So a quick thread about hedge funds and meme stocks. Yes, this is a popular uprising, no this is not the new occupy wall street, in fact it's highly likely everything will disappear after this weekend, here is why. Without attempting to explain the stock market to those who /1

don't understand it, a short position is when an entity, either a person or a fund, "borrows" a stock agreeing to pay it back later at the market price, essentially making a bet that the price will go down, a prime company to do this for would be a brick and mortar store /2

that sells goods that are now distributed mainly through digital distribution IE gamestop. However, if the price goes up, the shortseller is obligated to pay for the stocks at market price and can in theory lose an infinite amount of money. Some time ago, someone on /3

r/wallstreetbets noticed there were some companies that gamestock had a ridiculous amount of shorts on it, thus driving the price artificially down, and went long (buying contracts to buy stock at a low price, essentially betting the price will go up.) this generally /4

causes the price of a stock to go up if there is a lot of long interest in it, and if the price is above the short price, the shorts are forced to buy stock to cover their shorts, driving up the price even more, creating the "short squeeze" where there is a rapid increase /5

in stock price as the longs hold onto their shares, forcing the shorts to buy at ever higher prices to cover their shorts. This is what happened and is happening with gamestock, and to a lesser degree with things like AMC, blackberry, etc. But why is this not going to /6

happen again? Several reasons, the first is that it was kind of an accident to begin with, some arrogant assholes at one particular hedge fund decided to have a massive short interest in gamestock, and now that they've seen what will happen, no one is likely to ever short a /7

stock to that degree again, even if there is no new regulation. The second is that this was a well publicized event, and all the big players will now be watching for it and attempting to duplicate it, so any future plays like this won't be playing against wall street, it will /8

be playing with them. So enjoy the fun and have a laugh at Gabe Plotkin (we all know Elon is), but don't make this one time event that will sputter out by the end of the month when all the shorts are covered into some sort movement to destroy the stock market establishment /9

because it won't. We gave a few of them a good kick in the dick, but they'll put a cup on now, and it won't happen again. Ride your rockets, enjoy the view, but don't push it, you'll end up breaking yourself before you break them. None of this was financial advice and should /10

not be viewed as such, but just the opinions of a random on the internet who's up a few grand and enjoying the view from a rocketship. /end