Hedge funds are used by the elite to suppress the wealth of the middle class. The wealthy pool their money together to suppress stocks that your mutual funds hold. In an insult to your injury, the wealthy reap vast sums of money from you without your notice. These hedge fund titans short stocks in the billions of dollars to drive stock prices down. Ground rules; for every transaction there must be a buyer and a seller. There are two motivations in a stock transaction, either the person is going long, betting the price will increase, or they are going short, betting the price will decrease.
Going Short
How to short a stock:
You borrow a stock-share from a friend or a broker.
You agree to pay a percentage of the value of the stock for the privilege.
You sell the borrowed stock-share.
You wait.
If the stock-share goes down, you make a profit by buying it back and returning it to the owner. Here’s the key; the difference between your sell high price and your buy low price is your profit.
Shorting stocks is really, really, really dangerous! If you buy a stock, the worst that can happen is its value goes to zero. Whereas, shorting stocks can give exposure to infinite loss. Meaning, when a stock is shorted, there is the possibility that the price will go up, up, and away. To make matters worse, there is a contract replacement date, usually 30 days. Hence if the stock-share goes way up, you can’t wait for the price to fall.
Short Squeeze
A Short Squeeze occurs when those that have shorted positions can’t buy back their borrowed stock-shares to fulfill their contracts and stop their losses.
This is happening to the hedge funds. People on Reddit noticed that the hedge funds had shorted GameStop stock. Those people on Reddit agreed in mass to buy GameStop stock-shares. Hence, because of the law of supply and demand, the stock-share price went from $32 a share to a high of over $400. I must stress, the Reddit folks did nothing illegal.
Cuomo did a good job. Clearly, the CEO for Robinhood was lying. Listen to the word salad spew.
Robinhood CEO Vlad Tenev defends the company's decision to limit trading on some symbols following the GameStop stock chaos, saying they must "prudently manage the risk and the deposit requirements." pic.twitter.com/z2Ar8d9YX1
— Christopher C. Cuomo (@ChrisCuomo) January 29, 2021
Capitalism or Crony Corporatism?
— Steve Cortes (@CortesSteve) January 29, 2021
The American economic nationalist populist cause gains steam...#ChalkTalk pic.twitter.com/VCIqXec4dW
Published by Chief Editor, Sammy Campbell. Written by Mark Pullen.