Right now my feed has become this weird feedback loop of people talking about Gamestop’s stock, which has gone very high because of a push from Reddit’s WallStreetBets group which decided to, somehow, pump it, intentionally targeting the shorts (which I think means the guys betting against a stock) of a big hedge fund group for some reason. Some have made ridiculous amounts of money, and now people want to also make ridiculous amounts of money, despite the fact that the time you can make ridiculous amounts of money from this particular thing have long gone.
From what I can understand they basically all got options trades that said the stock would go crazy high, then they all bought it (?) and it went up, which is traditionally a strategy used by the hedge funds to give themselves money. A few millionaires got made from it, and there’s a good chance, apparently, that the stock goes even higher than where it is right now, which is $321, after it being like $80 on Monday. Naturally, my regular working brain is mad at myself for not assuming it’d go up, and seeing the future, which is cool.
It kinda reminds me of a stock-related version of something I wrote for VICE about how most of these situations aren’t usually reallocations to people who were poor before. This time might be different in the sense that there are some very real people on Reddit posting how they’ve turned hundreds into hundreds of thousands, which rocks, and I’m happy for them, but now I see that the retail investors are getting horny for that stock pump, and I worry lots of people will lose their shirts. An option, from what I understand, is a costly gamble that a price will change, with a multiplier of payback based on how many shares are in each contract (100?) - I don’t really understand it, and I don’t mess with it, it’s too hard.
Already the shackles have clipped onto people using Robinhood - at least on my account you can no longer buy options for Gamestop’s stock to go higher than where it already is, but the best part is watching people pearl-clutch over ‘stock manipulation’ because the wrong people got rich off the stock market. What’s also interesting is that we’re seeing one of the more garish examples of the stock market’s abject disconnection from real life - the actual value of these companies is irrelevant to the larger push by a forum of two to three million people who refer to themselves with an ableist slur I’m not going to type here.
I’ve always found any investment terrifying. I never did it, beyond a little bit here and there, and any time I’ve dipped my toes into it I’ve never had the mettle to survive big drops in prices, apart from one crypto investment that was a few years of abject pain, and ended up going much higher when I sold out. And I think the ease of investment into Robinhood and the like is both a great thing and a terrible thing - it’s generally entering a casino where the dice are rigged against you and you can only really survive by holding out and hoping you don’t get totally ruined.
The whole Gamestop thing is interesting because the pearl-clutching seems to be entirely based on people who are offended that someone else found their rigged dice supplier and started using rigged dice. There is no good reason why any of these stocks before Gamestop went crazy like they did, and the entire situation here where people are saying that it’s ‘unfair’ and ‘criminal’ is just a reaction to the idea that their way of enriching themselves - which they’ve done throughout the pandemic - shouldn’t be open to others.
It’s funny, because the original idea of day trading was that ‘anyone could get involved,’ with the quiet part being that they would also get screwed over because the stock market is generally controlled and organized by those who can make decisions with computers in miliseconds, or at the very least had the legal kind of prior knowledge. Seeing people on Reddit fuck with the markets at scale annoys them because it interferes with their profits and their ability to sell their services.
Which rocks. But it’s also similar to the whole crypto thing in that those who got in really early are the ones who are going to make tons of money, and those who get in now are likely to be the ones that lose it. The moment something becomes obvious enough that you should do it, it’s already passed the point of profitability.
Or maybe it hasn’t! Maybe it goes to $1000, and anyone who bought today makes hundreds of dollars a share. That would also assume of course that you have the money to invest in a $344 stock. Or whatever it is when you read this.
Anyway, happy hunting.