yes that was very poor phrasing.

rest was excellent though

He was meant to make the stock pump not dump haha bazinga! great content though!

I am still short Tesla and last year I covered a bad short at the equivalent of 250. I am back short again and have Feb put spreads and getting ready to listen to my fav conference call to hear some classic Elon. By the way the quarter was terrible. Lost money again ex emissions credits which were huge at $401 million. Those will go away soon. Lot's of other questions within the release.

Answer: yes

Answer: Also yes.

Love Ed, Ash and Raoul.. "Tom - DARN, this is a family Channel right? Ash- We've said a lot worse"

There was in both instances. And in both instances it was widely ignored under either. 1 - That's the old guys who either don't "get it" or missed out 2 - Yes it's a bubble but I don't want to miss out but will know when the "real" top is put in.

Thanks, Tim. That's a good question. There are definitely some folks questioning the accuracy of the data on the short interest percentages.

Not at all- it's called re-hypothication! Calling Caitlin Long...

One answer I tripped across: Let us say there are 100 outstanding shares of company X held by investor A. Investor B comes in, borrows these 100 shares and short sells them to investor C. Which means, outstanding shares=100, short interest =100. Investor B borrows these 100 shares again from C and short sells them to investor D. So now, short interest is 200 and outstanding shares is 100.

Yup, that's right, Robert M. The way a stock's short interest can exceed its shares is outstanding is when a stock sold by a short seller is lent by the buyer’s broker to a second short seller, whose buyer’s broker lends it again, ad infinitum.

Yep. Robert and Dennis are both correct: It could certainly be asset re-hypothecation. In theory, assets could be re-hypothecated infinitely; in practice, I suspect there are mechanical constraints around the lending of the shares. The reality is we don't know exactly what the circumstances are. It's interesting that Tom expressed a bit of skepticism in the 151% figure that was stated on Seeking Alpha's data page as the short interest percentage. It's a really interesting question. We should dig into it in a future show when we can get more granular data around it.

So re-hypothication in short selling is kind of like fractional reserve banking, i.e. it’s really cool and fascinating that it can happen, and makes you scratch your head a bit until you get your head round it, but it can end up in a god awful mess if there is a run on the bank / pump in the stock...

This is a good question. The action of the Reddit Wall Street Bets in my opinion (you can differ with me, it's OK) pushes people with overconfidence to go "all in" very risky trades. I don't believe it is illegal just like I didn't believe it was illegal when some hedge funds would do idea dinners which had the Feds do a probe years ago which was dropped. Or when the Tiger Cubs all have similar positions because they all talk. With my work, I explain clearly the risks and recommend sizing appropriately which is usually 1-5% per position. The moral issue is that the "all in" "YOLO" "HODL" could and probably will cause many to blow up when the music stops. I'm happy for all that have made money and in my view with those incredible gains these investors should ring the register and lock in some gains.

To Tommy T. Thank you. I appreciate your reply and I generally respect your contributions on Real Vision. I felt your comments yesterday, however, were rather condescending. I mean that to be constructive feedback.

David, noted. I am sorry if I was condescending.

Interestingly, today, at this moment, Bitcoin down. Tried and true Treasuries up a bit. Hmmm.

Agreed your guest sympathies with the hedge fund manager expresses his obvious dislike of This phenomenon of changing dynamics.

It's interesting. I am still very new to this so I had read up about what a "short" is. Sounds to me that shorting is trying to manipulate the price of a stock. And this guy sounds pissed that the market is being manipulated by someone other than himself.

I don't know... I has similar thoughts when people were comparing the FAANGs at their ATHs post-March to the dot com era, which felt like a wrong comparison (trillion $ companies vs lots of zero revenue URLs like pets.com and of course some descent companies like Microsoft and Cisco). But I think that you can have multiple bubbles at once, it's not just one big one. S&P and Nasdaq are in bubble territory but may be sustainable given the Fed's activities for the time being. However, you may have some smaller in absolute size but larger in proportion bubbles further down the risk spectrum, for e.g. in the domain of GME and NIO. Despite the current sustainability of the large index bubbles, we don't know how a smaller but riskier bubble burst can affect them, just like pets,com affected Microsoft and Cisco. Agreed, you can always buy the dip, but it may go lower than 15% before any buyers step (just like in March), even if the Fed acts faster. The common view (right or wrong, I don't know) was that pre-March crash, retail participation was low, but that post-crash it was retail that drove markets higher, with institutions (at least on the active side) watching from the sidelines and waiting for the bear market rally to end. Sure, most have piled in now, but if retail gets burnt when GME-like bets turn sour, exit en masse, and cause a drop in the overall market, what happens if institutions under-weight equities once again and retail doesn't participate in the dip buying? I know everyone hates bears these days, as Tommy says, and I'm also one of those retail investors who lost their jobs due to Covid and now trades full-time (without stimulus checks). However, I don't trade from my parents' basement and use my profits to buy new Playstation 5 games. I use my profits to feed a family of 4 (including two very young children) so I tend to agree with bears like Tommy and Raoul and am more cautious than the r/wsb guys. And I could be 100% wrong on this one, but speaking of bubbles, I think Robin Hood traders themselves are a massive bubble. I've had plenty of friends over the years who traded profitably far down the risk spectrum (at least they were when they were talking about it), but when I ask them a few years later (when they're now working full time) how their trading is going and they all say the same thing: I gave up, I couldn't figure out... I lost a lot of money and realised I had no clue what I was doing. I think we might see that happen in the next year or two. Sorry for the book chapter... feel free to bash me with counterarguments.

LOL

You nailed it! Hilarious and so true!

CWH might be on deck.

How are the demographics of traders discovered and become known? How is it known as a matter of FACT that" 20-somethings" are driving the market?

Most investors only want to buy options, so the markets largely lopsided. Most people selling options are professional traders, market makers, or institutional dealers. They aren't interested in taking a directional view on a stock, they're selling volatility. They don't have to sell they just want to make money. They can be directionally neutral by selling the option and buying the underlying to hedge the delta (change in the price of the option due to change in the price of the underlying) and capture the spread between implied and realized volatility. Options also have gamma (change in delta due to changes in underlying). The closer to in the money an option gets, the delta starts to increase, so the seller of the option has to buy more of the underlying to cover their delta which further increases the price, which causes a further increase in delta, especially on these low float stocks.

https://www.squeezemetrics.com/download/The_Implied_Order_Book.pdf This is a pretty good (if dense) primer on how Gamma Squeezes (and other options greek craziness) occur.

Dealers are there to make markets regardless of the direction of the underlying. They are there to sell into a rising market or buy into a falling market and the only way they can do that is if they can hedge their positions. Without dealers, two willing parties can trade with each other on an exchange, but with a security like GME or Tesla, while you do have "shorts", they are more likely to be long puts (limited loss) rather than short calls (unlimited loss) so if you are trying to buy calls there may be no or very few sellers. Someone buying 50 contracts may have to go deeper into the order book to buy all 50 therefore negatively affecting their average execution price. Buying through a dealer would be cheaper. That's my understanding anyway. Also, generally speaking (not just wrt options), larger buyside institutions can get tighter spreads from dealers than by trading on an exchange.

Darn (to use Tommy's colourful language) - when I was typing my response I couldn't see any answers to Vitali's question... only when I pressed submit did James L's perfectly good answer appear - sorry for the duplication.

It’s basically just illegal (but unenforced) naked shorting isn’t it? Or is there some rehypothecation of shares involved?

Thanks, Joseph!

When I see the action and comments about the Reddit flash mob, all I could think was: Santa Claus : You'll shoot your eye out, kid. A Christmas Story And my dear departed Mother's words: And someone is going to be crying.

Many speculators hope you are correct. DLS

“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually, then suddenly.” The Sun Also Rises.

Was just going to type the same thing. Hilarious!

interesting take, Paul

Yeah in terms of opinions it's either balls to the wall, or eject, eject, eject. There is no middle ground anymore. You either get Maverick and Goose doing inverted polaroid pics, flipping the bird, or you get Cougar holding on too tight, sweating bullets, because a few Migs showed up. We all know Goose is gonna die eventually, and Maverick will be shaken up a bit, but manage to be the hero in the end. Figure out how you will be Maverick after goose hits the water limp, and enjoy what you can until that day.