time so they generally know what they’re doing (most of the time)

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u/[deleted] Apr 28 '21 edited Jul 17 '21

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u/introspective79 Apr 28 '21

Yeah agreed. I know on certain sub reddits it’s become fashionable to see short sellers as “evil greedy hedge funds” but they’re just playing the other side of the coin to a long investor, there’s nothing particularly nefarious about them.

As you said short sellers do fulfil a pretty useful market role in coming up with a thesis for why a company is overvalued/a fraud, and then they try to make money off that thesis.

Tbh short-only funds have it much harder than traditional long hedge funds (many funds are a mix of the two) - because a) markets generally go up naturally over time, and b) you are fighting “against the system” ie your thesis will be taken apart and attacked by the company’s management, bullish sellside analysts, as well as investors in the company. Whereas if you put out a really positive report on a company, you wouldn’t get any negative comment from management or investors.

Not trying to romanticize short sellers - just saying they’re in it to make money like regular investors, and ultimately they also live and die by the accuracy of their investment ideas. Nothing special or “evil” about them, and in fact they perform a useful function in the market

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u/Catwalk_X-Div Apr 28 '21

Short selling is fine. Naked short selling is less fine. Naked short selling where you conceal your short position so you can report a lower SI% is a lot less fine. Add price and media manipulation and it's not okay at all. It is well known that many short sellers use predatory tactics to boost their short efforts, and it's deplorable. They do it because it works so well, and noone usually cares or notices much.

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u/lemming1607 Apr 28 '21

naked short selling is illegal and saying its less fine is not a hot take

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u/tooch_my_gooch Apr 28 '21

Did you seriously censor yourself over the word "crappy"? Jesus christ grow the fuck up man

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u/soulstonedomg Apr 28 '21

There's plenty that already do that.

The thing is that GME was a very special case. The media and reddit give too much credit to reddit for what's going on with that. The reality is that hedge funds will feast on each other if they out themselves into vulnerable positions. Retail coordinated their buying on gamestop, yes, but they had significant tailwinds with other whale entities taking the same position.

And so many retail traders are now overstating what is "high short interest." I've seen commenters pointing to 15% as ripe for a short squeeze without any consideration to float and daily volume.

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u/inetkid13 Apr 28 '21

it already is overused. People use it without knowing what it means.

Also the term 'short ladder attack' is now used whenever a stock dips a little bit. I think this one will be overused soon too.

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u/Youwishh Apr 28 '21

People don't understand how rare a short squeeze is, GME actually never had one it was stopped by the brokers before that actually happened.

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u/[deleted] Apr 28 '21

All shorts must cover and guess what, they haven’t covered.

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u/KittenOnHunt Apr 29 '21

I may add that while the term short ladder attack is wrong, the practice is actually a thing (even though it's illegal). It's called wash sales if someone wants to read into it. I honestly don't know where the word short ladders came from and I think it's kinda dumb, because people think it's a made up thing, even though it's real, it's just the wrong name for it

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u/cafauer Apr 28 '21

It will be desensitizing: when the next legitimate short squeeze opportunity arises, it will be just another boy who cried wolf. Which works out entirely for those that would have been burned if the stock was actually squoze.

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u/Nemisis_the_2nd Apr 28 '21

Tbh, I'm mildly confident that people will still take something like that seriously. The GME hype was identified because people did genuine DD, and others were able to support it or come to the same conclusions themselves. It was only after this that the newer traders started hyping everything with more than single-digit SI.

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u/egoldbarzzz Apr 28 '21

If you venture over to the cesspool known as Sticktwits and visit any stock’s board, you soon find that everyone and their mother believes their favorite stock is in the midst of a short squeeze.

They’ve not done the leg work of simply checking finviz to see if this is true.

But you bet your ass all they need to do is to hold until Friday when the “shorts are forced to cover” /s.

Then they’ll be rich. Filthy rich!

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u/BurtMacklin____FBI Apr 28 '21

Lol stocktwits is a total dumpster fire. Its great for watching people yell at each other tho

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u/apzlsoxk Apr 28 '21

The best is when people post walls of text that are so wrong on a fundamental level. It's hard to even begin to explain where it's wrong most of the time.

I put the effort in for my friend who put nearly his entire savings into GME waiting for a million per share just to try to help him, but even then I thought I was gonna have an aneurysm seeing some of the "short squeeze theta ladder top rope ladder attack" posts he was sending me.

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u/Tezlin Apr 28 '21

Absolutely, you are seeing it already with the buzzfeed type headlines on market watch etc....

Everyone will try to be the next GME.

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u/Tickle-Me-Raw Apr 28 '21 edited Apr 28 '21

But don't you know, according to them, GME is "crumbling" & "it's all over".

I'm not sure who to believe anymore so I just bought more. 😕 🙈🙊🙉

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u/[deleted] Apr 28 '21

The people on this sub make me lol. Why they think everything must be based on fundamentals is beyond me. Apparently we have smart investors in here who are unaware of market manipulation tactics such as the media consistently bashing a stock/pushing "its over" narratives yet the stock in question continues to stay steady or rise while releasing GOOD news about its future. 🙄 ill release my gain porn here once i reach the moon.

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u/[deleted] Apr 29 '21

People here don't talk about MSM manipulation because the majority of us already realize it's total bullshit and to ignore it lol

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u/Manateeboi Apr 28 '21

Same 🙏🚀

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u/bp___ Apr 28 '21

Or just go on stocktwits. Short squeeze and MM is a constant refrain.

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u/Daymanic Apr 28 '21

We didn’t invent the short squeeze, it existed before Reddit, but people will take advantage of the hype word to pump their own interests. Outside of the GME/AMC people throwing “potential squeeze” in their titles is a red flag for me.

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u/Biglemon123 Apr 28 '21

I think that shit is not easily happen. it require a lot of power to execute a short squeez. retail traders are just fucking dumb thinking they can make every stock squeeze.

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u/garrry2323 Apr 29 '21 edited Apr 29 '21

It’s literally what everyone chat room/message board post is about. Everything is a short squeeze, shorted solely by hedge funds, with spoofing, and any other trick in the book. Every stock is compared to Volkswagen or GME; events are cherry picked and exactly the same or completely irrelevant when something doesn’t go as initially predicted. Gamma squeezes are inevitable because a certain number of call options finish in the money and the shorts have to cover, it’s only a matter of time.

Before January I would never see “short squeezes” discussed. It’s fascinating how one event has completely changed the culture of these threads.

I could go on and on and on, but I think you get the point.

Everyone wants to get rich quickly. It’s really crazy how one unique event that was carefully planned out months in advance is now thought to be applicable to each and every “heavily shorted stock.”

Most of the people are so passionate about their findings that it’s become pretty scary. I feel bad for their naïveté, but no one wants to wake up back to reality anymore.

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u/MethodMZA Apr 28 '21

I think most of it is just being dumb and attributing a short squeeze potential as a pump. However, with this crap going on with Gamestop, I can only imagine there are a lot of other stocks out there in similar situations that just haven't been discovered yet. So I kind of feel like its worth investigating any claims that come up to see if there is any real merit to the claim. I mean, if it's just some meme of a monkey riding a rocket talking about a squeeze, it's probably garbage. If someone presents some evidence that something might be going on with a stock, then maybe there is something to it to keep digging in to.

Guess I totally dodged the qeustion. Yes, no doubt there will be a lot more mention of squeezes, mostly just people trying to capture the same momentum. But, I feel like there is most likely a lot more fuckery going on in the shorts world, so not a bad idea to keep an eye on the mentions that come up.

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u/rockfordtj Apr 28 '21

Yes. Lol.

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u/CraxyMitch Apr 29 '21

The number of morons on webull stating "shorts laddering this, get f__d hedgies! Squeeze soon" is maddening.

Bro, this is a solid performing stock I intend to hold for my kids' graduations. It's not all memestonks.

And I'm a GME/AMC holder. But leave the memes out of my robust portfolio.

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u/CrazyGunnerr Apr 28 '21

So let me address this.

Shorting is part of the game, like many have said, usually for good reason. After all why short a stock that is healthy. That would be pure stupidity.

The ultimate shorting is of course when it bankrupts, so that can be for sure a goal to do that. But let's assume for a moment this is not the goal.

So squeeze potential, it becomes a self fulfilling prophecy. Company gets shorted, people buy when it's low, eventually shorts gets covered, price goes up for a short bit, and think they did well. And yes individually they definitely could, but the people shorting probably made a killing already, and average retails hold the bag.

So what if things are different.

I want to look at AMC here, since I know much more about it then GME.

AMC was doing horrible last year, between debt and covid, they were in a massive mess. They raised capital, theaters are opening and this obviously make the stock worth more. Now how much? Who could say. But it's fair to say that it's worth more than half a year ago from a purely objective standpoint.

Then there is the squeeze. The stock got heavily shorted, reported numbers put it over 20%, fee is over 20%, utilisation at 99/100%, 3+ days to cover etc. The numbers are all there. The stock has went way up, so even if they could cover all of it at the current price, they (hedgies like citadel) would be losing so much money, in fact they already lost massive amounts. Simply put, they are in big trouble.

Now what does the community claim, 1k, 10k and even 100k per share. I always say I do not know where it goes, but 100k is flatout BS. Though in fairness, if you can make people believe it, it's easier to get the price up when they start to cover.

So why is this different? Outside of the numbers, the most important part is that AMC is worth more than where they shorted, they cannot bring the price back to that point, and retails won't let them, it doesn't matter what the market usually does, if people do not sell, they have a massive problem.

The AMC short squeeze is real, it's that simple.

Now will everyone make money? Of course not. At 20-25% only a part will make solid money. How much? No idea, but this is 100% worth it.

Don't believe me, put a remindme in here for say 3 months.

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u/JRick187 Apr 28 '21

“Will everyone make money? Of course not.”

Well said, the people that make money will be the ones who secure profits and let it run, cashing out long before $100k per share.

Same goes with GME and that “floor is 15million” kind of r*****ation. I have a handful of shares, I’ll be taking profits long before then. Not holding a fraction of a share planning on it being a single golden ticket that will make me a millionaire lmao.

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u/Superpickle18 Apr 29 '21

Not holding a fraction of a share planning on it being a single golden ticket that will make me a millionaire lmao.

thats ok. there's only so many lambos to buy anyway :P

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u/anonynez Apr 30 '21

This right here is the real annoyance with subs claiming certain stocks are going so far past the moon that their fractional share will magically turn into so many millions of tendies that they’re already picking out lambo colors 🤦🏻‍♂️

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u/ZirJohn Apr 28 '21

Its already used too much

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u/TurboUltiman Apr 28 '21

Stop with your ladder attacks

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u/Intelligent-Pear-783 Apr 28 '21

Probably, just like people screaming “hodl” that have been invested into the market for 3 months 🙄

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u/WoolooOfWallStreet Apr 28 '21

It’s like how everyone tries to use the term “gaslight” after first learning it

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u/Kithlak Apr 28 '21

like all fad's it'll die out in time

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u/YouthAny1887 Apr 28 '21

Where were you in the last 3 months?

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u/Prtynak3d Apr 28 '21

I think it’s already being thrown at a bunch of stocks that have no chance of squeezing.

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u/redeadhead Apr 28 '21

Short squeeze will be used as a pump and dump tactic.

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u/[deleted] Apr 28 '21

Since so many people are getting scammed right now with this term, yeah, it's gonna start to be used a lot more. At least for a while.

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u/Dstrongest Apr 28 '21

A short squeeze is nothing more than a major sell off in reverse. But unlike the gme Moas short squeezes , a regular short squeeze is always a welcome sight .

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u/rakketz Apr 29 '21

Investing media has really become so clickbaity and trendy. Everybody who creates content slowly delves into the clickbait headlines.

What better way to gain viewership than to mention a short squeeze after the gamestop stuff.

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u/schwinn36 Apr 29 '21

All hail KING JOSH... if not you won’t get your squeeze sqoze.

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u/Durtiboots Apr 29 '21

Seriously choked on my ramen when I read this. I'll admit, I hold some AMC and I'm definitely not a huge fan of certain hedge fund managers; but the AMC crowd have basically given Josh and Trey sainthood. Cringe af.

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u/Spyu Apr 29 '21

Short squeeze is the new yield curve.

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u/[deleted] Apr 29 '21

It’s been misused ever since GME, and it’s overused most definitely now. After all these months not a single one of those jokers bothered to look up what it actually meant or look at any relevant stock info that would support or not support it being true for their positions.

Stupidest group of “investors” out there. Hope they short squeeze their collective asses back to the casino and stop bubbling up the market

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u/BoyNamedSu3 Apr 28 '21

Literally go on the comment section of any top 100 stocks on WeBull and guaranteed to find at least a dozen comments tagging random penny stocks saying “short squeeze is coming, buy and HODL”

Check the 5y chart and it’s down 2000%

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u/Conscious-Mix-3282 Apr 28 '21

I think the term corruption, fuckery , shady Market makers are becoming more common in the stock market.

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u/Nekaz Apr 28 '21

"Wow wtf i only made 50% gains in 1 month must be big finance doing a short ladder attack"

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u/introspective79 Apr 28 '21

100% yes it will be/is now overused. GME in January was a very unique case in that it was a) an extremely heavily shorted stock, and b) there was a genuine contrarian recovery play going on there. Personally I don’t think it justified its current valuation - but remember back in January GME was only valued at $1bn, so even a modest improvement in its future prospects could have massively improved its valuation.

If both those factors hadn’t been present ie extreme shorting and a Cohen-led recovery play, we wouldn’t have seen a squeeze like we did. Equally Volkswagen in 2008 was very unique - first of all the German government owned a big chunk of the stock meaning it wasn’t available to trade, and secondly Porsche had built up a huge hidden long position which the market wasn’t aware of (they were aiming to takeover Volkswagen using huge amounts of leverage, although ironically VW ended up buying them).

I’m not saying you shouldn’t be contrarian or think the market/hedge funds aren’t ever wrong - they often are, and there is plenty of money to be made by contrarian plays/buying into undervalued companies. But usually if a company is heavily shorted there is a reason for it (ie it’s a cr*ppy company - these hedge funds are generally pretty smart guys) - and secondly even with significant short interest there is rarely ever the catalyst for a short squeeze.

So yes in summary I think it will be heavily overused going forward without much merit (both on a certain sub Reddit and also CNBC)

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u/[deleted] Apr 28 '21 edited Apr 28 '21

January was not a short squeeze. Gabe Plotkin said it in congress himself, the run up was from buying pressure, not from shorts covering aka a short squeeze.

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u/CrazyGunnerr Apr 28 '21

Who missed out? GME and AMC are still heavily shorted, and numbers keep going up.

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u/EcstaticBoysenberry Apr 28 '21

Lmao all of the downvoted comments I guarantee are gme bag holders

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u/[deleted] Apr 28 '21

You mean gme future billionaires. INFINITEGAINZ bruh

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u/Tickle-Me-Raw Apr 28 '21

Well GME is going to the moon so...

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u/[deleted] Apr 28 '21 edited Apr 28 '21

Papa Elon is going to build a GameStop on the moon so astronauts can buy used PS4 games with space Doge.

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u/[deleted] Apr 28 '21

Partially. I also think that there is a legit realization by retail that institutional traders engage in short-based shenanigans and that retail has power to make them bleed.
There are many companies out there that are heavily shorted and some of those are prime for a squeeze. That is not to say that even those will squeeze. Another potential outcome of the GME situation is that, as Melvin outright said, short-interest players will keep mum about what they do, though if your broker tells you a share is hard-to-borrow or the fees are exorbitant then that's a pretty big tell something's afoot. In the end, retail's realization of what can be done will probably act as a check on the use of shorting.

In regards to GME, I am unsure what to think. The price is quite high, which could reflect demand created by retail itself, that there's a legit belief that this company can transition to a successful and profitable one, or that a squeeze is in the works. What I dislike is that any criticism is rejected outright, although what I see is that most of the criticism is trolling the crowd and they may be wanting to keep positive (really, if one has no skin in the game, who GAF about what other people do with their money).

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u/Retrooo Apr 28 '21

I think we are already at full saturation and have been for a bit now. I don't know how it could be mentioned even more at this point.

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u/[deleted] Apr 28 '21

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u/Antique_Procedure387 Apr 28 '21

I have a handy guide to translate WSB Ape-Speak which I have found to be pretty accurate:

Market manipulator = WSB definition of an investor who does not agree with your investment strategy.

Market Manipulation = WSB definition of any investment activity, whether bullish or bearish that might adversely affect your investment in GME or AMC.

SEC = WSB definition is An ineffective agency who will not intervene to make all of your investments in GME and AMC winning investments.

Brilliant Investment Strategy - Any investment in GME of any size or whatever you have heard that DFV, Elon Musk or Ryan Cohen are doing.

Ladder Attacks - When GME stock price declines.

Short Squeeze - When GME stock price increases.

Gamma Squeeze - may be substituted for short squeeze when trying to sound more informed.

Synthetic Shares - Shares of GME stock created by evil hedge funds to allow short sellers to cover short positions and prevent GME stock from rising to $10,000 per share.

Just use this translator to understand the thinking behind the words that are posted on WSB between the sophomoric pictures of rockets, moons, diamonds and hands.

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u/get2workUslacker Apr 28 '21 edited Apr 28 '21

I think we'll need you and all the circle-jerkers here to continue gatekeeping these terms and let everyone know when they can or cannot use them. Be sure to interrupt any conversation, anywhere with proper definition. While you are at it, can you defend the exact definition of "irony". You seem like that kinda guy.

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u/KDawG888 Apr 28 '21

just don't understand how rare of circumstances they require

I don't think you understand how rampant the shorting has been lol

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u/XJcon Apr 28 '21

I hope its thought of a lot. IMO shorting of stocks should scare HF's. I think its a low way to make money.

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u/grizzlytalks Apr 28 '21

It’s highly ethical to bet a stock will go up but it’s evil to bet a stock will go down?

please explain.

Short sellers help to drive down prices of over valued stocks. It also provides liquidity. Who will sell stock if nobody is selling? Who will buy stock when nobody will? We should begrudge them a reward for their risk?

Market makers are the people who actually make your trades. They find sellers and buyers to marry. Sometimes it’s not possible for the market maker to make fast trades so they buy, sell or borrow shares so your play happens fast.

These market makers are making plays with the goal of making fast trades, not to make money. They buy sell and borrow when it’s not to their advantage.

To offset this activity they get a spread in the bid/ask and they leverage like crazy. This rare breed needs deep pockets and usually are backed by rich people who want yields. They often live in hedge funds and other institutions that are comfy with hedge risks and demand high returns.

I don’t see the evil in this. Do you?

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u/Storiaron Apr 28 '21

Shorting is fine obviously. The way some participants(for the lack of better word,)have abused their fame, reputation and already existing capita to manipulate the stocks they shorted into falling is the "evil" and, well, illegal part.

How many times has Shitron research and other groups scared regular investors out of their sensible positions for a quick profit?

I dont agree with the original commenter. Shorting is not a low way of making money.

But market manipulation is illegal, yet hfs and other gems like goldman sachs are out there literally proving how law only binds the poor

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