[shark]

An even duller one than VLE in the Shark snoozefolio is Wynnstay (WYN) an agricultural supplier. Classic underpriced Benjamin Graham type share with significant asset backing. Unlike VLE it’s ISAble and currently has a lovely 4% yield. Has traded fine through 2020.

[Falling Down]

Was just reading about how they are in the process of bankrupting a hedge fund that was betting against Game Stop, crazy shit https://mobile.twitter.com/williamlegate/status/1354166397874671616

It's been interesting watching this unfold. Although I don't think Melvin is going to go bankrupt as it looks like Citadel and Point 72 are going to bail it out. https://www.institutionalinvestor.com/article/b1q8swwwtgr7nt/Buried-in-Reddit-the-Seeds-of-Melvin-Capital-s-Crisis

Front page news on the FT today. Interesting stuff.

[teestub]

I see Melvin have now closed their short position. Lots of funds must be shitting themselves now.

[Jerry Morefat]

Was just reading about how they are in the process of bankrupting a hedge fund that was betting against Game Stop, crazy shit https://mobile.twitter.com/williamlegate/status/1354166397874671616

It's been interesting watching this unfold. Although I don't think Melvin is going to go bankrupt as it looks like Citadel and Point 72 are going to bail it out. https://www.institutionalinvestor.com/article/b1q8swwwtgr7nt/Buried-in-Reddit-the-Seeds-of-Melvin-Capital-s-Crisis

Front page news on the FT today. Interesting stuff.

Now it's front page news it'll be interesting to see if the SEC does anything about it, if they even can.

[petejh]

Maybe slightly off topic but what platforms are people using? I have so far stuck to the usual biggies (HL, II, IG) just because they are known beasts. Have people tried the zero commission/fee sites such as e-toro, trading 212 etc? Are the spreads acceptable? Any other issues to consider?

Here's a useful comparison of the main trading platforms. I use II, they're pricier at the low end but works well for what I want. It allows me to hold small-cap and micro-cap AIM, US, Australian and Canadian companies in my S+S ISA. Some of the others don't.

[RobK]

Thanks Pete (I can't seem to view that image for some reason though - Edit: working now!).

Also, apparently the whole GameStop saga has caused a load of trading platforms like RobinHood, Trading212 etc. to crash in the past hour or so when the American markets opened.

[petejh]

Hopefully that works..

[Ru]

Hugely volatile. It was up over 100% on opening after going up 90+% yesterday. I spent a few minutes watching the live prices: massive swings in price over the space of seconds. Impossible to trade on most platforms I imagine.

[petejh]

Getting live prices for it right now on II.. the price is changing +/- multiple cents with literally every 1-second click of refresh, never seen anything like it. 

[mburke]

you'll almost always end up with a different price to the one you expected to get when you hit the button too just because the distance between here and the exchange is further than it is for institutional traders

[Bradders]

Was just reading about how they are in the process of bankrupting a hedge fund that was betting against Game Stop, crazy shit https://mobile.twitter.com/williamlegate/status/1354166397874671616

It's been interesting watching this unfold. Although I don't think Melvin is going to go bankrupt as it looks like Citadel and Point 72 are going to bail it out. https://www.institutionalinvestor.com/article/b1q8swwwtgr7nt/Buried-in-Reddit-the-Seeds-of-Melvin-Capital-s-Crisis

Not sure what to make of all this in terms of the morality of it.

However, if this were happening in the UK I'm pretty sure the people involved on reddit would be committing an offence under the Market Abuse Regime, specifically around undertaking manipulating transactions.

In fact MAR 1.6.5 provides guidance around whether a person had legitimate reasons for their behaviour. One of the indications that the behaviour is not is "if the person has another, illegitimate, reason behind the transactions, bid or order to trade". And I reckon "I wanted to bankrupt another market participant" would probably fairly easily pass that test as being illegitimate.

Will be interesting to see the fallout. I've no idea whether the same rules apply in the US.

[Footwork]

Was just reading about how they are in the process of bankrupting a hedge fund that was betting against Game Stop, crazy shit https://mobile.twitter.com/williamlegate/status/1354166397874671616

It's been interesting watching this unfold. Although I don't think Melvin is going to go bankrupt as it looks like Citadel and Point 72 are going to bail it out. https://www.institutionalinvestor.com/article/b1q8swwwtgr7nt/Buried-in-Reddit-the-Seeds-of-Melvin-Capital-s-Crisis

Not sure what to make of all this in terms of the morality of it.

However, if this were happening in the UK I'm pretty sure the people involved on reddit would be committing an offence under the Market Abuse Regime, specifically around undertaking manipulating transactions.

In fact MAR 1.6.5 provides guidance around whether a person had legitimate reasons for their behaviour. One of the indications that the behaviour is not is "if the person has another, illegitimate, reason behind the transactions, bid or order to trade". And I reckon "I wanted to bankrupt another market participant" would probably fairly easily pass that test as being illegitimate.

Will be interesting to see the fallout. I've no idea whether the same rules apply in the US.

The morality? 

Fair play I say - especially if openly discussing it on a forum. It's like getting Rage Against the Machine to Christmas number one all over again.

This is probably no where near as immoral as what hedge funds do.

This entire post is based on my watching Wolf of Wall Street and The Big Short. I have not read MAR 

[Bradders]

Haha don't worry I'm not worrying about the poor little hedge fund managers 

It's more the wider argument they seem to be trying to make; that it's okay to manipulate the stock market if you believe your reasons are noble. And basically, it's not okay. We have rules to prevent market manipulation for a reason, one of those being there will always be people who've lost out unfairly, and it won't just be the hedge fund. I'd be willing to bet there will be a large number of people who joined the pile in too late and are now sitting on massive losses given the way the price has plummeted so far today.

If the hedge fund did go bust, chances are in order to take out it's short position it'll have borrowed stock from institutions, including pension funds. With the hedge fund bust, those funds would then lose out in turn, meaning this could have ended with a loss to who knows how many people's pensions.

On the flip side I'm not saying what the hedge funds do is right (or wrong actually). Just there are lots of issues around it and it's not as simple as laughing at a hedge fund manager losing their shirt.

[csl]

Surely shorting more stock than is available is illegal?

[chickencurry60]

Why would it be illegal?

[mburke]

i dont think regulators worry about it, it wouldnt be practical to short in such high quantities, i.e. all that is available

[Jerry Morefat]

Surely shorting more stock than is available is illegal?

I think naked short selling is broadly illegal but not under all circumstances. https://en.wikipedia.org/wiki/Naked_short_selling

[chickencurry60]

Is it not possible to have >100% short interest without naked shorting?
E.g. A owns 1 stock. B borrows the stock from A and sells in the market to C (normal short). C now owns 1 stock. D borrows the stock from C and sells in the market to E. AEC are all long and B and D are short, giving 200% short interest, but B and D both borrowed stock before selling so not a naked short. A touch confusing so not sure if I'm right

[Yossarian]

Haha don't worry I'm not worrying about the poor little hedge fund managers 

It's more the wider argument they seem to be trying to make; that it's okay to manipulate the stock market if you believe your reasons are noble. And basically, it's not okay. We have rules to prevent market manipulation for a reason, one of those being there will always be people who've lost out unfairly, and it won't just be the hedge fund. I'd be willing to bet there will be a large number of people who joined the pile in too late and are now sitting on massive losses given the way the price has plummeted so far today.

If the hedge fund did go bust, chances are in order to take out it's short position it'll have borrowed stock from institutions, including pension funds. With the hedge fund bust, those funds would then lose out in turn, meaning this could have ended with a loss to who knows how many people's pensions.

On the flip side I'm not saying what the hedge funds do is right (or wrong actually). Just there are lots of issues around it and it's not as simple as laughing at a hedge fund manager losing their shirt.

They're not all cunts. One particular chap who has just entered my radar gave away £177m in 2018, bought / donated 100 SAMBA II covid testing machines last year, donates to Extinction Rebellion, drives a Prius and goes to work on the tube with his sandwiches in a lunchbox.

[mburke]

Is it not possible to have >100% short interest without naked shorting?
E.g. A owns 1 stock. B borrows the stock from A and sells in the market to C (normal short). C now owns 1 stock. D borrows the stock from C and sells in the market to E. AEC are all long and B and D are short, giving 200% short interest, but B and D both borrowed stock before selling so not a naked short. A touch confusing so not sure if I'm right

Yea I’ve seen this before where share ownership has exceeded 100% - which can be because of shorting. You can construct naked shorts with puts but my understanding was that this wasn’t illegal across the board. It’s often restricted at certain times.

[36chambers]

Haha don't worry I'm not worrying about the poor little hedge fund managers 

It's more the wider argument they seem to be trying to make; that it's okay to manipulate the stock market if you believe your reasons are noble. And basically, it's not okay. We have rules to prevent market manipulation for a reason, one of those being there will always be people who've lost out unfairly, and it won't just be the hedge fund. I'd be willing to bet there will be a large number of people who joined the pile in too late and are now sitting on massive losses given the way the price has plummeted so far today.

If the hedge fund did go bust, chances are in order to take out it's short position it'll have borrowed stock from institutions, including pension funds. With the hedge fund bust, those funds would then lose out in turn, meaning this could have ended with a loss to who knows how many people's pensions.

On the flip side I'm not saying what the hedge funds do is right (or wrong actually). Just there are lots of issues around it and it's not as simple as laughing at a hedge fund manager losing their shirt.

They're not all cunts. One particular chap who has just entered my radar gave away £177m in 2018, bought / donated 100 SAMBA II covid testing machines last year, donates to Extinction Rebellion, drives a Prius and goes to work on the tube with his sandwiches in a lunchbox.

But what about the stuff that he does that he doesn't want you to know about?

[36chambers]

And I reckon "I wanted to bankrupt another market participant" would probably fairly easily pass that test as being illegitimate.

I think the main driver is to make some rocket money.

[Yossarian]

But what about the stuff that he does that he doesn't want you to know about?

Ab Ripper X, copious tick marks, at least three QDs pre-clipped.
(I think the Tube / sandwich knowledge is not well-known...)

[Coops_13]

And I reckon "I wanted to bankrupt another market participant" would probably fairly easily pass that test as being illegitimate.

I think the main driver is to make some rocket money.

All the SEC needs to do is search WSB for the rocket emoji and they're sorted #tothemoooon

[Jerry Morefat]

Is it not possible to have >100% short interest without naked shorting?
E.g. A owns 1 stock. B borrows the stock from A and sells in the market to C (normal short). C now owns 1 stock. D borrows the stock from C and sells in the market to E. AEC are all long and B and D are short, giving 200% short interest, but B and D both borrowed stock before selling so not a naked short. A touch confusing so not sure if I'm right

Yes, you're right. I think it's possible for short interest to legally exceed 100% with re-borrowing like this. I had read somewhere that Melvin had naked shorts in GME (which I thought was what was being referred to) but not sure how accurate this is.