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QBSacker

Joined: 03/04/1999 Posts: 15149
Likes: 16220


What ought to happen (if you ask me, which you did because I'm awesome*)


is that this is a situation that shows that margin requirements should be MUCH, MUCH, MUCH higher. I haven't looked at those in a long time, but back in the late 90s I believe you had to have 5% of a short position (either naked short or a written call option) in equity. That is purely insane (and it's precisely why the hedge funds in question are getting taken to the woodshed right now, because they have to put up capital literally at the end of every trading day to keep their margin requirements fulfilled. The higher GME goes, the more capital they get desperate for, simply in order to not be forced to immediately liquidate in order to meet margin requirements.

So IMHO, it's those margin requirements that should be thrust under the microscope here. Why the heck is it ok to let a guy with $10,000,000 in capital make a $200,000,000 short bet? That's wacko, and these redditors (and whoever is moving along with them) are proving that to near perfection right now.


(*and I am definitely awesome. Just ask our cats when I feed them. I'm like totally amazing.)


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[Post edited by QBSacker at 01/27/2021 9:46PM]

(In response to this post by SchmHoo)

Posted: 01/27/2021 at 9:46PM



+4

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Current Thread:
  Watched the NewReport last night on PBS -- GoochlandHoo 01/28/2021 08:22AM
  See e.g. tulip run up in -- Spudnut 01/27/2021 9:14PM
  Not sure people planted tulips as an F U movement -- Chesapeake HOO 01/27/2021 9:43PM
  They are -- Spudnut 01/27/2021 9:46PM
  But the end result will be -- Spudnut 01/27/2021 9:50PM
  Think it’s flawed logic -- hoos2008 01/27/2021 8:51PM
  Don't the shorts have a time limit, though? -- SchmHoo 01/27/2021 9:00PM
  Yes. -- 135Dobie 01/27/2021 9:15PM
  Assuming option expiry on Friday ** -- hoos2008 01/27/2021 9:02PM
  The Redditors have delivered their demands. -- JMHoo 01/27/2021 8:44PM
  LOL..."eat a dick" ** -- GoochlandHoo 01/28/2021 06:16AM
  #reddit ** -- Trigon 01/27/2021 9:09PM
  Or buy stocks. That works too. ** -- QBSacker 01/27/2021 9:35PM
  Mostly what's the current situation? -- SchmHoo 01/27/2021 8:23PM
  Sort of. Yes. I responded above about margin. ** -- 135Dobie 01/27/2021 9:00PM
  Copy and paste from a friend -- WamplerR 01/27/2021 10:09PM
  Thank you! ** -- CavMan1 01/28/2021 09:46AM
  I think it’s that simple -- WamplerR 01/27/2021 8:38PM

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