wallstreetbets Reddit dudes got duped into buying silver.
These newbies opened trading accounts, bought silver without even knowing anything about Leverage/Lots. People have lost thousands in hours.
Hilarious stuff.
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GameStop shares are the worst. I saw people losing hundreds of thousands of dollars from all over the world. Proclaiming to the moon while their shares tanked from $400 each to now $50. One thing those Reddit and Robinhood traders didn’t realize is their combined capital is hundreds of times less than that of hedgefunds. So hedge funds were just taking their positions ie whenever the Robinhood trader bids, the hedge fund takes a short position. Which keeps pushing the stock price up, but soon there’s not enough trading by Robinhood traders, then the price heads the other way.
Last Sunday when GameStop stock was trading at $110, I saw a hedge fund take a $75 option expiring Friday. Worth $1.5 million. That means if the stock didn’t trade at $75 or below, the hedge guy would have lost the whole $1.5m. I knew the hedge fund must have been looking at some volume data to have risked that kind of money. Sure enough, the stock hit $70 on Thursday and went to $60 by Friday. The fund made almost $2m in less than a week.