I think these are two different questions. For the first:
I’d assume that he originally bought calls from a broker that didn’t actually want to be exposed to Gamestop stock. (The seller of a call is basically insuring against a stock price going up.) What you’d expect is that BANK sells the calls and immediately delta hedges the newly-created option exposure by buying shares of stock. So the combination of short call/long stock makes BANK indifferent to whether the stock price goes up or down. BANK buying the shares (as the hedge) is what puts pressure on the stock price initially.
Presumably the same thing would happen in reverse - when BANK buys back the calls, they are now left with long exposure to gamestop (because they only have the long stock position once the option position has been cancelled), so they sell those shares they’d previously been holding as a hedge. So I think the answer to your first question is yes, selling calls can exert downward pressure on the stock price.
Your second question is slightly different, I think. What happens if someone converts their option holdings to stock holdings at equal dollars? I think you end up in the same place - call options are leveraged forms of stock ownership, so if you convert $100 of levered ownership into $100 of unlevered ownership, you’re reducing the number of shares that you’re net long. So I’d expect that transaction to also exert downward pressure on the stock price.
Related to this, I thought the Levine article was really good.
What I don’t understand, is why are these hedge funds (im assuming its hedge funds), so MEGASHORT on these stonks that are drilling so far below their ATH. It seems to me like they are actually the greedy ones if they have had shorts open for so long on stonks that reached their ATL (assuming they shorted at a higher price), or they are just idiots if they are doing massive shorts on companies at their ATL.
Experienced well-being rises with income, even above $75,000 per year
Past research has found that experienced well-being does not increase above incomes of $75,000/y. This finding has been the focus of substantial attention from researchers and the general public, yet is based on a dataset with a measure of experienced well-being that may or may not be indicative of actual emotional experience (retrospective, dichotomous reports). Here, over one million real-time reports of experienced well-being from a large US sample show evidence that experienced well-being rises linearly with log income, with an equally steep slope above $80,000 as below it. This suggests that higher incomes may still have potential to improve people’s day-to-day well-being, rather than having already reached a plateau for many people in wealthy countries.
You’re not wrong, but keep in mind that most hedge funds hold a mix of long and short strategies designed to create a total portfolio behavior. Like they may not be betting specifically that Gamestop will go down, but are holding a bunch of positions that are net positive for anticipated macro scenarios. Their downfall is that their basket of positions definitely would not have contemplated the kinds of moves that happened in the last couple of days.
no, there’s still a limit to what they can meme. Gamestop worked out the best because every person in reddit knows what that is and probably was in one not too long ago.
They’re still trying to push others but Dillards is too boring/regional I think to get meme status. I’m actually following one now on ELY, I like the idea with casuals eventually overvaluing topgolf even if I’m just so-so on the company but stocks are about chasing growth. lol what happened to me
Also more LOL to anyone who says you can’t beat the market for the thousandth time I’ve posted that probably by now when people made millions on gamestop.
at this point, there’s a lot of reasons to suggest Gamestop is like a $12-20 stock or something because new board and shift in idea–it’s still gambling a bit, but makes sense in that range. So kudos to the guy at 4, but I’m sure he’s sold out of a few milly by now and whatever the rest because MOON OR BUST.
My favorite part of reading through the WSB stuff is when you see the 500 word essays on why GME is going to the moon and all this stuff about never selling, diamond hands, etc, then you skip to the end of the post and its like
Position: 3 shares at $70
Obviously some people on WSB have huge positions but a lot of it is just people with like a few shares writing up novellas trying to get more people to buy.
well I don’t care how much it’s up or will go up or reddit shitposting you can NOT get me to buy the mall owning MAC one.
what a list, IRBT was a stock I did own but dumped completely at one point (correctly, went down 60%) and now it’s worth more than I dumped it at. DDS I’ve posted bashing on 2p2 a number of times, it also went down 50% and now is worth more than when I bashed it. sigh I guess DDS case is we’re still standing and some others didn’t you have to come here now suckers.
a bit stumped why FIZZ would be shorted that much but haven’t looked into that one.
