What will we see this week.
Last week we have not seen the biggest short covering by Hedge Funds since 2009. Around 30% of short positions have been closed in favour of longs. This does not move the market yet, as the net impact is very little (you buy longs to cover shorts and sell shorts to buy longs). But it does show the Hedge Funds don't want to end up like Melvin Capital, who are $7 billion down on shorting GME.
The regulators have stepped into to stop the retail madness, by limiting purchases in the likes of #GME and #AMC through regulatory pressure. This is not going to end well for Robinhood trading, who would struggle under ther weight of capitl being deployed through the platfom anyway.
#GME is going to continue this week, the issue is the underlying company is not worth anything like the value now ascribed. The WallStreetbets reddit's are full of the 'gamma' surge as Melvin and others are forced to quit their shorts and buy up the shares- forcing the price astronimically high. This happened with VW in 2008, when it briefly because the most valuable company in the world, after annoucing its merger with Porsche.
Newly rich retail investors in the US are going to like this game and look for other options. Odd cryptocurrency choices like Dogecoin will have a wild week and there is talk of buying physical silver. This is an interesting play, there has long been an excess of paper contracts in the silver market and a huge price spike could well cause an issue. Silver is an in demand product with a rising price in any event. But it is 100x the size of #GME at worst. The player on on the other end is not a small hedge fund, but he largest and canniest bank in the world, JP Morgan.
Not gonne lie, very exciting week and have freed up some play money to get involved, should be fun. The worst part is the pump and dump scum who are masquerading at WallStreetBets types, just creaming money off the newbies, sad to see by creating Whattsapp and Telegram groups with 'tips' they are all set to be short on. In the world of finance though, playing nasty is the only way.