This. Considering moves made by new administration, future of market looks dim, but this isn't it.....yet.

Large Wall Street hedge funds have developed this market strategy where they gang up on a failing stock.....say Game Stop. Say its trading at $20 a share. They start selling short......selling stock they don't have. Supply (sellers selling) starts driving the price down. They then drive it all the way into the ground......say $2 a share, then start buying to cover their shorts. They make $18 a share profit no different than if they bought at $2 and rode it up to $20. And destroy company after company in the process. Think of it as administering a dispatch shot. BTW, for movie buffs, this was the same trick Louis and Valentine played on the Duke Bros. in Trading Places with orange juice futures.

So a bunch of small investors, mom and pop, kids, etc. got together on a Reddit forum and looked at stocks that had the largest number of short positions, and they ganged up on the big guys. About a million of them. They started buying.....stock now going straight up and short positions losing money hand over fist. Soaring stock creates it's own wind sucking in speculative buyers. Hedge funds can't get out and losing millions by the minute. So now they got to sell to cover losses. So that is why you got Game Stop going from $2 a share to $350 in a matter of days..........and a sell off of stocks to cover all those losses. Once the dust settles, money will be made on Game Stop coming back down. Where it is today is way out of whack with earnings.

So this door swings both ways. Folks that made millions off Game Stop Trade looking for more Hedge Fund shorts and will be doing it again.

So don't get too excited.....yet.

Does anyone know of an ETF to short he market? I agree with most of the sentiment that the market will rise in the long term but I wouldn't mind being a little more defensive and trying to bet on a market pull back without shorting individual stocks.

We prosper from continued pessimism. It drives the bulls
Beware when the euphoria begins and we are a long way from that.
I'm all in and have been all in for years.

What you are looking for is called an "inverse ETF" I think there are about 10 of them currently. Beware though...........these are riskier than a vanilla ETF.

doge coin just hit .02
Up 70% today

Robinhood Blocks Buying in GameStop, AMC, and Other Stocks. Other Brokers Also Add Guardrails.



Jan. 28, 2021 9:34 am ET , Barron's


Investing app Robinhood blocked access to GameStop and other highflying names on Thursday as trading surged among retail users.

The move comes after GameStop (GME) stock has shot higher over the past week, inspiring a short squeeze. The action -- driven by retail traders often using options -- has spread to other names like BlackBerry (BB), AMC Entertainment Holdings (AMC), and Bed Bath & Beyond (BBBY). Several of those stocks were falling in premarket trading after enormous run-ups in the past few days.

Users began reporting that they couldn’t trade GameStop and other stocks on Thursday. They got a message that “This stock is not supported on Robinhood.”

In a statement on Thursday, Robinhood detailed which stocks now had restrictions. “In light of recent volatility, we are restricting transactions for certain securities to position closing only,” the company said. These include AMC Entertainment, BlackBerry, Bed Bath & Beyond, Express (EXPR), GameStop, Koss (Koss), Naked Brand Group (NAKD), and Nokia (NOK).

“We also raised margin requirements for certain securities,” Robinhood said. The trading platform is raising margin requirements for investors in GameStop and AMC to 100%, Robinhood told Barron’s on Wednesday.

On Thursday morning, Robinhood was also reporting outages.

Other brokers have instituted similar restrictions. Interactive Brokers (IBKR) on Wednesday put AMC, BlackBerry, Express, GameStop, and Koss option trading into liquidation “due to the extraordinary volatility in the markets,” the company said.

“In addition, long stock positions will require 100% margin and short stock positions will require 300% margin until further notice,” the company said. “We do not believe this situation will subside until the exchanges and regulators halt or put certain symbols into liquidation only. We will continue to monitor market conditions and may add or remove symbols as may be warranted.”

TD Ameritrade (AMTD) also placed restrictions on some transactions in GameStop and other securities, the broker said on Wednesday. A spokeswoman didn’t specify exactly what the company was doing but said it could include “actions like increasing margin requirements, or limiting certain types of transactions, like short sales and those that may involve unlimited risk. It is not uncommon for us to make such decisions, which we consider on an individual basis, in the interest of mitigating risk.”

“We have been adjusting our requirements for several days as we continued to see trends indicating unusual volume in an unprecedented market environment, which appear to be divorced from traditional market fundamentals,” the company said. “We have made what we believe to be prudent and appropriate decisions to place some limits on certain transactions for certain securities.”

And fast-growing privately held broker Webull said it was limiting some activities, too.

“Webull has been very successful in limiting our intraday risk during the course of these events by not allowing any short positions in these volatile names since as early as Friday of last week,” CEO Anthony Denier told Barron’s. “Trading has been open for these stocks and uninterrupted amidst this volatility and the only new restrictions we have placed is not allowing market orders opening of new multi-leg option strategy positions.”

Robinhood has grown faster than the rest of the industry over the past year, attracting younger investors. Last year, it said it had more than 13 million account-holders, adding 3 million from January until May. The privately held broker was sued last month by a Massachusetts regulator on allegations that it encourages risky investing among its clientele. The company denied those allegations and said it does not recommend stocks.

On Wednesday night, Robinhood sent a notice to users directing them to educational products in light of the recent volatility.

One trader who has made money in the GameStop trade through his Webull account was frustrated by the new limits.

“It’s one thing if I had a pattern of misconduct, or a lot of violations. It’s another thing for you to tell me that you can’t trade this stock because we don’t like what’s happening to it,” Brandon Luczek, a 28-year-old who lives in Virginia, told Barron’s on Wednesday night. “That’s not for you to decide. I have my own personal risk tolerance.”

Others on reddit’s wallstreetbets forum lashed out at Robinhood. “How in the (This word is unacceptable on Trapperman) is this legal? They are tanking our legitimately bought and held stocks/options by arbitrarily restricting trading,” one wrote.

Free market at work.

Oh wait, it's the free market protecting the elite.

Some of each I think.

I certainly expect to see some law suits out of this one. But I think a lot of people are missing the fact that the brokerages are also protecting their customers.....which they have a legal obligation to do.

I have to lay a lot of the blame at the feet of the SEC . They should have stopped this last week. Now I suspect they will go back in time and bust a lot of the trades that were made. That will just make more people angry.

Bottom line is you better know what you are getting into when you start using leverage and also understand the legal possibilities that could work against you.

On the other hand, there is a lot of schadenfreude involved in seeing the hedgies get their heads handed to them.

The little guys gave them a black-eye at their own game.

Crony Capitalism..

As gas goes up prices will rise people will have less discretionary money to spend. History is repeating itself. With all the green new deal going on energy prices are going to go up. All the money being spent by our government will result in inflation. Remember what it was like in the years leading up to 2008 recession.

If they don't do something they get sued by investers saying we didn't know they didn't tell us and if they step up they have investers screaming it's my right to do what I want.

So they shut out the little guys?

Saw a report on Fox Biz.....the hedge funds had shorted Game Stop 140%. I'm not sure I understand what that means exactly, but on the surface, it would suggest they had sold an amount equal to 100% of all outstanding stock, plus 40% more. So when they had to liquidate the short trades, the stock they needed to buy to cancel out didn't exist. Goliaths set themselves up to be plucked like a chicken and a whole bunch of Baby David's were doing just that and got shut down?


And somehow the hedge funds managed to go short that far and nobody did anything to stop them? Little guys got a valid complaint.

Lawsuit filed already on the Gamestop Deal.

No wonder trappers are so poor.

I know it sounds impossible to be short more than 100% but it isn't. Because the same 100 shares can be shorted multiple times..

There were shares available to cover the short positions but not at prices that the shorts were willing to pay. That is where the shorts got in trouble. The shorts COULD have and SHOULD have been hedging but for decades Wall Street has thought so little of retail traders that they rarely hedged against retail trades. This time it came back to bite them.Arrogance plain & simple

The little guys have somewhat of a valid complaint. They are still able to close their positions but can't initiate new ones. That is actually an attempt to protect the little guys. Of course they don't see it that way because they only want to add fuel to the fire. Eventually they will burn down themselves if that continues.

Unfortunately, blameless people are getting hurt because hedge funds are liquidating positions in names that have no real reason to fall. The money to cover those shorts has to come from somewhere! There will also be a lot of retail investors holding GME they bought for $300 that they can only sell for something much less than $300. Life does come with a modicum of risk.

I just wrote an order to buy 100 shares of GME. No restrictions showed up to prevent it. I did not enter the order.

Then I wrote an order to sell short 100 shares and that order also was not restricted. I did not enter either order. I was just curious to see if my broker would prevent them.

There is only the up-tick rule currently in force that slows down short sales.

It must be different in Wisconsin, most of the trappers I know live comfortably.