Stock discussions

[sri_india]

6 minutes ago, undarware_troller said:

Are you Miniontada in CCDB?

Twitter , afdb evenings lo reddit ...lunch time lo office laptop ....  inthy bro naaa schedule ...no other websites 

[undarware_troller]

1 minute ago, sri_india said:

Twitter , afdb evenings lo reddit ...lunch time lo office laptop ....  inthy bro naaa schedule ...no other websites 

Konchem posts similar vunte doubt vacchi adiga

[Spartan]

5 minutes ago, sri_india said:

Twitter , afdb evenings lo reddit ...lunch time lo office laptop ....  inthy bro naaa schedule ...no other websites 

Laxmi movie lo venkatesh la cheppinav kada... @sri_india

[VictoryTDP]

47 minutes ago, Hector8 said:

Newbie here 

 

what are robinhood alternatives ?? and which is best to add funds asap

 

what is this tool/ app (BELOW) ? to buy at a specific rate ? (copied from internet) 

E-Trade

Fidelity

TdAmeritrade 

[sri_india]

2 minutes ago, Spartan said:

Laxmi movie lo venkatesh la cheppinav kada... @sri_india

office work cheyadanikee time ledhu antee , inka vere DB anteee ela bro 

[Hector8]

9 minutes ago, VictoryTDP said:

E-Trade

Fidelity

TdAmeritrade 

thanks.... which one have option to  set automatic buy or sell at a rate for particular stock ?

[dkchinnari]

8 minutes ago, sri_india said:

office work cheyadanikee time ledhu antee , inka vere DB anteee ela bro 

[sri_india]

1 minute ago, dkchinnari said:

10guthunavu gaaa ... kaani nee time nadusthundi 

[VictoryTDP]

2 minutes ago, Hector8 said:

thanks.... which one have option to  set automatic buy or sell at a rate for particular stock ?

annitlo untayi bro, automatic ante you set the buy or sell limit and the option will get executed if it hits that price.

[VictoryTDP]

11 minutes ago, sri_india said:

office work cheyadanikee time ledhu antee , inka vere DB anteee ela bro 

Good job. Naa laga contracting chestu same company lo many years unte ilage untadi 

[sri_india]

1 minute ago, VictoryTDP said:

Good job. Naa laga contracting chestu same company lo many years unte ilage untadi 

neenu FT bro ....

[Meowcatp]

Ocgn who suggested that this morning?? 2016 lo price ki ippatiki em Anna sambandham

undha?😳😳

[VictoryTDP]

2 minutes ago, sri_india said:

neenu FT bro ....

Nenu kaadu bro 

[Lal_Salaam]

good analogy on 

How does buying and selling stocks work?

What is short selling?

What is a short squeeze?

What is stock manipulation?

from Reddit.. Credit to https://www.reddit.com/user/bradorsomething/

How does buying and selling stocks work?

.

I own an orange factory. I want to raise money for building a new navel orange machine, so I issue orange stock. I make a special orange that you can buy for $1. I issue 1 million oranges, and raise $1 million. You now own an orange for every $1 you gave me.

That's all you get. If you're lucky, I might give you a fraction of how much I make with the new orange machine every year. But you buy the orange share because other people will want it later, when my company is big and successful, and you can try selling the orange share for more than the original dollar.

.

What is short selling?

.

You have 100 of my oranges. I come up to you Monday and say, "If you loan me those 100 oranges, I will give you $2 and your oranges back Friday. You agree, and I go off and sell your oranges for $1 each. I have $100 and owe you $2 and your oranges back. I hope your oranges will be cheaper Friday, and if they are only worth 50 cents, I buy 100 oranges and give you them and $2, and I am $48 richer.

.

What is a short squeeze?

.

Someone saw me make the deal on the oranges, and then immediately sell them. They know I have to have 100 oranges on Friday. So the go buy up all the oranges, and on Friday, when I try to buy oranges, they are standing there with a sign that says "oranges for sale $20." Anyone who wants to sell oranges is selling them there. I have to buy from them for $20 an orange. Now I have lost $1900 dollars buying the oranges back, and still owe the $2.

.

What is stock manipulation?

.

When I buy the 100 oranges, I go around and talk about how bad oranges are. I tell my friends not to let anyone buy oranges so demand drops. I go on CNBC and talk about how I bit into a nasty orange and threw up. Now oranges are 25 cents. How wonderful... I can buy my 100 oranges for $25, and now my profits are $73!

[Lal_Salaam]

one more

Hopefully this is helpful. I work in the stock market and my little brother asked me to explain what was going on. Here was my response:

Let’s say GameStop has 100 shares outstanding currently trading @ $20 per share (so if you own 1 share, you own 1%, 25 shares = 25% and so on)

That’s it. There are only 100 shares of GameStop. Throughout the day people are constantly buying and selling these shares for one reason or another (that’s why the stock price moves up and down constantly)

Now, typically when you think about making money in the stock market you typically think “buy low, sell high” 📈. In other words, buying Amazon when it was cheap, and now it’s worth 💰 💰 💰. In this case you would be speculating that the stock price of Amazon will go up ⬆️ in the future

• fun industry term: you are “bull-ish”

Here is where the short selling comes into play.

Let’s pretend You have a hedge fund. Alec’s hedge fund manager looks at GME (GameStop) and says “I think GME is over valued, it really should only be trading at $15 per share, not $20 🤔 “

In this situation, He is speculating that in the near future, the GME stock price will go down (to $15).

• another fun industry term; he would be “bear-ish” on GME

Now since the hedge fund manager thinks GME’s stock price will go down, He is going to try to make money on that guess by short selling (shorting) the stock.

To short the stock The manager is going to borrow some shares from someone else, bob, and sell them at the current market price (which is $20).

Let’s say he borrows 10 shares (total of only 100 remember) and sells them at the New York stock exchange for $20. He made $200 ($20 x 10 shares)

A while later, GMEs stock price suddenly dips (fun industry term: “down ticks”). It is now trading at $15.

Alec’s hedge fund manager was right! now don’t forget, we borrowed the shares from somebody else so we have to give those back. Alec’s hedge fund manager goes to the New York stock exchange and buys 10 shares @ $15 and returns those to the lender.

Alec’s hedge fund made $50 on that trade total (this is called “PnL”).

So the full life cycle:

• Borrowed 10 shares from “bob”

• Sold 10 @ $20 in the market

• Bought 10 @ $15 in the market

• Returned 10 shares to “bob”

Total profit = (10 x $20) - (10 x $15)

Okay.... so now onto what is actually happening with GameStop.

Let’s keep the example the same. GameStop has 100 total shares outstanding.

Now a bunch of hedge fund managers all think the exact thing that Alec’s hedge fund manager thought so they all short the stock with the expectation that the price will “downtick” in the future.

Here’s the thing.... someone on Reddit pointed out that despite the fact that GameStop only has 100 shares available at any given time, there were actually 125 shares on loan to cover short sales.

I know this part is confusing, which it should be. That doesn’t make sense mathematically. How can you have more shares loaned out than available? I’m going to gloss over those details and just say that it is possible, and does happen on occasion.

Now when you have a stock that is over shorted like this, you have one major risk, which is called a “gamma/short squeeze” . It does not occur often.

In a gamma/short squeeze, there are more shares loaned out than available. That is because all of those hedge fund managers thought the price would go down and got greedy and tried to make as much 💰 as possible and over borrowed assuming they would be able to cover it. But, someone pointed that out on Reddit, and was able to get that information to go viral. Now with all of these new people buying the stock, it forced the stock price up, very quickly (supply and demand).

Just like in the example, these hedge fund managers had to return the shares to the lender... the problem is, the stock price has gone up so much that if they have to “close their position” they’ll lose a fortune.

• Example: I sold 10 @ $20 = $200

Instead of going down; the stock price went up to $400. I have to return the stock to the lender and the only way to do it is to go buy it back. So:

• I buy 10 @ $400 = $4,000

• PnL = +$200 - $4,000

instead of making money; I lost $3,800.

This is basically what is happening with GME on a much bigger scale

Edit 1:

Lots of people asking about the “loan”. It’s not really a loan in the way that you’re thinking. When you execute an order to sell a share, you are required to Mark it as either “long” or “short”. What this really means is, do you “have” the stock right now in your bank account, or are you “able” to get it easily. So theoretically, everyone could be marking their orders as short sales, assuming the shares are easy to borrow and readily available, except, as the price goes up, people panic and start buying them all up and there aren’t enough to go around. This in turn drives the price up further. Hence the “squeeeeeeeze”

Typical settlement of a trade occurs t+2. In other words, you’re required to deliver the shares you sold short to the counter party within two business days of execution

Edit 2:

for those asking about option expiration:

An option as like a coupon. It gives the coupon holder the right to buy or sell stock, at a given price, on a given date.

Think about it this way. If I think that the stock price of GME is going to go up in the near future, I can buy a coupon (technically a call option) that gives me the right to purchase the stock for a set price at a later date. So if GME is @ $20, I may buy a call option that gives me the right to buy GME stock for $20 per share exactly one month from now (expiration). The idea is that within that time frame; the gme stock price will increase, thereby making my coupon valuable because it allows the owner to buy at a discount.

On the other side, you have someone who “writes” the contract. Essentially sells you the coupon. Let’s say GameStop is trading at $20, and you buy that $20 coupon. Well now, GameStop is trading at $400. So if your expiration is tomorrow you can “exercise” it, and the writer is required to deliver your shares for the agreed upon price, $20. To do that, they’ll probably have to go out and buy it at these exorbitant prices