Hey diamond hands,
as I am sure you have heard, there are rumors that short ladder attacks are being used to suppress the price of GME. While I held this belief for many days, I am now beginning to realize that even more insidious and backhanded techniques are being used against us. I mean seriously, there is simply no reasonable explanation for why a stock should drop in price. None.
The good news is that Melvin is more scared than ever. The bad news is that today was no short ladder attack. No, it was far worse.
Today we experienced a Short Escalator Omega Overflow attack
Most people here have at least a few days of investing experience under their belts, so I'm not going to dumb down these concepts for you. If you can understand a short ladder attack, you can understand this tactic as well.
Basically, a Short Escalator Omega Overflow attack (or Overflow attack for short) is the opposite of a short ladder attack. In a short ladder attack, shares are traded back and forth, with each trade a penny lower. In an overflow attack, the attack chooses to instead trade shares to an accomplice at incredibly high prices. How high you ask?
That's right, hedge funds have been selling single shares for billions of dollars right behind our backs. Why this price though? It's simple.
Every investment app, RH, TD, etc, use 32 bit integers to store prices. The maximum value of a 32 bit integer is 2,147,483,647. So what happens when it goes up by one? It goes negative.
This means that every share in an overflow attack is worth: -$2,147,483,647
What do you think this does to the price of a stock? If you answered bad things, you are correct. The sale of one of these shares is enough to send the price of a stock far into the negatives. Didn't think that stocks could go negative? I'm not surprised - that's another hedge fund secret. They don't tell you THAT on investopedia!
But as the critical thinkers you are, I'm sure you will now ask:
"Why isn't the stock price negative right now?"
The answer is because the squeeze is happening RIGHT NOW. Paper hands laughed at the idea of an infinity squeeze, but it happened and it was big. So big in fact that it overflowed the price itself.
So we know that GME overflowed in the squeeze. But by how much? Well we know that the price right now is $90. But we have to take the overflow squeeze into consideration.
If there is -$2,147,483,557 of pressure on prices, then to reach $90 the stock must cost 2,... keep reading on reddit ➡
It comes off as ignorant and rude. Not to mention the fact they most likely don't understand male anatomy. Not that they need to but what they need to understand is it is not your job to have a deep and full understanding of another gender's body and it is completely unfair to use that statement against someone. I see a lot of pretty popular opinions on this sub and I think this one is actually an unpopular opinion. lmk
EDIT: In the title, I meant it comes off as ignorant, said in body.
Some of you know me, some of you don't. If you DO, I ask that you not shill for me in the comments below, so we can stay within the rules of this sub.
This post is for the newbies, it is written as such, if you already know what delta hedging is, this post isn't for you. If you don't, well, lads and lasses, this is for you.
We need to understand a few basic things here, and in keeping with the spirit of this post, we're going to keep it dead simple.
Market Makers (the big dogs behind the scenes, facilitating your yolos) DO NOT CARE if your options plays pay out for you. They would be crazy to take on the level of risk that selling you an unhedged call or put would represent. These guys make money in other ways. So how can they not care? Simple, they hedge. Generally speaking, they buy enough shares when you buy a call so that even if you win hugely, they simply sell the shares they bought when you bought the call, and remain risk neutral. (Edit, I've been asked to explain that market makers make money by recouping the difference between the bid/ask spread. While this seems small, they do a LOT of it.)
Why does this matter?
Well, it matters because it introduces leverage. Which simply means it amplifies the effect your money has on the stock market.
As an example of how this works lets makes up a company. We'll call the ticker ABC. And we'll say the share price is 10 bucks. You, as a degenerate yolo artiste, only have 100 bucks to play with, and you think ABC is going to the mewn.
Now, you could do the boomer thing and just buy 10 shares of ABC (we'll call this scenario A), but a lifetime of minimum wage and renting a closet for 5k a month has done strange things to your risk management, so you decide to buy calls instead. You go to whatever broker isn't fucking robinhood and take a look at your options - and there you see it. For that SAME 100 bucks you can buy ten calls and leverage a hell of a lot more shares. (We'll call this scenario B) So you do it, you buy the calls.
How does your choice effect the underlying stock?
In scenario A, you bought ten shares, you increased demand for the stock by 10 shares, and this does almost but not exactly nothing to the price.
In scenario B, you bought 10 calls, you made Mr. MM buy a lot of shares to hedge your bet, and you increased the demand for the stock by a much larger number of shares. (This is an over simplification, but that's what we do here) Which does something t... keep reading on reddit ➡
I was never interested in the show before but I clicked it on Netflix on a whim and got hooked instantly and entered a vortex that I couldn't step out of. I started it from the very beginning and am now caught up to the most recent episode in season 17.
EDIT: Well, I think we are done here folks. My assumption that the data was reported in 100s must be incorrect, as the corresponding volume levels during these halts was only in the 100Ks (not in the millions). This leaves me disturbed by how easy it is for HFs to tank the price - a collective 110K (together with ancillary sales) was enough to tank the price 50%. Yikes. This can happen anytime the HFs want.
I got curious about what happened in last Wednesday's attack. I did some digging around and found that u/stocksbigplays is hosting live Level 2 data for meme stocks. The above image shows Wednesday's three massive sales that led to three halts in trading: 2.3M, 4.2M, and 4.5M shares were dumped at 12:22, 12:29, and 12:35 respectively (Level 2 data is reported in hundreds).
This massive amount of shares being sold lends credence to the theory that HFs are using conversions (buying a share, buying a put, and selling a call all at the same price) and using these shares as bullets to tank the stock without having to actually further short the stock. For an excellent explanation of this process, see https://www.youtube.com/watch?v=8Gq6EQCPrKY&list=LL&index=1.
11 million is the minimum number of shares employed - there were many many sales in the 10s to 100s of thousands range in this same time period, but may have just been margin traders freaking out.
It is likely that HFs have spent Thursday and Friday building up conversions for further attacks next week. If we see multiple consecutive drops/halts, this is likely the cause.
A passing thought: would it be possible for whales to use the opposite of a conversion to attack upwards? Would that mean short a stock, buy a call, and sell a put at the same price? If they too are trading at the microsecond level, they could identify the same bid vulnerabilities that the HFs use to time the initiation of such attacks. It seems like a whale could largely neutralize this attack with an appropriate counter.
Meh, what do I know. I just buy and hold.
When I was ~11yo my sister was pregnant with her third child, I asked "do they cut open the same spot every time you have a baby or do they make a new hole? And how come I never see stitches on your stomach"
Everybody enjoyed the laughed before my mom and sister gave me a detailed explanation of how babies are born... Blew my young mind.
Published courtesy of Citizens for Securities Reform, at http://counterfeitingstock.com/CS2.0/CounterfeitingStock.html
Abusive shorting are not random acts of a renegade hedge funds, but rather a coordinated business plan that is carried out by a collusive consortium of hedge funds and prime brokers, with help from their friends at the DTC and major clearinghouses. Potential target companies are identified, analyzed and prioritized. The attack is planned to its most minute detail.
The plan consists of taking a large short position, then crushing the stock price, and, if possible, putting the company into bankruptcy. Bankrupting the company is a short homerun because they never have to buy real shares to cover and they don't pay taxes on the ill-gotten gain.
When it is time to drive the stock price down, a blitzkrieg is unleashed against the company by a cabal of short hedge funds and prime brokers. The playbook is very similar from attack to attack, and the participating prime brokers and lead shorts are fairly consistent as well.
Typical tactics include the following:
Flooding the offer side of the board - Ultimately the price of a stock is found at the balance point where supply (offer) and demand (bid) for the shares find equilibrium. This equation happens every day for every stock traded. On days when more people want to buy than want to sell, the price goes up, and, conversely, when shares offered for sale exceed the demand, the price goes down.
The shorts manipulate the laws of supply and demand by flooding the offer side with counterfeit shares. They will do what has been called a short down ladder. It works as follows: Short A will sell a counterfeit share at $10. Short B will purchase that counterfeit share covering a previously open position. Short B will then offer a short (counterfeit) share at $9. Short A will hit that offer, or short B will come down and hit Short A's $9 bid. Short A buys the share for $9, covering his open $10 short and booking a $1 profit.
By repeating this process the shorts can put the stock price in a downward spiral. If there happens to be significant long buying, then the shorts draw from their reserve of "strategic fails-to-deliver" and flood the market with an avalanche of counterfeit shares that overwhelm the buy side demand. Attack days routinely see eighty percent or more of the shares offered for sale as counterfeit. Company news days are frequently attack days since the news will "mask" the extraordinary... keep reading on reddit ➡
I am a self-employed repair tech who also enjoys teaching - my main job is working in the chemistry teaching labs at a university.I would like to share my knowledge of woodwind instruments with anyone interested and figure a nice way to try this would be via a open Zoom call.
I would like to know if there would be interest in this before planning it, the intended audience is anyone who plays a woodwind instrument and would like to know how it works, how it goes wrong and what can be fixed with basic tools and minimal skill as well as some general maintenance tips and what to buy for a basic toolkit for emergency repairs.
If you are interested, please reply to this post with what time on a weekend would be best for you in UK time and if there is anything in particular you'd like me to cover, please feel free to include that and I'll try to remember to mention it.
There seems to be a decent amount of interest! I think I'll do a recording and post it as that appears to be the best way to cater to the very international audience. I think if I do the live class at 4pm UK time this Saturday (20th) that will include as many live participants as possible. If there are any burning questions I can do another recording to answer those.
I'll post the zoom link on here 10 mins before the class. I anticipate it will be around an hour long, I plan to talk about:
two types of key and their different screws and springs
how to disengage/reengage a needle spring
how to remove/replace clean and oil a key
how the mechanism links together
how to test for a leak
how to adjust flute adjusting screws
diagnosing what's wrong
Tenon cork is loose/fell off
pad fell out
spring popped out of place/snapped
I really wanna learn how to draw people, but I've heard that in order to learn to draw how to people I need to know how to draw anatomy and practice with that first.
Any suggestions for someone that's never drawn before on where to go?