No - see this is what I mean. You don’t understand what that data means. The options market for these stocks has become huge. Many people are long calls. If I am trading around my gamma, I will be shorting underlying against my calls. I can even be net long, even if I am short shares.
There are a lot of outright shorts. But there are also a lot of shorts for other reasons, and those people aren’t bleeding.
Hey, just a random spectator here. I'm super interested in learning as much as I can about this stuff. (currently a math PhD student considering a career in hedge funds)
Are there any resources or books or anything you'd suggest checking out? Right now I'm definitely at an early "learn as much as possible" stage and would love to hear any suggestions you might have on how to get exposure to this world.
That’s a link to a comprehensive beginner’s guide covering the GME saga so far, and offers plenty of supporting research in favour of a further potential squeeze. I hope it’s a useful starting point for you, assuming that’s what you were asking after!
Thanks for the link but I did mean more in general. I’ve got a textbook on mathematics for finance in the mail I’m planning on getting through this summer and was wondering of other potential resources to get a good background understanding of trading over all.
I guess one goal would be to be able to walk into a trading role at a hedge fund (long/short probably? Also curious about macro strategies) and be at a decent starting point to hit the ground running
You can study all you want, and any of the major text books on Options/BS-M will give you a primer. But, my best piece of advice: open a paper trading account and start running some options positions. Pick a few underlyings but make sure they're all different: 1x single name, 1x index, 1x commods/fx.
Then using what you've learned in your textbook, just keep your book hedged, without any opinion. Watch how your greeks change, and how that corresponds with your risk and pnl. Most people only really end up learning on the job. I didn't "get" options until I started running some risk and making some money. But that only happened when I first started working.
Sweet that makes sense. Also for choosing one underlying do you mean only trade options on one single security? So not doing company by company analysis but choosing a single company and then trading options on that one to learn the types of strategies?
In terms of learning options, fundamental analysis isn't relevant: the "why" doesn't matter. If you're wearing a bunch of 20 delta call spreads, and the underlying jumps 10% it's more important to learn what that means for your risk than it is to learn why the underlying moved.
Now of course you want to do both, because ultimately you'll want to know why vols are trading where they are, which will be determined by the behavior of the underlying. But at first you just want to get a qualitative sense of how all the pieces fit together. Then once you do, you can do you fundamental analysis and incorporate that thesis, and start to develop a vol thesis.
There are plenty of career hedge fund traders actively supporting this “conspiracy theory”.
One of the most well-known contributors at Superstonk is a former Citadel employee — he’s even spoken publicly about these events in an interview with CNBC. I think that makes him less of a “rando” than an otherwise-anonymous career hedge fund trader, who just happens to support your viewpoint.
There are experts on both sides. Nobody knows what’s going to happen. We’ll see!
As for “plenty” of career hedge fund traders: I’ll accept “plenty” is a bit of a meaningless word here. Given the anonymous nature of Redditors, I’ll struggle to give you any meaningful identities.
Anecdotally, however, I’ve come across quite a few who claim to be professionals, and were accompanied by some kind of reasonable evidence to back it up. /r/DDintoGME has often brought attention to these people.
There have been several professional traders providing regular updates from their corporate Bloomberg Terminals [1].
Michael Burry, famed investor from “The Big Short”, held a long position on GME [2]. I think he sold it last year, but his tweets have been very bullish about the prospect of a market crash and accompanying MOASS resulting from Wall St being overleveraged. Take this one with a pinch of salt.
Perhaps, most tellingly, there are plenty of major hedge funds — including Blackrock and Vanguard (both of which are full of career traders!) — who seem to think it’s worth holding [3].
My personal and professional online identities are linked. I'm not anonymous. Anyone could figure out who I am with 30 seconds of googling.
I've not argued for/against GME. I've just argued against the conspiracy theories. I have zero insight into their core business, and if I don't have edge, I don't trade. But I know a thing or two about how markets work, and all of the conspiracy nuts who have jumped onto the GME story just don't really get it. That's what I take issue with.
Rather than replying back, this person edited their inane comment, so my comment above is now totally out of context. This is the kind of person we're dealing with.
There are a lot of outright shorts. But there are also a lot of shorts for other reasons, and those people aren’t bleeding.