They’re supposed to have collateral (which increases as the stock rises, and collateral requirements can be higher for more volatile stocks), it’s all part of the risk management a broker does. Current requirements on IB for GME shorts is 300%.
If the stock moves up and they don’t have collateral, the broker will forcibly liquidate the position. (FWIW getting shares isn’t an issue so far as @Julianek mentioned, there’s enormous volumes, plus I assume most index funds are lending shares too)
(Tho there’s probably a possibility of the market moving too quickly even at 300% but at this point there’s probably a trading halt as well)
Ok, so the lender gets cash out of the collateral that was posted by the short seller? Or does the exchange have to take that cash and buy a share to return? In either case, it makes sense for brokers to increase the collateral requirements, but I don’t know why they would stop non-margin purchases.
See @Julianek post above, it might have to do with liquidity needed for settlement. Personally I’m waiting for today’s Money Stuff newsletter hoping he’ll explain all of it in clear terms
If it’s limited to closing-only (see also clon’s screenshot), it’s not halted.
As you can see in my posts above, I bought between 20:14 and 20:36 local time in Switzerland yesterday. That is squarely in unhalted afternoon timeframe with - relatively - stable prices.
I also checked the NYSE trading halts and trading was not halted.
“option trading”.
I wasn’t trying to trade in options.
Where can we find a recent list of shorts (including Gamestop) with the percentage of shorts in proportion to the number of shares? I’ve see it but it was lost in the flood of “information” on WSB and other sources…
I know, I was just posting what the official release said. I wonder if they initially fat fingered and blocked all transaction before doing it option only? No idea…
edit: rereading the release, I’m wondering, maybe they mean that it can only be traded on margin account? (with 100% collateral) (possibly margin has less risk for them because they’re allowed to do more things if things break during settlement?)
Here is a list for the Jan. 27th. GameStop is still at 120% short !..
From other sources, from the short seller perspective, the interest rates for borrowing shares are quite high, if they are tempted to double down.
Can you support this by buying GS2C in the Frankfurt exchange?
If yes, Is it best to wait until the Wall street exchange opens at 15.30 swiss time, to see how the price has changed? Or is it better to just buy now before it opens?
If a short seller surrenders, I guess it will be during the US session, so it’s better to buy before. (Disclaimer: no recommendation - trade at your own risk).
They don’t mention if the rate is based on total outstanding shares or available float. It looks to be in line the previous rates for total outstanding. The percentage of float was much higher earlier.
It’s important to remember that few if any of those are the original shorts who by now should have covered. New shorts have entered at higher prices and they are much more comfortable than the original ones.
Nice of them to donate their money to Wall Street, I’m sure they’ll be thankful
Yeah and whenever one is closing due to risk management, there’s likely another entering. At the end you can predict someone who shorted will win big, it’s just a gamble (but with careful risk management it’s likely doable)
An interesting 20minutes, highlighting the many problems that lead to todays situation. In comparison to RH’s Vlad Tenev, Anthony Denier sounds much more upright.
Does it mean that if you enter now like the little piranha rushing to join the others for eating the injured shark, there is actually a much larger shark, in good shape, waiting behind?..
there is a high cost involved in rolling a little shark into a bigger shark. if you have endless liquidity you can keep on shorting the market, sure. but as we have seen citron or melvin ran out of it fairly quickly, robinhood apparently almost ran out of funds as a result as well. it seems very limited how long shorting on such an intense level can be kept up.
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