Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.
Please note this sub-forum does not provide professional finance advice. You should seek advice from a licensed financial advisor. If investing please consider our affiliate links for new accounts: Sharesies or Hatch. To post in this sub-forum you must have made 100 posts or have Trust status or have completed our ID Verification



1101

3043 posts

Uber Geek


#281211 5-Feb-2021 12:54
Send private message

Can anyone explain , in simple terms the resent US gamestop stock trading incident .

 

I dont understand why it matters who buys shares and for how much, and why share speculators(?) are worried
what is “short sell” 

 

how does this 'punish hedge funds' ?
Cheers


Create new topic
Affiliate link
 
 
 

Affiliate link: Norton 360 antivirus provides enhanced security for your connected devices, a secure VPN for online privacy, Password Manager, Firewall, SafeCam, PC Cloud Backup, Dark Web Monitoring, Parental Control, and more. An all-in-one cybersecurity solution backed by 100% Virus Protection Promise and 60 Day Money Back Guarantee.

gzt

gzt
13598 posts

Uber Geek

Lifetime subscriber

  #2648126 5-Feb-2021 13:03
Send private message

I expect hedge funds are laughing all the way to the bank after this activity.

In practice short selling means making a bet that the price of a share will drop.

jonathan18
6071 posts

Uber Geek

Trusted
Subscriber

  #2648129 5-Feb-2021 13:05
Send private message

@1101 - assume you've not come across this thread on the same topic?

 

https://www.geekzone.co.nz/forums.asp?forumid=191&topicid=281106

 

 


NotATurkey
18 posts

Geek
Inactive user


  #2648154 5-Feb-2021 13:29
Send private message

Yeah, best to stick to the existing Geekzone thread.

There will also be tons of explanations online that are better than mine, but I'll have a go at explaining it assuming no market knowledge....

---------------------------------

Firstly, "Shorting" is when you borrow shares from somebody to sell to someone else.
Afterwards,
If the price goes down you can buy the shares back cheaply to pay back your loan and pocket the difference.
If the price goes up you make a loss as you have to buy them back at a higher price.

A single share can be "shorted" (aka borrowed then sold) multiple times. For example, if a person that was sold a previously "shorted" share shorts it themselves.

With GME 140% of the shares had been shorted.
Other people saw this and brought and held shares themselves. This pushed the price up making the hedge-funds lose money. The hedge-funds still had to buy shares to pay back their loans and since there was more demand than supply the price got pushed up even more.

After a while the brokers (people you order shares from) got told they had to have more money ready to cover shares being brought. They couldn't do this, so they stopped people from buying more.
This was one of the things that helped bring the price crashing back down again.




michaelmurfy
/dev/ttys0
10979 posts

Uber Geek

Moderator
ID Verified
Trusted
Lifetime subscriber

  #2648155 5-Feb-2021 13:32
Send private message




Michael Murphy | https://murfy.nz | https://keybase.io/michaelmurfy - Referral Links: Sharesies | Electric Kiwi
Are you happy with what you get from Geekzone? Please consider supporting us by making a donation.


Create new topic





News and reviews »

D-Link G415 4G Smart Router Review
Posted 27-Jun-2022 17:24


New Zealand Video Game Sales Reaches $540 Million
Posted 26-Jun-2022 14:49


Github Copilot Generally Available to All Developers
Posted 26-Jun-2022 14:37


Logitech G Introduces the New Astro A10 Headset
Posted 26-Jun-2022 14:20


Fitbit introduces Sleep Profiles
Posted 26-Jun-2022 14:11


Synology Introduces FlashStation FS3410
Posted 26-Jun-2022 14:04


Intel Arc A380 Graphics First Available in China
Posted 15-Jun-2022 17:08


JBL Introduces PartyBox Encore Essential Speaker
Posted 15-Jun-2022 17:05


New TVNZ+ streaming brand launches
Posted 13-Jun-2022 08:35


Chromecast With Google TV Review
Posted 10-Jun-2022 17:10


Xbox Gaming on Your Samsung Smart TV No Console Required
Posted 10-Jun-2022 00:01


Xbox Cloud Gaming Now Available in New Zealand
Posted 10-Jun-2022 00:01


HP Envy Inspire 7900e Review
Posted 9-Jun-2022 20:31


Philips Hue Starter Kit Review
Posted 4-Jun-2022 11:10


Sony Expands Its Wireless Speaker X-series Range
Posted 4-Jun-2022 10:25









Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.