Do you have to cash a personal check at the bank it's from or can you cash it at any bank?
I got a personal check from a bank that is far away, usually I get Chase or Wells Fargo checks but this one is from a smaller bank with fewer locations. Can I cash a this check at any bank no matter if I have an account with them or not?
10 interesting and useful ETFs with less than $1b AUM
I've been doing a lot of ETF research lately and wanted to share this list because I think that smaller ETFs fly under the radar all too often. Here are 10 ETFs with less than a billion dollars under management, but that I think are interesting and possibly useful, with reasons why:
THNQ: ROBO Global Artificial Intelligence ETF, https://roboglobaletfs.com/thnq . The process-based management of THNQ's holdings targets heavy exposure to companies leading development or execution with artificial intelligence and machine learning. My only issue with it is that for some reason they don't include Facebook in its holdings (and FB is famous with PyTorch and related work). Competitors in this thematic space include Global X's AIQ and iShares' IRBO. A newer ETF, THNQ has performed very, very well since inception, easily beating many other growth ETFs. Certainly a theme to watch for the coming decade.
SFY: SoFi Select 500 ETF, https://www.sofi.com/invest/etfs/sfy/ . This ETF is... highly intriguing. It has a 0.0% expense ratio, yes, free, waived until at least end of June 2021 (at which point it might go up to 0.19%). They're waiving the fee to draw in AUM. Its performance over the past trading year is +20%, so it beats the S&P 500 (easily). What they do is take the top 500 US stocks by market cap, then weight them according to a set of equations based on net income and sales growth as per the methodology. Not market-cap weighted, which is very unusual and thus nice to have as a tool in your toolkit. The ETF ends up with more weighted overlap with the S&P 500 than other large-cap growth ETFs such as VUG, IWZ, JKE, etc., because the "value" companies are still in there -- they're just not weighted as highly as they are in SPY or VOO. The usual suspects are still in the top 10: AAPL, AMZN, MSFT, TSLA, GOOGL, FB. SQ comes in at #15, which I think is very nice, and SQ is missing from an S&P 500 ETF. Granted, if the ER wasn't 0.0%, this ETF would be significantly less attractive. Index methodology here: https://www.solactive.com/wp-content/uploads/2019/03/Solactive-SoFi-US-500-Growth-Index-Guideline.pdf
DSTL: Distillate U.S. Fundamental Stability & Value ETF, https://distillatefunds.com/dstl . Its methodology is in the prospectus, https://distillatefunds.com/dstl/prospectus . Essentially, they try to combine "quality" and "value" factor investing. The fund's weighted overlap with SPY is only 20% according to etfrc.com. So it's not simply the S&P. It's also not the first ETF to use free cash flow as a factor (see also: COWZ, TTAC, neither of which I really like). Its ER is only 0.39%, which is reasonably low for small-ish specialty ETFs. But how does it perform? Well, since inception over 2 years ago it has kept pace with or outperformed the S&P 500 and iShares' US quality and value factor ETFs every step of the way. Gotta admit, I'm kinda impressed. Their top holdings right now are: JNJ, UNH, INTC, WMT, GOOGL, HD, PG, CSCO, AMGN, and AVGO. Surprisingly, compared to SPY, they're most underweight in financials. I would've thought they scored well on those cash flow metrics but maybe the banks score poorly on their debt metric and they don't compensate for banks having a different business model than, say, JNJ. Really neat non-market-cap weighted ETF!
FRDM: Freedom 100 Emerging Markets ETF, https://freedometfs.com/frdm/ . It's a very new emerging markets ETF that is not market-cap weighted and filters countries based on human and economic freedom scores. Top holdings include TSMC, Samsung, and CD Projekt Red. If you're concerned about international tensions and based in North America, this could be something you'd like. Also a rare way to get very high weight to tech outside China in an emerging markets ETF. Very unusual and a neat tool to have in your emerging markets investing toolbox!
EMXC: iShares MSCI Emerging Markets ex China ETF, https://www.ishares.com/us/products/288504/ishares-msci-emerging-markets-ex-china-etf-fund . Also an ex-China emerging markets fund, but otherwise it follows a broad MSCI mark-cap weighted index. Very top-heavy in Korea, Taiwan, India, and Brazil. It's another tool to stay in emerging markets but specifically tailor your China exposure through some other portfolio choice (or have none at all). Like in FRDM, you get heavy exposure to TSMC and Samsung.
IMTM: iShares MSCI Intl Momentum Factor ETF, https://www.ishares.com/us/products/271538/ishares-msci-international-developed-momentum-factor-etf . One of the few ways to get exposure to trending stocks in developed non-US markets. Really heavy on tech and luxury. If you're bored of holding EFA or VEA and want greater returns from non-US developed markets, check this out, it may be something you like. High exposure to Shopify, Sony, Nintendo, LVMH.
SWAN: AMPLIFY BLACKSWAN GROWTH & TREASURY CORE ETF, https://amplifyetfs.com/swan.html . Treasuries plus SPY LEAP options. Its performance in 2020 was great -- saved you during the crash, and gets you most of the S&P 500 upside during "normal" times. Kind of a barbell strategy; an interesting conservative ETF. Probably of greater interest to people near or in retirement. Amplify has a whole set of thematic ETFs, much like Global X.
NTSX: WisdomTree 90/60 U.S. Balanced Fund, https://www.wisdomtree.com/etfs/asset-allocation/ntsx . Another fund that deals with both US large caps and treasuries. But in this case, it uses treasury futures as leveraged exposure to get 90% equities, 60% treasuries total exposure. Quite a clever package and designed for long-term holding with reduced volatility, while likely outperforming a 60/40 balanced fund. There's a huge thread on bogleheads.org about it with a lot of people who like its design.
IGBH: iShares Interest Rate Hedged Long-Term Corporate Bond ETF, https://www.ishares.com/us/products/275397/ishares-interest-rate-hedged-10-year-credit-bond-etf . This is an interest-rate hedged long-term corporate bond ETF. You see, when treasury yields rise, as is expected the next year or two, corporate bond yields also rise. But that means the price of the bonds goes down -- bad for bond ETF values. Hedging the rates allows you to still collect distributions and have lower volatility than equities, but avoid the interest-rate risk. A whole lot of money has flowed into this and its sister ETF, LQDH, in the past 6 months because of historically low treasury yields.
ok, here's a bonus #11:
PPA: Invesco Aerospace & Defense ETF, https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=PPA . This is a broad defense industry ETF, and may have some deep value right now as the industry has lagged for the past year. But the world is still a dangerous place and if war breaks out these companies will benefit; a good ETF to have watchlisted. US and allied defense spending keeps chugging along. Also, many of these companies may be in Cathie Wood's ARKX. ITA is an alternative but lacks $HON, which is an important company in the sector.
Disclaimer: this is not financial advice and I currently have no position in any of those ETFs at time of posting, but that may change at any point in the future. What do you guys think? Any of those look like something you might invest in? Anyone else want to comment on a personal favorite small/medium sized fund? edit, 6 hours after OP: wow, this post blew up! I'm so happy many people are finding this discussion informative. Thanks for the awards and comments.
A friend of mine just sent this over to me. He's a noob and I'm a noob but in the true spirit of karma whoring for fake internet points I wanted to share and they said it's my funeral. Note we are both total retards, noobs and have no skin in the game cuz we too poor and can only afford plain popcorn, but we desperately want to see WSB succeed and Power to the Players! Do not take this as financial advice or god have mercy on your soul. Uh guys… so we may see a crash that makes Enron look like a joke. There could be more than a short going on here, and more than firms pulling capital from other companies to cover. I don’t mean to go all conspiracy theory on you, but hear me out.... I think everything is going so off-the-rails not because of the short, but because Vanguard, Fidelity and BlackRock have sold more stock than exists. This is illegal (duh) but it has happened lots of times in the past. In fact, we didn't have real laws against it until 2008. We may see some bizarre moves if WSB doesn't sell, because some people need to hide some crimes. No joke. Here's why I think this may be the case: ---------- The Background ---------- Read this first to understand how naked shorts work: https://www.sec.gov/about/offices/ocie/options-trading-risk-alert.pdf Basically, to short a stock, you must “borrow” the stock from another account, usually something like a margin account. This is something that typically the clearing house does on behest of the fund doing the shorting. Most people don’t even know when their shares are being borrowed by a hedge fund for the purposes of shorting. A “naked short” is when you short a stock, but don’t confirm that the stock you are borrowing actually exists. This can happen when a clearing house either purposefully or inadvertently (ahem, sure) lends the same stock more than once. This basically clones the stock, just like an item cloning glitch in a video game. There are now two copies of the same stock in existence being actively traded… at least temporarily. Hold that thought. Naked shorts can be devastating to the company being shorted, as not only do they lose liquidity because of the short, the cloned stocks serve to dilute the value of the real stocks being held by artificially increasing the number of stocks being traded. Especially for small companies doing initial investment rounds, this practically guarantees bankruptcy: the diluted value limits the amount of capital they can raise, as the company never sees the cash from the cloned stock. Now, after the 2008 crash the SEC in theory made this illegal. Obviously, this practice kills companies if the short succeeds or destroys markets if the short doesn’t succeed. Either way, someone gets hurt. HOWEVER, there’s a catch: Because hedge funds and clearing houses are permitted to operate behind closed doors, the SEC can only detect a naked short when a “failure to deliver” occurs. When someone calls the short, either because of a buy or because someone withdraws the right to loan their shares, the person shorting then has 3 days to deliver. If they can’t deliver the share (because it doesn’t exist) within 3 days, then this gets reported as a “failure to deliver”. Now, the SEC may look past a few of these because floats do happen, but too many and the SEC is obligated to open an investigation. But of course, that never happens. The clearinghouse only has to report the net deliveries, not the actual transactions. This means that as long as there is someone buying on the day the failure-to-deliver would occur, the clearinghouse can roll the transaction forward… basically just like floating a check. The non-existent cloned stock is bought with the new buy, and the sell of real shares that should have covered that buy is left open but doesn’t need to be fulfilled for three more days. The clock resets. This is sort of like somebody-I-know used to do by floating checks back and forth between two different bank accounts: keeping the money in the air for several weeks until payday by continually writing checks to cover checks. Super unethical, but does work. But, this can’t be continued indefinitely. There are SEC rules that make it tough to do this for longer than 21 days. IANAL, I don’t know every loophole, but that’s my understanding. This is why after 2008 it became so important for the hedge fund to bankrupt the target company. If the company goes bankrupt, then the shares cease to be and the books never resolve. Even some kinds of restructuring can keep the books from resolving. It’s still possible to cover this without bankrupting the company if you can get enough people to sell, but it’s easier to crash the company and just make it all go away while pocketing cash from more shares than were ever real. ---------- The WSB Play ---------- Ok, now read this: https://seekingalpha.com/article/4370860-gamestop-short-squeeze This was basically the original WSB plan back from October. Don't worry about the plan... we know what's going on here already. Melvin Capital shorted by 140% which is more than the float. Gamestop had enough cash to cover debt so it seemed unlikely they would fail unless the hedge funds forced it to. Squeeze looks obvious when you lay it out that way. BUT, there is one chart here that is super important when folks were trying to figure this out: look at the chart for institutional ownership! https://i.imgur.com/Jh5AI8V.png The top three names on that chart are Vanguard, Blackrock and Fidelity. As is suggested by the author, there is a strong likelihood that the top holders already loaned out all their shares to Melvin Capital. The shares had to come from somewhere, and this is the only place they could have come. This is why some people thought this was a good move. Not just because there was a short, but because they could see that all the shares had already been “borrowed” which would force the hedge fund to buy at any price. There were simply no more shares available to option for any other kind of fuckery. ---------- The Expected Response ---------- Okay, so WSB made their move. And predictably Robinhood and a bunch of trading platforms cut the ability to buy GME. Seems obvious enough as a strategy to stem the bleeding, regardless of whether it is coming from Robinhood or, as they claim, the brokerage above them limiting trades for reasons. Whatever. Either way, this is an obvious response. Likewise, there have been numerous pushes from the hedge funds to either convince WSB the positions are closed, or to convince them to change their position from GME to Silver. Despite what the news is reporting, no one in WSB appears to be buying silver. Maybe someone is, but it ain’t them. I did a site-wide search for silver, then pulled the post history for all the accounts that made the posts--of which there are shockingly few compared to what the news media is implying. The only accounts promoting this appear to be mostly bots: they became reddit premium within the last week, or they are necro accounts that have no posts for two or three years until suddenly dozens of silver related posts in the last few days. Conversely, there are been numerous long standing accounts warning others that these silver posts are bots. None of this is unexpected. Bots and media manipulation have been par for the course for political bullshit for the last few years. Boots on the ground, I have literally no idea where the news media is getting this story other than a change in silver pricing. I am not seeing any such discussion in related communities, and certainly none that pre-dates the news stories! To be fair and avoid conspiracy: I don’t hang out on twitter. There are retail traders outside of Reddit, and perhaps the media is clumping multiple groups together and mistaking Twitter for Reddit. Wouldn’t be the first time. Even on 4chan /b/ is not /pol/ and so on. People make that mistake all the time, so the misrepresentation may be entirely unintentional. I know the internet is a weird weird place and not everyone gets how it works. The last expected response is the fact that many of the hedge funds bought new short positions, especially assuming that most of Reddit would sell on Friday. (Which they did not) There are additional short positions held that expect WSB to fold within the next week. This coincides with the news reports expecting people to try to collect their profits. Of course, many people don't intend to do that. They aren't worried about the profits they want to see hedge funds go down. But all this movement leads to an obvious question: If there are no shares available to borrow, then what are they borrowing against for the short?? ---------- Clearing Houses are Sus ---------- Okay, soooo…. We expect Wall Street to prevent buying GME, which they have; and to unleash bots to change sentiment, which they have; and to promote news stories to try to change the situation, which they have. BUT, with all of this, there are two retail trading platforms that are still allowing GME trades: Vanguard and Fidelity. There is also one firm that started buying GameStop themselves five days ago: BlackRock. Sound like a familiar list?????? These are the firms that held the shares that the hedge funds were borrowing against to short. Now, if all the funds are trying to stop the bleeding, WHY would these firms still allow trading when no one else is… much less start buying themselves? Unless…. The shares DON’T EXIST. You can’t float a check between two accounts without writing another check. Someone needs to buy the shares in order to push the failure-to-deliver of the non-existent cloned stock into the future, otherwise the gig is up and the SEC finds out. If Vanguard and Fidelity become the only source for Redditors to buy from, then they can keep moving the doomsday clock forward. BlackRock can do the same thing by buying the stock themselves. Not as good a position, but not a lot of other choice if they need the books to read clean. Ok, someone with more experience than me can surely explain this better as there are some gotchas, but that's the basic gist. More proof those shares don’t exist? This academic paper from last year gives a clue: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3673531 Even if you own shares, you can’t vote in a shareholder’s meeting if your shares have been loaned out. Less than half of GameStop shareholders were eligible to vote by April of last year, with even fewer by August! There were so many shares borrowed SIX MONTHS AGO that it was affecting GameStop’s ability to hold a quorum among shareholders. Now the paper was only concerned about how short selling was affecting company’s ability to administer. The idea that these were naked shorts never came up AFAIK. But knowing what we do now, this seems increasingly likely. Also, for good measure beyond academia, this was in the news from last year: https://www.wsj.com/articles/how-investing-giants-gave-away-voting-power-ahead-of-a-shareholder-fight-11591793863 If you look at the volume that WSB has bought since then, and the amount held in options, and the amount of shares that have been borrowed against in the last week or two as hedge funds have placed a second set of shorts… well… it sure looks like there are way more shares on the market THAN EXIST. Of course, without having the records from the clearing houses, AFAIK there's no way to know for sure. Only the SEC can do that. I don’t mean the bet WSB played… that Marvin had 140% of the FLOAT. I mean that Vanguard, Fidelity and BlackRock have sold more than the TOTAL SHARES that EXIST. That's a completely different problem and it's punishable by jail time. Not a joke. It's basically counterfeiting stock shares, although that's not the terminology used. If this is true, who knows how many other times they’ve done this. Or maybe it's not true, and they just really like the stock??? If BlackRock started buying five days ago, and the longest they can likely do this is 21 days, then the doomsday clock doesn’t run out until at least February 17th. If Wall Street can get WSB to sell before then, then they won’t get caught and won’t go to jail. But if they don’t…. well, this will make Enron look like chump change. If enough people hold until the end of February, and this is truly the situation, then there is a chance that major parts of Wall Street are going to IMPLODE. ---------- The Conclusion ---------- Apes need diamond hands until the end of February in order to get the SEC involved, most likely somewhere between Feb 17th - 19th. Whether or not this will happen is anybody's guess, but if it does all heck may break loose! Wall Street will probably do everything in their power to prevent that. There are too many top players involved. Crazy moves are likely because stock brokers are smooshy and jail is uncomfortable. This may effect the market. (Duh) Bloomberg may be correct, but not at all for the reasons stated. But, that said, I wouldn't panic if it does. I think it will be fine in the long run, but that's a whole other set of reasoning for another day. Standard Disclaimer: This is not financial or legal advice. I am a retard and I have no idea what I am talking about. This is entirely speculation. :) Edit: here is the link to my second attempt to post to WSB, maybe a mod can reverse the removal? The post still shows listed on my end: https://www.reddit.com/wallstreetbets/comments/la9ms9/follow_the_crumbs_gme_exposed_the_meta/ Edit 2: Ok so don't ask me for stock advice. I don't know stocks and neither does my friend. We both think holding is the right move but beyond that we don't know and could even be wrong about that. And furthermore I don't want this to come off like we're accusing these companies of nefarious deeds. We don't know what is going on. The data is sus. The activities are sus. Google is your friend and the post tries to list sources for the research. Do your own research though! For ducks sake this is a rando post on UserSub. I'm happy to see the love but this is a one shot research dump by someone who knows nothing about this topic. Edit 3: u/traveljg has commented that Blackrock is on the record for selling not buying but I don't know enough about any of this to challenge the idea one way or another and my friend is off on some other crusade at this point so he's worthless for questions. This is why it is SUPER important that you do your own research and not take advice from a rando. Edit 4: I'm not responding to chat requests. If you have comments make them on the post. What is wrong with you retards?
Gamestop Big Picture: The Short Singularity Pt 3 - WTF edition
Disclaimer: I am not a financial advisor. This entire post represents my personal views and opinions, and should not be taken as financial advice (or advice of any kind whatsoever). I encourage you to do your own research, take anything I write with a grain of salt, and hold me accountable for any mistakes you may catch. Also, full disclosure, I hold a net long position in GME, but my cost basis is very low (average ~$67--I have to admit, the drop today was too tasty so my cost basis went up from yesterday)/share with my later buys averaged in), and I'm using money I can absolutely lose. My capital at risk and tolerance for risk generally is likely substantially different than yours. In this post I will go a little further and speculate more than I'd normally do in a post due to the questions I've been getting, so fair warning, some of it might be very wrong. I suspect we'll learn some of the truth years from now when some investigative journalist writes a book about it. Thank you everyone for the comments and questions on the first and second post on this topic. Today was a study in the power of fear, courage, and the levers you can pull when you wield billions of dollars... Woops, excuse me. I'm sorry hedge fund guys... I meant trillions of dollars--I just briefly forget you control not just your own but a lot of other peoples' money too for a moment there. Also, for people still trading this on market-based rationale (as I am), it was a good day to measure the conviction behind your thesis. I like to think I have conviction, but in case you are somehow not yet familiar with the legend of DFV, you need to see these posts (fair warning, nsfw, and some may be offended/triggered by the crude language). The last two posts might be impressive, but you should follow it in chronological order and pay attention to the evolution of sentiment in the comments to experience true enlightenment. Anyway, I apologize, but this post will be very long--there's just a lot to unpack.
Pre-Market
Disclaimer: given yesterday's pre-market action I didn't even pay attention to the screen until near retail pre-market. I'm less confident in my ability to read what's going on in a historical chart vs the feel I get watching live, but I'll try. Early in the pre-market it looks to me like some momentum traders are taking profit, discounting the probability that the short-side will give them a deep discount later, which you can reasonably assume given the strategy they ran yesterday. If they're right they can sell some small volume into the pre-market top, wait for the hedge funds try to run the price back down, and then lever up the gains even higher buying the dip. Buy-side here look to me like people FOMOing and YOLOing in at any price to grab their slice of gainz, or what looks to be market history in the making. No way are short-side hedge funds trying to cover anything at these prices. Mark Cuban--well said! Free markets baby! Mohamed El-Erian is money in the bank as always. "upgrade in quality" on the pandemic drop was the best, clearest actionable call while most were at peak panic, and boy did it print. Your identifying the bubble as the excessive short (vs blaming retail activity) is money yet again. Also, The PAIN TRADE (sorry, later interview segment I only have on DVR, couldn't find on youtube--maybe someone else can)! The short attack starts, but I'm hoping no one was panicking this time--we've seen it before. Looks like the momentum guys are minting money buying the double dip into market open. CNBC, please get a good market technician to explain the market action. Buy-side dominance, sell-side share availability evaporating into nothing (look at day-by-day volume last few days), this thing is now at runaway supercritical mass. There is no changing the trajectory unless you can change the very fabric of the market and the rules behind it (woops, I guess I should have knocked on wood there). If you know the mechanics, what's happening in the market with GME is not mysterious AT ALL. I feel like you guys are trying to scare retail out early "for their own good" (with all sincerity, to your credit) rather than explain what's happening. Possibly you also fear that explaining it would equate to enabling/encouraging people to keep trying to do it inappropriately (possibly fair point, but at least come out and say that if that's the case). Outside the market, however...wow.
You Thought Yesterday Was Fear? THIS is Fear!
Ok short-side people, my hat is off to you. Just when I thought shouting fire in a locked theater was fear mongering poetry in motion, you went and took it to 11. What's even better? Yelling fire in a theater with only one exit. That way people can cause the financial equivalent of stampede casualties. Absolutely brilliant. Robin Hood disables buying of GME, AMC, and a few of the other WSB favorites. Other brokerages do the same. Even for people on 0% margin. Man, and here I thought I had seen it all yesterday. Side note: I will give a shout out to TD Ameritrade. You guys got erroneously lumped together with RH during an early CNBC segment, but you telegraphed the volatility risk management changes and gradually ramped up margin requirements over the past week. No one on your platform should have been surprised if they were paying attention. And you didn't stop anyone from trading their own money at any point in time. My account balance thanks you. I heard others may have had problems, but I'll give you the benefit of the doubt given the DDOS attacks that were flyiing around Robin Hood. Seriously WTF. I'm sure it was TOTALLY coincidence that your big announcements happen almost precisely when what has to be one of the best and most aggressive short ladder attacks of all time starts painting the tape, what looked like a DDOS attack on Reddit's CDN infrastructure (pretty certain it was the CDN because other stuff got taken out at the same time too), and a flood of bots hit social media (ok, short-side, this last one is getting old). Taking out a large-scale cloud CDN is real big boy stuff though, so I wouldn't entirely rule out nation state type action--those guys are good at sniffing out opportunities to foment social unrest. Anyway, at this point, as the market dives, I have to admit I was worried for a moment. Not that somehow the short-side would win (hah! the long-side whales in the pond know what's up), but that a lot of retail would get hurt in the action. That concern subsided quite a bit on the third halt on that slide. But first... A side lesson on market orders Someone printed bonus bank big time (and someone lost--I feel your pain, whoever you are). During the face-ripping volatility my play money account briefly ascended to rarified heights of 7 figures. It took me a second to realize it, then another second to process it. Then, as soon as it clicked, that one, glorious moment in time was gone. What happened? During the insane chop of the short ladder attack, someone decided to sweep the 29 Jan 21 115 Call contracts, but they couldn't get a grip on the price, which was going coast to coast as IV blew up and the price was being slammed around. So whoever was trying to buy said "F it, MARKET ORDER" (i.e. buy up to $X,XXX,XXX worth of contracts at any price). This is referred to as a sweep if funded to buy all/most of the contracts on offer (HFT shops snipe every contract at each specific price with a shotgun of limit orders, which is far safer, but something only near-market compute resources can do really well). For retail, or old-tech pros, if you want all the contracts quickly, you drop a market order loaded with big bucks and see what you get... BUT, some clever shark had contracts available for the reasonable sum of... $4,400, or something around that. I was too stunned to grab a screencap. The buy market order swept the book clean and ran right into that glorious, nigh-obscene backstop limit. So someone got nearly $440,000 PER CONTRACT that was, at the time theoretically priced at around $15,000. $425,000 loss... PER CONTRACT. Maybe I'm not giving the buyer enough credit.. you can get sniped like that even if you try to do a safety check of the order book first, but, especially in low liquidity environments, if a HFT can peak into your order flow (or maybe just observes a high volume of sweeps occurring), they can end up front running your sweep, pick off the reasonable contracts, and slam a ridiculous limit sell order into place before your order makes it to the exchange. Either way, I hope that sweep wasn't loaded for bear into the millions. If so... OUCH. Someone got cleaned out. So, the lesson here folks... in a super high volatility, low-liquidity market, a market order will just run up the ladder into the first sell order it can find, and some very brutal people will put limit sells like that out there just in case they hit the jackpot. And someone did. If you're on the winning side, great. It can basically bankrupt you if you're on the losing side. My recommendation: Just don't try it. I wouldn't be surprised if really shady shenanigans were involved in this, but no way to know (normally that's crazy-type talk, but after today....peeking at order flow and sniping sweeps is one of the fastest, most financially devastating ways to bleed big long-side players, just sayin'). edit *so while I was too busy trying not to spit out my coffee to grab a screenshot, piddlesthethug was faster on the draw and captured this: https://imgur.com/gallery/RI1WOuu Ok, so I guess my in-the-moment mental math was off by about 10%. Man, that hurts just thinking about the guy who lost on that trade.* Back to the market action..
A Ray of Light Through the Darkness
So I was worried watching the crazy downward movement for two different reasons. On the one hand, I was worried the momentum pros would get the best discounts on the dip (I'll admit, I FOMO'd in too early, unnecessarily raising my cost basis). On the other hand, I was worried for the retail people on Robin Hood who might be bailing out into incredibly steep losses because they had only two options: Watch the slide, or bail. All while dealing with what looked to me like a broad-based cloud CDN outage as they tried to get info from WSB HQ, and wondering if the insta-flood of bot messages were actually real people this time, and that everyone else was bailing on them to leave them holding the bag. But I saw the retail flag flying high on the 3rd market halt (IIRC), and I knew most would be ok. What did I see, you ask? Why, the glorious $211.00 / $5,000 bid/ask spread. WSB Reddit is down? Those crazy mofos give you the finger right on the ticker tape. I've been asked many times in the last few hours about why I was so sure shorts weren't covering on the down move. THIS is how I knew. For sure. It's in the market data itself. editSo, there's feedback in the comments that this is likely more of a technical glitch. Man, at least it was hilarious in the moment. But also now I know maybe not to trust price updates when the spread between orders being posted is so wide. Maybe a technical limitation of TOS I'll admit, I tried to one-up those bros with a 4206.90 limit sell order, but it never made it through. I'm impressed that the HFT guys at the hedge fund must have realized really quickly what a morale booster that kind of thing would have been, and kept a lower backstop ask in place almost continuously from then on I'm sure others tried the same thing. Occasionally $1,000 and other high-dollar asks would peak through from time to time from then on, which told me the long-side HFTs were probably successfully sniping the backstops regularly. So, translating for those of you who found that confusing. First, such a high ask is basically a FU to the short-side (who, as you remember, need to eventually buy shares to cover their short positions). More importantly, as an indicator of retail sentiment, it meant that NO ONE ELSE WAS TRYING TO SELL AT ANY PRICE LOWER THAN $5,000. Absolutely no one was bailing out. I laughed for a minute, then started getting a little worried. Holy cow.. NO retail selling into the fear? How are they resisting that kind of price move?? The answer, as we all know now... they weren't afraid... they weren't even worried. They were F*CKING PISSED. Meanwhile the momentum guys and long-side HFTs keep gobbling up the generously donated shares that the short-side are plowing into their ladder attack. Lots of HFT duels going on as long-side HFTs try to intercept shares meant to travel between short-side HFT accounts for their ladder. You can tell when you see prices like $227.0001 constantly flying across the tape. Retail can't even attempt to enter an order like that--those are for the big boys with privileged low-latency access. The fact that you can even see that on the tape with human eyes is really bad for the short-side people. Why, you ask? Because it means liquidity is drying up, and fast.
The Liquidity Tide is Flowing Out Quickly. Who's Naked (short)?
Market technicals time. I still wish this sub would allow pictures so I could throw up a chart, but I guess a table will do fine.
Date
Volume
Price at US Market Close
Friday, 1/22/21
197,157,196
$65.01
Monday, 1/25/21
177,874,00
$76.79
Tuesday, 1/26/21
178,587,974
$147.98
Wednesday, 1/27/21
93,396,666
$347.51
Thursday, 1/28/21
58,815,805
$193.60
What do I see? I see the shares available to trade dropping so fast that all the near-exchange compute power in the world won't let the short-side HFTs maintain order flow volume for their attacks. Many retail people asking me questions thought today was the heaviest trading. Nope--it was just the craziest. What about the price dropping on Thursday? Is that a sign that the short-side pulled a miracle out and pushed price down against a parabolic move on even less volume than Wednesday? Is the long side running out of capital? Nope. It means the short-side hedge funds are just about finished. But wait, I thought the price needed to be higher for them to be taken out? How is it that price being lower is bad for them? Won't that allow them to cover at a lower price? No, the volume is so low that they can't cover any meaningful fraction of their position without spiking the price parabolic almost instantly. Just not enough shares on offer at reasonable prices (especially when WSB keeps flashing you 6942.00s). It's true, a higher price hurts, but the interest charge for one more day is just noise at this point. The only tick that will REALLY count is the last tick of trading on Friday. In the meantime, the price drop (and watching the sparring in real time) tells me that the long-side whales and their HFT quants are so certain of the squeeze that they're no longer worried AT ALL about whether it will happen, and they aren't even worried at all about retail morale to help carry the water anymore. Instead, they're now really, really worried about how CHEAPLY they can make it happen. They are wondering if they can't edge out just a sliver more alpha out of what will already be a blow-out trade for the history books (probably). You see, to make it happen they just have to keep hoovering up shares. It doesn't matter what those shares cost. If you're certain that the squeeze is now locked in, why push the price up and pay more than you have to? Just keep pressing hard enough to force short-side to keep sending those tasty shares your way, but not so much you move the price. Short-side realizes this and doesn't try to drive price down too aggressively. They can't afford to let price run away, so they have to keep some pressure on at the lowest volume they can manage, but they don't want to push down too hard and give the long-side HFTs too deep of a discount and bleed their ammo out even faster. That dynamic keeps price within a narrow (for GME today, anyway) trading range for the rest of the day into the close. Good plan guys, but those after market people are pushing the price up again. Damnit WSB bros and Euros, you're costing those poor long-side whales their extra 0.0000001% of alpha on this trade just so you can run up your green rockets... See, that's the kind of nonsense that just validates Lee Cooperman's concerns. On a totally unrelated note, I have to say that I appreciate the shift in CNBC's reporting. Much more thoughtful and informed. Just please get a good market technician in there who will be willing to talk about what is going on under the hood if possible. A lot of people watching on the sidelines are far more terrified than they need to be because it all looks random to them. And they're worried that you guys look confused and worried--and if the experts on the news are worried....??! You should be able to find one who has access to the really good data that we retailers can only guess at, who can explain it to us unwashed masses.
Ok, So.. Questions
There is no market justification for this. How can you tell me is this fundamentally sound and not just straight throwing money away irresponsibly??(side note: not that that should matter--if you want to throw your money away why shouldn't you be allowed to?) We're not trading in your securities pricing model. This isn't irrational just because your model says long and short positions are the same thing. The model is not a real market. There is asymmetrical counterparty risk here given the shorts are on the hook for all the money they have, and possibly all the money their brokers have, and possibly anyone with exposure to the broker too! You may want people to trade by the rules you want them to follow. But the rest of us trade in the real market as it is actually implemented. Remember? That's what you tell the retailers who take their accounts to zero. Remember what you told the KBIO short-squeezed people? They had fair warning that short positions carry infinite risk, including more than your initial investment. You guys know this. It's literally part of your job to know this. But-but-the systemic risk!! This is Madness! ...Madness? THIS. IS. THE MARKET!!! *Retail kicks the short-side hedge funds down an infinity loss black hole\*. Ok, seriously though, that is actually a fundamentally sound, and properly profit-driven answer at least as justifiable as the hedge funds' justification for going >100% of float short. If they can be allowed to gamble INFINITE LOSSES because they expect to make profit on the possibility the company goes bankrupt, can't others do the inverse on the possibility the company I don't know.. doesn't go bankrupt and gets a better strategy from the team that created what is now a $43bn market cap company (CHWY) that does exactly some of the things GME needs to do (digital revenue growth) maybe? I mean, I first bought in on that fundamental value thesis in the 30s and then upped my cost basis given the asymmetry of risk in the technical analysis as an obvious no-brainer momentum trade. The squeeze is just, as WSB people might say, tendies raining down from on high as an added bonus. I get that you disagree on the fundamental viability of GME. Great. Isn't that what makes a market? Regarding the consequences of a squeeze, in practice my expectation was maybe at worst some kind of ex-market settlement after liquidation of the funds with exposure to keep things nice and orderly for the rest of the market. I mean, they handled the VW thing somehow right? I see now that I just underestimated elite hedge fund managers though--those guys are so hardcore (I'll explain why I think so a bit lower down). If hedge fund people are so hardcore, how did the retail long side ever have a chance of winning this squeeze trade they're talking about? Because it's an asymmetrical battle once you have short interest cornered. And the risk is also crazily asymmetrical in favor of the long side if short interest is what it is in GME. In fact, the hedge funds essentially cornered themselves without anyone even doing anything. They just dug themselves right in there. Kind of impressive really, in a weird way. What does the short side need to cover? They need the price to be low, and they need to buy shares. How does price move lower? You have to push share volume such that supply overwhelms demand and price therefore goes down (man, I knew econ 101 would come in handy someday). But wait... if you have to sell shares to push the price down.. won't you just undo all your work when you have to buy it back to actually cover? The trick is you have to push price down so hard, so fast, so unpredictably, that you SCARE OTHER PEOPLE into selling their shares too, because they're scared of taking losses. Their sales help push the price down for free! and then you scoop them up at discount price! Also, there are ways to make people scared other than price movement and fear of losses, when you get right down to it. So, you know, you just need to get really, really, really good at making people scared. Remember to add a line item to your budget to make sure you can really do it right. On the other hand.. What does the long side need to do? They need to own as much of the shares as they can get their hands on. And then they need to hold on to them. They can't be weak hands either. They need to be hands that will hold even under the most intense heat of battle, and the immense pressure of mind-numbing fear... they need to be as if they were made of... diamond... (oh wow, maybe those WSB people kind of have a point here). Why does this matter? Because at some point the sell side will eventually run out of shares to borrow. They simply won't be there, because they'll be safely tucked away in the long-side's accounts. Once you run out of shares to borrow and sell, you have no way to move the price anymore. You can't just drop a fat stack--excuse me, I mean suitcase (we're talking hedge fund money here after all)--of Benjamins on the ticker tape directly. Only shares. No more shares, no way to have any direct effect on the price whatsoever. Ok, doesn't that just mean trading stops? Can't you just out-wait the long side then? Well, you could.. until someone on the long side puts 1 share up on a 69420 ask, and an even crazier person actually buys at that price on the last tick on a Friday. Let's just say it gets really bad at that point. Ok.. but how do the retail people actually get paid? Well, to be quite honest, it's entirely up to each of them individually. You've seen the volumes being thrown around the past week+. I guarantee you every single retailer out there could have printed money multiple times trading that flow. If they choose to, and time it well. Or they could lose it all--this is the market. Some of them apparently seem to have some plan, or an implicit trust in certain individuals to help them know when to punch out. Maybe it works out, but maybe not. There will be financial casualties on the field for sure--this is the bare-knuckled capitalist jungle after all, remember? But everyone ponied up to the table with their own money somehow, so they all get to play in the big leagues just like everyone else. In theory, anyway. And now, Probably the #1 question I've been asked on all of these posts has been: So what happens next? Do we get the infinity squeeze? Do the hedge funds go down? Great questions. I don't know. No one does. That's what I've said every time, but I get that's a frustrating answer, so I'll write a bit more and speculate further. Please again understand these are my opinions with a degree of speculation I wouldn't normally put in a post.
The Market and the Economy. Main Street, Wall Street, and Washington
The pandemic has hurt so many people that it's hard to comprehend. Honestly, I don't even pretend to be able to. I have been crazy fortunate enough to almost not be affected at all. Honestly, it is a little unnerving to me how great the disconnect is between people who are doing fine (or better than fine, looking at my IRA) versus the people who are on the opposite side of the ever-widening divide that, let's be honest, has been growing wider since long before the pandemic. People on the other side--who have been told they cannot work even if they want to, who wonder if congress will get it together to at least keep them from getting thrown out of their house if they have to keep taking one for the team for the good of all, are wondering if they're even living in the same reality. Because all they see on the news each day is that the stock market is at record highs, or some amazing tech stocks have 10x'd in the last 6 months. How can that be happening during a pandemic? Because The Market is not The Economy. The Market looks forward to that brighter future that Economy types just need to wait for. Don't worry--it'll be here sometime before the end of the year. We think. We're making money on that assumption right now, anyway. Oh, by the way, if you're in The Market, you get to get richer as a minor, unearned side-effect of the solutions our governments have come up with to fight the pandemic. Wow. That sounds amazing. How do I get to part of that world? Retail fintech, baby. Physical assets like real estate might be a bit out of reach at the moment, but stocks will do. I can even buy fractional shares of BRK/A LOL. Finally, I can trade for my own slice of heaven, watching that balance go up (and up--go stonks!!). Now I too get to dream the dream. I get to feel connected to that mythical world, The Market, rather than being stuck in the plain old Economy. Sure, I might blow up my account, but that's because it's the jungle. Bare-knuckled, big league capitalism going on right here, and at least I get to show up an put my shares on the table with everyone else. At least I'm playing the same game. Everyone has to start somewhere--at least now I get to start, even if I have to learn my lesson by zeroing my account a few times. I've basically had to deal with what felt like my life zeroing out a few times before. This is number on a screen going to 0 is nothing. Laugh or cry, right? I'll post my losses on WSB and at least get some laughs. Geez, some of the people here are making bank. I better learn from them and see if they'll let me in on their trades. Wow... this actually might work. I don't understand yet, but I trust these guys telling me to hold onto this crazy trade. I don't understand it, but all the memes say it's going to be big. ...WOW... I can pay off my credit card with this number. Do I punch out now? No? Hold?... Ok, getting nervous watching the number go down but I trust you freaks. We're still in the jungle, but at least I'm in with with my posse now. Market open tomorrow--we ride the rocket baby! And if it goes down, at least I'm going down with my crew. At least if that happens the memes will be so hilarious I'll forget to cry. Wow.. I can't believe it... we might actually pull this off. Laugh at us now, "pros"! We're in The Market now, and Market rules tell us what is going to happen. We're getting all that hedge fund money Right? Right? Maybe. First, I say maybe because nothing is ever guaranteed until it clears. Secondly, because the rules of The Market are not as perfectly enforced as we would like to assume. We are also finding out they may not be perfectly fair. The Market most experts are willing to talk about is really more like the ideal The Market is supposed to be. This is the version of the market I make my trading decisions in. However, the Real Market gets strange and unpredictable at the edges, when things are taken to extremes, or rules are pushed beyond the breaking point, or some of the mechanics deep in the guts of the Real Market get stretched. GME ticks basically all of those boxes, which is why so many people are getting nervous (aside from the crazy money they might lose). It's also important to remember that the sheer amount of money flowing through the market has distorting power unto itself. Because it's money, and people really, really, really like their money--especially when they're used to having a lot of it, and rules involving that kind of money tend to look more... flexible, shall we say. Ok, back to GME. If this situation with GME is allowed to play out to its conclusion in The Market, we'll see what happens. I think all the long-side people get the chance to be paid (what, I'm not sure--and remember, you have to actually sell your position at some point or it's all still just numbers on your screen), but no one knows for certain. But this might legitimately get so big that it spills out of The Market and back into The Economy. Geez, and here I thought the point of all of this was so that we all get to make so much money we wouldn't ever have to think and worry about that thing again. Unfortunately, while he's kind of a buzzkill, Thomas Petterfy has a point. This could be a serious problem. It might blow out The Market, which will definitely crap on The Economy, which as we all know from hard experience, will seriously crush Main Street. If it's that big a deal, we may even need Washington to be involved. Once that happens, who knows what to expect.. this kind of scenario being possible is why I've been saying I have no idea how this ends, and no one else does either. How did we end up in this ridiculous situation? From GAMESTOP?? And it's not Retail's fault the situation is what it is.. why is everyone telling US that we need to back down to save The Market?? What about the short-side hedge funds that slammed that risk into the system to begin with?? We're just playing by the rules of The Market!! Well, here are my thoughts, opinions, and some even further speculation... This may be total fantasy land stuff here, but since I keep getting asked I'll share anyway. Just keep that disclaimer in mind.
A Study in Big Finance Power Moves: If you owe the bank $10,000, it's your problem...
What happens when you owe money you have no way to pay back? It's a scary question to have to face personally. Still, on balance and on average, if you're fortunate enough to have access to credit the borrowing is a risk that is worth taking (especially if you're reasonably careful). Lenders can take a risk loaning you money, you take a risk by borrowing in order to do something now that you would otherwise have had to wait a long time or maybe would never have realistically been able to do otherwise. Sometimes it doesn't work out. Sometimes it's due to reasons totally beyond your control. In any case, if you find yourself there you have no choice but to dust yourself off, pick yourself up as best as you can, and try to move on and rebuild. A lot of people had to learn that in 2008. Man that year really sucked. Wall street learned their lessons too. Most learned what I think most of us would consider the right lessons--lessons about risk management, and the need to guard vigilantly against systemic risk, concentration of risk through excess concentration of leverage on common assets, etc. Many suspect that at least a few others may have learned an entirely different set of, shall we say, unhealthy lessons. Also, to try to be completely fair, maybe managing other peoples' money on 10x+ leverage comes with a kind of pressure that just clouds your judgement. I could actually, genuinely buy that. I know I make mistakes under pressure even when I'm trading risk capital I could totally lose with no real consequence. Whatever the motive, here's my read on what's happening: First, remember that as much fun as WSB are making of the short-side hedge fund guys right now, those guys are smart. Scary smart. Keep that in mind. Next, let's put ourselves in their shoes. If you're a high-alpha hedge fund manager slinging trades on a $20bn 10x leveraged to 200bn portfolio, get caught in a bad situation, and are down mark-to-market several hundred million.. what do you do? Do you take your losses and try again next time? Hell no. You're elite. You don't realize losses--you double down--you can still save this trade no sweat. But what if that doesn't work out so well and you're in the hole >$2bn? Obvious double down. Need you ask? I'm net up on the rest of my positions (of course), and the momentum when this thing makes its mean reversion move will be so hot you can almost taste the alpha from here. Speaking of momentum, imagine the move if your friends on TV start hyping the story harder! Genius! Ok, so that still didn't work... this is now a frigging 7 sigma departure from your modeled risk, and you're now locked into a situation that is about as close to mathematically impossible to escape as you can get in the real world, and quickly converging on infinite downside. Holy crap. The fund might be liquidated by your prime broker by tomorrow morning--and man, even the broker is freaking out. F'in Elon Musk and his twitter! You're cancelling your advance booking on his rocket ship to Mars first thing tomorrow... Ok, focus--this might legit impact your total annual return. You need a plan, and you know the smartest people on the planet, right? The masters of the universe! Awesome--they've even seen this kind of thing before and still have the playbook!! Of course! It's obvious now--you borrow a few more billion and double down again first thing in the morning. So simple. Sticky note that Mars trip cancellation so you don't forget. Ok... so that didn't work? You even cashed in some pretty heavy chits too. Ah well, that was a long shot anyway. So where were you? Oh yeah.. if shenanigans don't work, skip to page 10... ...Which says, of course, to double down again. Anyone even keeping track anymore? Oh, S3 says it's $40bn and we're going parabolic? Man, that chart gives me goosebumps. All according to plan... So what happens tomorrow? One possible outcome of PURE FANTASTIC SPECULATION... End of the week--phew. Never though it'd come. Where are you at now?... Over $9000\)!!! Wow. You did it boys, and as a bonus the memes will be so sweet. \)side note: add 8 zeros to the end... Awesome--your problems have been solved. Because... .. BOOM Now it's EVERYONE's problem. Come at me, Chamath, THIS is REAL baller shit. Now all you gotta do is make all the hysterical retirees watching their IRAs hanging in the balance blame those WSB kids. Hahaha. Boomers, amirite? hate when those kids step on their law--I mean IRAs. GG guys, keep you memes. THAT is how it's done. Ok, but seriously, I hope that's not how it ends. I guess we just take it day by day at this point. Apologies for the length. Good luck in the market! Also, apologies in advance for formatting, spelling, and grammatical errors. I was typing this thing in between doing all kinds of other things for most of the day. Edit getting a bunch of questions on if it's possible the hedge funds are finding ways to cover in spite of my assumptions. Of course. I'm a retail guy trying to read the charts and price action. I don't have any special tools like the pros may have.
The Next GME: A Conclusive, Systematic Analysis To Determine Today’s SINGLE BEST Short Squeeze Opportunity
A bit of background first to afford some credibility to what I go on to explain: I haven’t been a Redditer for long. I majored in mathematics (think the likes of stochastic calculus and the Brownian motion), have been working in ‘high finance’ for all of my professional career, and have been trading the markets for over six years. I only joined Reddit a couple of days back to better understand what drove the GME story after being late to that rally, and with the sole purpose of finding out if there is still an opportunity for me (and the thousands of others out there who missed out on the GME glory run) that can be turn into cash in the bank. After understanding the mechanics of what drove GME, armed with the hitherto-unprecedented knowledge that a retail investor base can in fact bring hedge funds down to their knees in the very specific context of a short squeeze trade under the right circumstances, I decided to start from scratch and scour the US market for the best short squeeze opportunity out there NOW (01 Feb 21) without any bias towards any particular stock as I held nothing at this point and was on an unadulterated quest for the true best short squeeze trade - it could be GME, it could be AMC, or it could be something unheard of Using data from short side analytics subscription services, I started off by compiling a list of the top 50 names in the entire US market with the largest short interest. All the information I used is publicly available and I am not breaching any obligation or regulation if I present the data in a summarised format as I have below. To keep it this way, I will refrain from sharing longer spreadsheets of raw data or revealing the specifics around the specific data sources used. Rest assured, the data hasn’t been tampered with to serve an ulterior motive as
I have none
I’m pretty sure that’d amount to market manipulation which is a criminal and possibly jail-able offence
Some important points to note here:
Collecting and processing short-side statistics is not a hard science. Commonly used metrics like SI, DTC, utilisation, fees etc can vary depending on the sources of the underlying data. It would be worth noting that primarily, there are two types of short-side data viz. exchange-driven data which is based on the number of shorts traded in the market and lender-driven data which is based around quantifiable characteristics about the securities that are borrowed to facilitate said short. Since naked shorting is banned, the two are theoretically equivalent but in practice some differences are seen. This is also the reason that short-side data, which is critical to identifying short squeezing opportunities, is almost never real-time and the most reliable data, from my experience, has at least a one day lag.
Other things being equal, it is easier for a retail investor base to squeeze a short on a company with a smaller market cap than one with a larger market cap for the very simple reason that the former calls for a smaller investment outlay than the latter
The metrics:
Short float: This is the total number of a company’s shares that are traded short, commonly estimated by the number of shares being lent out
Short interest (SI): This is the short float as a percentage of a company’s free float and is one of the most important indicators of how heavily a company is shorted. The higher the SI, the more heavily the company is shorted
Utilisation: The only difference between SI and util is that the denominator of the latter is the number of lendable shares which in practice can be different (less than) the free float of a company
Days to cover (DTC): This is the company’s short float as a proportion of its recent volume, usually trailing 30 days ADTV (Average Daily Trading Volume). Other things being equal, the higher the DTC, the more difficult it would be for a short seller to cover their short without raising the price significantly (which in turn makes a short cover more painful i.e. expensive for the shorting party) - this is also coincidentally an explanation of what a short squeeze is for those who care
Borrow fee: Fees paid to borrow a security. The higher the fee, the more in-demand is a security’s borrow for directional (shorting) or arbitrage trading purposes
I built a squeeze metric which summarises much of the aforementioned data into one number which I then normalised into Z-scores making up my Squeeze scale. The higher a name ranks on this list, the more practical and compelling of a short squeezing opportunity it presents. Below (or attached titled, “Start of 2021”) are the top 10 names from the list as of the start of 2021. Short squeeze scale at the start of 2021 (higher the 'better') Many familiar names feature here, including our hero, GME. Also notice NAKD being in pole position although the short interest at this stage is not high enough to classify it as an easy-win that GME appears to be with its 90% + SI at this stage. Remember that I mentioned that processing short-side statistics is not a hard science and subject to multiple interpretations? Knowing this, I ran multiple iterations of the squeeze multiplier calculation after making a host of justifiable adjustments but to my surprise, it came up as THE best short squeezing opportunity at the start of the year despite its lower SI compared to its competition on the list - Why? Because of that tiny market cap. This again is quantifiable evidence especially for retail investor bases that the market cap of a stock makes a world of difference in terms of its allure as a short-squeeze trade. Now that we have some hindsight perspective, I ran the exact same model to answer our golden question: What is the CURRENT best short squeezing opportunity? The analysis is as of this weekend so some of the numbers below are as of 29 Jan 2021. However, this was refreshed thereafter and the results are unchanged (below/attached titled, “Current”): Current Short Squeeze Scale (Higher the 'better') Now, NAKD US has my full attention as should be the case for all of you by this point. You’ll also notice that GME has dropped off the top 10 list now (it is still in the top 25) because its market cap has burgeoned and short interest has tapered off palpably (on the back of Melvin and others covering their shorts in part at least), making better candidate-companies for short squeezing trades for those who don’t already have a position in GME or have taken profits (or losses) from GME. This already made a compelling case for NAKD but I wanted to be 100% certain that this is the BEST short-squeeze opportunity out there on the back of my analysis so did some additional work to come up with this (below/attached, titled “Charts”): Charts For this, I decided to compare the winner of our test, NAKD, a name that we recognise a symbol for what is probably the history’s first retail short squeeze success, i.e. GME, and the runner up of the above test, ATOS, for good measure. What GME had going for it was a lethal combination of high DTC and high SI, both of which have now tapered off - not to make it a bad trade but less alluring to alternatives now, chiefly NAKD, especially given GME’s high price. Sure, it could rise to $1,000 but would you rather make a 3X on GME now or a much easier to attain 9X on NAKD with it going to a paltry mid teen number? It was at this point that i jumped on Reddit to check if there was a following for this stock and sure enough there was a small but budding one (do join the sub-Reddit https://www.reddit.com/nakd/ - I will try posting this on multiple sub-Reddits to the extent that my karma allows me to). If I were fortunate enough to have made money on GME, I would use my profits from GME on the new GME that is NAKD now rather than try squeeze more out of GME. I must stress that this is not to undermine the efforts of our brothers on the GME frontline for whom i have great respect but is merely a rationalisation of what makes a fine short squeeze opportunity right now independent of other positions and also relative to its peers. My DTC data for NAKD is incorrect in the above chart so I added more accurate estimates from reverse calculations from the SI for the last three days. In terms of SI and price action, NAKD is now where GME was from early December 2020 up to around 20 Jan 2021. I would estimate that it could take anywhere between 1-3 weeks of continued, dedicated, diamond-hand buying and holding (the more done early on, the shorter that wait time will be) before this ripens into GME-like results. With regards to the c. 30M shares new offering in this name and concerns around how much this can dilute the price and SI: Normally, I would worry about the dilutive effects here but in this case, this is a direct offering so no new shares are created and in any case, it is too small to make a meaningful impact on the short float (even if there were new shares coming to the market, the estimated SI drop would be under 6%). It does mean that up to 30M additional shares can enter the lending pool allowing hedge funds to borrow up to another 30M shares that we might need to hold up against so may see a few more flat to down days like we did today but again, this is just 6% of SI and does not have any material impact on the short squeeze thesis here, in my opinion. If we continue to pile on the buying pressure (especially if liquidity remains low like it was today), NAKD will be a sure shot repeat of GME with no escape for the hedge funds shorting this name. All that is needed now is for more people to realise this to give it the momentum it needs to take it from being merely this ‘sure-shot’ as long as the aforementioned conditions hold to a position where we basically decide the price at which the hedge funds buy this back - then you’re talking your $15 or $50 or $100 or higher. KNOWLEDGE IS POWER - if this makes sense to you, please help me spread the word! This is an analysis purely from a short-squeeze angle but i know there is some fundamental analysis as well out there from some trustworthy sources to warrant an encouraging valuation if the above is not compelling enough. Now for the disclaimers: I am not a financial adviser and this is not financial advice. All of this is my personal opinion and encourage you to conduct your run your own due diligence before making any investment decision. Your capital is at risk but in my opinion, so is the risk of losing a once in a lifetime opportunity that buying NAKD presents now to realise the financial freedom that for me anyway would take years if not decades to achieve through conventional means. I wouldn’t have put my hard-earned money from over the years into this without doing all of the above as rigorously as I did and if i didn’t believe in the unbiased results that were found. I am doing this so that I can provide for my sibling who works an intolerably strenuous job involving a 5 hour commute every day and so that i can buy my parents a house worthy of being called their residence and I am sure you have similar aspirations as well. This is the stock market in which there is no such thing as a guarantee but this is quite possibly the closest thing we, as retail investors, can get to a guarantee if we unite and work towards a shared objective. he numbers speak for themselves so hey get out there and do what you have to do - feel free to share and re-post any of the above with whoever and wherever you please. I am not asking for any upvotes - all I want is for this to work for us all. #YOLO #NAKD #DD
Gamestop Big Picture: Technical Recap - 1/25 - 1/29
Disclaimer: I am not a financial advisor. This entire post represents my personal views and opinions, and should not be taken as financial advice (or advice of any kind whatsoever). I encourage you to do your own research, take anything I write with a grain of salt, and hold me accountable for any mistakes you may catch. Also, full disclosure, I hold a net long position in GME, but my cost basis is very low, and I'm using money I can absolutely lose. My capital at risk and tolerance for risk generally is likely substantially different than yours. Wow, what a week. All I'll say on that for now. I'll maybe do a recap of Friday at some point this weekend if I can. For this post, rather than a narrative recap, I'll go into some very light technical analysis on a couple of screenshots from TD Ameritrade Thinkorswim and Ortex. I don't have a lot of time to go very deep into everything I normally do, but I wanted to give the newer traders an example of how I go about coming to some of my conclusions. Some of the conclusions I came to in the heat of the moment in my previous posts may also not stand up to more rigorous scrutiny of the data. In my opinion, at least, it's very important to ensure that you go back and review any of your high conviction trades from time to time. Please feel free to use the charts I'll show to challenge some of the assumptions I may have made and written about while watching the live ticker tape action, social media, and other high-frequency sentiment indicators (things I might rely on for a hyper-realtime momentum monster trade like GME has been this past week). Maybe use them to challenge your own thoughts and assumptions as well. I realized while doing this that writing those prior articles probably cost me ~$300k in momentum trade opportunity LOL, since I used all of my free non-trading hour time to write instead of do an even more in-depth version of what I'm going to show you now. That being said, if that writing helped any of you understand what was going on, and ultimately progress on your way to becoming better traders and investors, that to me is well worth it--maybe one day you too can pay it forward! If any of you reading this are chart jockeys, please share some tips if you have them. First, the charts (links since pics aren't allowed on this sub)
First, lots of questions on the prior post about Short Interest remaining on GME so I'll start with this one. Looks good to me. I think Ortex will update end of trading Friday data just before/around Monday market open. I consider this chart to convey mostly fundamental data, as the underlying value thesis behind the recent push by retail traders has at least recently been about the squeeze. This is the type of data you'd use to try to analyze data about the security being traded. Note that most pro traders would not consider short interest to be a 'fundamental ' attribute, and normally I'd agree, but I think GME and maybe some of the other high SI plays are an exception to that. If any of you are inclined to feel jumpy about the diving lines on the chart, make sure to look at the axis values on the left. The chart is calibrated to capture the movement over the period, so the bottom of the axes are not 0. A few things to note:
Short interest drops substantially from 1/26 into 1/27
Volume is shrinking
Remaining free float on loan has gone down, but at 66% as of Thursday, is still quite high
Overview - Daily Chart & Summary of the Week
A few things going on here
The big volume days on Friday, Monday, and Tuesday are when it seems to me that the greatest retail momentum would have occurred. The battles were pretty intense at key price points if you take a closer look at those intra-day charts.
Big picture here, what it tells me is that many if not most of the retail share volume was acquired at or below $148 on huge volume. That means the core of your retail support, and the majority of shares in WSB diamond hands would have been bought probably between the $30 and $148 price range. My guess is that Only DFV the DFV early acolytes, Dr. Burry, and the institutional holders have meaningful volume below $30.
Given points 1 and 2, I'd consider the $148 price level as the critical defense level of your earliest, hardest retail support. You can dive deeper into the 1/26 trading day and possibly make a case for other levels as well, but I'll roll with that for now.
Ok, so maybe the Melvin guys weren't really lying. The Ortex data showing short interest drop from 1/26 to 1/27 coinciding with the massive and sudden price dislocation upward on 1/27.
If new shorts entered the game it would have been near the highs, possibly selling into the forced buying of what I'll just assume was the overnight Melvin squeeze and into the early market hours on 1/28. Possibly aggressive momentum shorting on top of the Robin Hood BS, the bots, and the networking issues came together in a perfect storm with that HFT ladder attack on the vertical dive. Wow--no wonder that thing was so intense.
As you can see on that downside wick on 1/28, the huge momentum briefly pierced the Retail line before being slammed back up. We'll take a closer look in the fibonacci chart.
Analysis - Mini Squeeze Hourly
Just a few notes. I checked and the after hours volume here was sudden, quite unusual, and pretty consistent with a forced liquidation of a substantial position. Rather than slamming it all out at once, the broker spread it out quite a bit. Some takeaways:
If you wanted to take money from Melvin, this was the chance, and a lot of people (or a few whales) certainly did. The numbers in my summary were very quick mental math of the hourly volumes in overnight trading
The price didn't break away as aggressively as it probably could have, which means there was some carefully calibrated pre-planning to unload a bunch of shares, laddering up to the $350 level.
I am genuinely sorry to have to conclude, therefore, that the WSB bros with the $420.00 limit got scooped. Something on the order of 17 million shares worth of Melvin dollars got cashed out under them by a HFT whale with access to firehose shares at Melvin's broker all the way through overnight trading. few retail even have the ability to trade for that entire window, and certainly not on the order of 17 million shares anyway.
Another important takeaway: 17 million shares is a lot, but it's nowhere near the entire original SI in GME. The Game hasn't necessarily Stopped yet (heh).
Technical Analysis - 1/28 to 1/29 Fibonacci Retracement
For those of you who are unfamiliar with what traders call "technical analysis", it's really just a fancy set of words to say looking at squiggly lines, bars, etc. on charts to try to figure out what's going on. One particularly popular tool is called a fibonacci retracement. It sounds a lot fancier than it is, but it is extremely useful, and extremely commonly used by momentum traders (which is partly why it's useful--if everyone is trading off of the same thing, it's a self-reinforcing bias in the market). There is a lot of background reading you can do on the topic--I recommend it. You'll be a better trader and even investor for it, as it tends to be useful even on longer timeframe charts. Kind of uncanny really. Looking at this chart I realize I probably should have plotted the 'retail line of defense' here too. Oh well, maybe next time. Takeaways:
I figured the relevant trading range going forward was peak euphoria to peak despair in regular trading on relatively good volume. That happened to be the top to bottom move on the Robin Hood news.
Using that for the fibonacci retracement, you can see how much of the trading action bounces around between the various levels before settling in scarily accurately into the 50% - 61.8% channel in after hours trading.
it's quite possible that short-term equilibrium on this battleground stock is $300 to $350 until either side makes a strong push. Price was trapped in that range toward the end of normal trading on relatively good volume.
Probably a bunch of momentum traders drew exactly this retracement (or something very similar) for their rest of day trading after the floor got put in near the retail line of defense. In all honesty it's hard to say if the tool works because of some fundamental reason or because everyone uses it so everyone times their momentum plays off the same playbook, making it self-reinforcing. All that matters in the end is that it works pretty consistently once you get used to working with it.
Below the price graph, pay attention to the volume bars below. It's especially critical when trading momentum to understand the relationship between share volume and price, as there are patterns that are more likely to play out depending on the relationship. For example, when price is moving around a lot, is it doing so on high volume or not much volume?
Traders tend to overshoot a little on each push, so even if price ultimately drops lower after an upside spike, if the volume on that drop is low compared to the upward push, that actually tells you that it's likely to go higher a little later on. There are many sites that go more in depth into this kind of thing (patterns, volume and price analysis, etc.), and it is incredibly useful to try to understand what to take away from price and volume movement as you watch it unfold live.
Lots more going on here, but this post is getting pretty long already.
Other Takeaways
The whales in the pond obviously do their homework (that's how they got to be that big, after all), and they were therefore prepared to act decisively to unload 17 million shares at the upper end of the trading range when Melvin got blown up. That's how you make big bank on big volume--do your homework.
My thesis in the part 2 article that the big early drop before retail pre-market was a short-side scare tactic could very well be totally wrong. You could make a case either way that it was a new short-side player diving in at a higher price point, a long-side whale making bank, or a combo of both. if you check the Ortex data against the numbers here you can probably come up with an order of magnitude educated estimate. If so, apologies to the CNBC Squawk Box crew--probably no factual inaccuracies in your reporting (though the tone did make a lot of retail panic)
Ironically, it might very well have been the continued unwinding of Melvin's short position that intercepted the panic drop into premarket rather than a long-side heavy hitter. LOL.
Thursday afternoon and Friday were low volume, low-conviction momentum sloshing around. Dueling HFT algos and momentum traders trying to scalp alpha from each other is my guess.
Contract expiration may cause a price dislocation into the new trading week, so I'm not sure the fibonacci retracement chart is still useful.
I'm sure if I go back over my previous articles and compare to the chart data more carefully I'll find all kinds of other inconsistencies with my realtime thoughts. It's key when trading, at least in my opinion, that you are willing, able, and indeed eager to go back and rethink your assumptions, no matter how much you liked them. Challenge and verify with data whenever possible. Not doing that is how Melvin got blown up, after all.
My worst case scenario thesis in the part 3 article may still be valid depending on the total amount of short interest loading up into GME at these newer highs. I remember hearing some fund manager talking about shorting GME at the $400 as a stabilization mechanism. Wow.. short something with the most hyper volatility of any $1bn+ stock I've ever heard of... for stability. That's not a word I'd ever associate with a WSB meme momentum rollercoaster stock.
An infinity squeeze is still totally on the table, as long as sufficient short interest remains. The strategy and tactics you'd use to get there may have to be different though, as price ratchets up into higher bands. I'll keep those thoughts to myself--for sure those WSB guys have a plan. They've proven to be scary effective so far after all.
There are other things you can take away, or theses you can come up with from these and other charts you may have access to. Hopefully, for you newer traders I've given you a useful glimpse into how I might try to use readily available data to improve/challenge/refine a working thesis to ensure I'm better prepared for the days ahead. You should find the tools that seem to work best for you. Hope you all have a good weekend. See you on the field on Monday.
DDDD - How r/wallstreetbets Created a Financial Weapon of Mass Destruction
Inspired by the recent events in wallstreetbets causing $GME, $BB, and $BBRY, among other historically highly shorted stocks to surge just to spite some rich people in wall street, I've decided to come out of retirement from wallstreetbets and publish a new edition of DDDD (Data-Driven DD) covering the exact mechanics that made this possible. I’ll also introduce those of you that are unfamiliar how wallstreetbet’s favorite gambling device, stock options, actually work and how they can be used by this subreddit as a weapon of mass destruction against hedge funds like Melvin - all dumbed down to a fifth grade reading level so that the average person in this subreddit will mostly understand what I’m talking about. Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance.
Shorting
How It Works Most traditional (i.e. boomer) investors usually try to make money by going long - i.e. “buy low and sell high”; this is when you buy a stock thinking it will go up in the future (bullish). Shorting is the opposite of this, you “sell high and buy low”, thinking the stock will go down in the future (bearish). This is usually done through the broker, where the prospective short seller would “borrow” the shares from them, and they would need to pay back these shares in some future date by “covering their shorts” - or buying back the exact same quantity of shares they owe the broker. For example, imagine that there were only 10 Surprised Pikachu Pokemon cards in the world. Because nobody wants to deal with taking physical possession of these cards and risk losing their Pokemon card in their laundry or something, everyone pays a Pokemon card dealer a small fee to store it for them. Through their dealer, you can buy and sell these Pokemon cards as well. A 🌈🐻 realizes that maybe Pokemon cards are dumb and borrows 2 Surprised Pikachu cards (who has a prearranged agreement with some institutional Pokemon card hoarder to loan them out for interest) and sell them for $420 each, thinking that they're actually work $100 at most, and plans to buy the Pokemon cards back at that price to repay his Pokemon card loan (i.e. covering their shorts) - this is a short sale. Since no one actually wants to physically hold these Pokemon cards, these cards physically stay with the dealer who could then lend out these exact same Pokemon card if the buyer also has an agreement to allow them to do so. This means that you can actually have people owing more than the total number of Surprised Pikachu Pokemon cards in existence (i.e. short interest > 100%). Replace “Surprised Pikachu Pokemon card” with stocks and “Pokemon card dealer” with “broker” and you have a short sale of shares. Interestingly enough, this also applies 80% to how banks work as well. Short Squeezes So when does a short seller need to cover their shorts? Well, either when a) The short seller wants to, either to take profit or to stop a loss, b) Their broker forces them to through a margin call, or c) The broker forces them to as the broker has recalled their loan, usually for a hard to borrow stock - they get “bought in”. Today, we’ll focus on C) because this is how short squeezes happen. So, what does a broker recalling their loan mean? Well, to go back to the Pokemon card example, imagine that the dealer only has 6 Surprised Pikachu Pokemon cards that he’s legally allowed to loan out. Some more 🌈🐻 short sells all the 6 remaining Pokemon cards until the dealer has no more available on hand. So what happens when someone wants to buy a Surprised Pikachu Pokemon Card and doesn’t want the dealer to lend out their cards? He’ll have to force one of those 🌈🐻 to buy back the card that they owe them so the dealer can give it to the prospective buyer. But who can the 🌈🐻 buy back the card from? The dealer. But the dealer doesn’t have any cards to sell, so they need to force another 🌈🐻 to cover so that the former 🌈🐻 can cover their shorts. This vicious cycle repeats and leads towards a sudden surge in demand for Surprised Pikachu Pokemon cards and a spike in prices for it - a short squeeze. The Institutional Factor One thing alluded above was that shares can only be borrowed from *some* share holders, but not all. So who exactly can and does a broker typically borrow these shares from? These are usually margin accounts of either institutional and sometimes (although much less frequently) retail investors. Usually, when an entity signs a margin agreement, which allows them to borrow either cash or shares from the broker, they give permission to the broker to also lend out their shares in the process, and thereby also give up their voting rights - in case you’ve ever wondered who actually the share *actually* belonged to in shareholders meetings. Since almost every institution except Warren Buffet uses margin to a certain extent, and not that many retail investors do, especially given that retirement accounts are forbidden to use margin, and it’s much easier to “find” one big source of TSLA shares from one big institution with a margin account rather than find thousands of smaller margin retail accounts who hold TSLA shares, so most of the time, these shares are being borrowed from an institution (i.e. pension fund, hedge fund). This means that shares that are almost disproportionately held by retail investors are much harder to short because they’re harder to borrow from the broker, and retail-heavy stocks like HTZ, GME, NIO, and NKLA, which virtually no institutions actually hold, will demand high interest rates when shorting and the sellers can much more easily be forced to cover during a short squeeze.
Stock Options
What are Stock Options A stock option is a contract between the writer and whoever holds it that gives the option holder the right to buy (call option) or sell (put option) 100 shares of the underlying stock on or before the expiry date at a specified strike price. So for example, buying a GME 1/29 $1000c gives whoever the holder of this contract is the option to buy from the writer of this contract 100 shares of GME at $1000 / share on or before 1/29. Obviously if GME is lower than $1000 before that date, the holder would be an idiot to exercise this option to buy GME shares for more than their current market value, so they expire worthless. This effectively provides the option holder an immense amount of leverage, and provides the opportunity for them to 10x or even 100x their original investment if the underlying asset moves the right way - for example because a subreddit declares war on a hedge fund and pumps up a stock to make them go bankrupt, while limiting their losses to the cost of the option. The option writer will in return receive a premium for the option, potentially risking an infinite amount of money, but with a high likelihood of making a small profit. These writers would either be
Theta gang - who are looking to generate a tidy income source from those option premiums and pray that the stock doesn’t move in the wrong direction too much
A market maker - who writes the contract when they see an arbitrage opportunity between the market value of an option and the theoretical value of it, and hedging their contract they wrote by buying / shorting the underlying assets so they effectively don’t actually take a position in the market.
We’ll go over how 2) works and how this mechanism can be used as a financial nuclear bomb, but first you need to learn some greek. The Greeks The greeks in finance is a set of factors that can affect the price of a stock option / group of options Delta - Change of the option price as the stock price changes Gamma - Change in Delta as the stock price changes Vega - Change in the option price as volatility of the stock changes Theta - The decay in the option price as the expiration date gets nearer Rho - Change of the option price as the interest rate changes; Most people ignore this Looking at the greeks of the gambling tickets you buy is very useful to analyzing the ways you can make or lose money on them. Think TSLA will go up a modest amount? Buy a high-Delta call. Think GME is going to 🚀🚀🚀 1000% more? Look for a high Gamma call so your Delta gains accelerate as GME 🚀🌕. Do you feel like a vampire and want to have a steady income source from degenerate wallstreetbet gamblers on a stock you think will go flat (relative to historical volatility) over the next few months? Join theta gang and sell a high-Theta and high-Vega option! Market Makers The Black-Scholes model is a fancy mathematical model that describes a “perfect price” (a lot of caveats here) for a stock option. This is done by showing how every option written can theoretically be perfectly hedged by a series of purchases or short sells on the underlying stock. This means that theoretically, if there is a large gap between the theoretical price from Black Scholes and the actual price for an option, there is an “arbitrage” opportunity - this is where market makers come in. Market makers are companies that provide liquidity to a market by offering to be counterparty to trades. This is especially useful in stock options, where a single ticker can have thousands of options, and there might be someone who wants to buy a GME 1/29 $1000c but no one is actually actively selling it. However, this option might be listed anyways and Citadel will sell you the call if anyone tries to buy it and then immediately hedge it. In fact, when you buy an option chances are you’re not actually buying it from its previous owner selling an option they already own, but from a market maker like Citadel (who is responsible for over 99% of all options volume in 3000 stocks). So what happens when someone buys an option from a market maker? Since the market maker typically can’t (and probably don’t want to) take a position, meaning taking a directional bet if a stock goes up or down, they’ll immediately hedge the option they just conjured out of thin air by buying or shorting the equivalent number of shares such that the Delta of those shares is the same as the Delta of the option they wrote to remain Delta-neutral, so if the stock goes up or down their position value doesn’t change - this is called Delta hedging. Furthermore, as the stock price moves up (calls) or down (puts), they’ll need to buy or sell even more of those shares to remain Delta neutral since the Delta will change due to the option’s Gamma - this is called Gamma hedging.
Putting It All Together - How options can be used as weapons of mass destruction against short sellers
Now we have the tools to understand how these two financial concepts put together can make billion-dollar hedge funds go bankrupt. Through Delta and Gamma hedging of market makers, buyers can have the effect of buying shares dozens of times the value they actually spent buying their option; a XYZ 4/20 690c can cost only $100 in premiums but causes the market maker to buy $2000 in the underlying stock to hedge against it. If you get enough retail investors to do this, they'll have the impact of billion-dollar whales on the market despite their small stimulus-check-funded portfolios. Now, you do this on a stock that is heavily shorted, and with very little institutions actually holding real shares of these - making it harder for brokers to find shares to borrow, and you have yourself a weapon of mass financial destruction capable of making billions of Melvin’s money disappear in a single day and potentially have GME 🚀🚀🚀 to a trillion dollar market cap. HowwallstreetbetsControls the Stock Market The one thing that’s interesting about all of this is wallstreebet’s unique position in being able to facilitate this weapon of mass financial destruction because
Most rich people or institutions too risk adverse to buy large amounts of out of the money options (unless you're Chamath or Elon)
This can only really happen on stocks that very few institutions (i.e. rich people) actually own, meaning it needs to be held / bought on mass by retail investors
In any other scenario where 1 and 2 happen to be true, this would be classified as market manipulation and be immediately shut down by the SEC
My Positions wallstreetbets veterans may recognize me as the 🌈🐻 who wrote those long-ass 2000 word essays about how the stock market is in a bubble and loaded up on VIX calls last time you heard from me. Although I still stand by my thesis and stocks like GME, TSLA, and NKLA is just proof that we've reached the euphoria phase of it, I learned my lesson that I'm idiot trying to short it (for exactly the reasons described above) and got the fuck out of my position when VIX shot up back in Sept. Most of my "real money" has since been moved to gold and crypto, but because I'm a degenerate gambler, I still have a bit of money playing with /ES and a calls onhighly-shorted stockswith meme-stock potential (i.e. vast majority held by retail investors). Now that I'm busy with work again, I probably won't be posting as frequently as I have had in the past, but you'll see me around from time to time :).
Village Farms (Aka $VFF aka $🍅) DD; One of the best Cannabis 2021 plays available.
TLDR poem; 🚀's are red 🍅's are red 🚀🍅🚀 🍅's 🌈🐻's soon to be 💀 (Real TLDR's at bottom) ”Why the !@&? would I want that 🍅 growing stock?" Yo, brother, calm down that anger. I'm not providing investment advice so stop right here if you like. We're just having a casual conversation about a bunch of things on a stock I'm personally YOLOing 65k on. (Aka my positions, no ban!) If you're unaware though, this 30 year produce (🍅) growing company has been utilizing their decades of experience to grow Cannabis with stellar results so far and with 2021 looking to be really good for them. Specifically, this will be on show these first two quarters of the year. An important side note is that as of November 2nd, they now privately own the full 100% of Pure Sunfarms, their Cannabis subsidiary. "Oh I should get in NOW, huh? I see that $🍅 ran recently, why would it keep running?" Great question brother! Of course, that's up to you! But... $🍅 actually has multiple aspects as to why this has a very likely chance to run, then stay at a price that is probably higher than you would think "reasonable," and then still have more runs throughout the year. First way to try and back this up, is pointing out that this low float stock of only 77,820,000 shares has a CEO that owns 12% of the stock himself, and a total of 13.6% owned by the Management and Board. On top of that, another +12% of the float is held by institutional holders for an immediate 25% of this already low float stock off the table. More on the float in a moment, but with that quick knowledge we next just need to take a quick peek at how $🍅's main competition's Share Price (SP), Share Count and Market Caps (MC) compare. AFTER EACH COMPANIES MARKET CAP (MC) IS HOW MUCH EACH COMPANIES SHARE PRICE (SP) CAN GROW PER MARKET CAP GAIN OF $1 BILLION. As of close on February 5th: Canopy Growth: SP - $42.93 - 373,730,000 Shares
$16,044,228,000 Market Cap with SP growth of $2.68 per $1B MC
Cronos Group: SP - $12.01 - 356,190.000 Shares
$4,277,842,000 Market Cap with SP growth of $2.81 per $1B MC
Aphria: SP - $16.67 - 312,570,000 Shares
$5,210,542,000 Market Cap with SP growth of $3.20 per $1B MC
Tilray: SP - $25.72 - 148,260,000 Shares
$4,070,447,000 Market Cap with SP growth of $6.32 per $1B MC
Aurora: SP - $12.88 - "183,660,000 Shares"
$2,365,541,000 Market Cap with SP growth of $5.44 per $1B MC
$🍅/Village Farms: SP - $15.09 - 77,820,000
$1,174,304,000 Market Cap with SP growth of $12.85 per $1B MC
So, not only are they way behind in Market Cap, even to Aurora, but the amount that $🍅 can gain in Share Price to get there is unmatched. I'm not saying the other companies should go down... I'm just sayin... look at this... VFF - $2,000,000,000 Market Cap? $🍅 - $25.70 VFF - $3,000,000,000 Market Cap? $🍅 - $38.55 VFF - $4,000,000,000 Market Cap? $🍅 - $51.40 VFF - $16,000,000,000 Market Cap? $🍅 - $205.60 ”So what? They are THAT much behind the competition." Hey, I get it brother, we've only talked only about superficial stock related info so far. Just setting the base in understanding it's growth potential based on their industry competitiors. We're getting there, I promise! Just one more thing about $🍅's current positioning though, which factors in a bit of a short squeeze. Now, don't get it twisted, this is not a post about some one-time short squeeze, just a brief mention. Just, in this moment, it so happens the timing could cause a little extra pop for this incoming next fundamental and technical run that will establish $🍅's new base level. Check it out, from 1/22 - 2/2 an average of 50% of the daily volume was short. Averaging about 25% of volume going short daily on either side of it as well. This heavy shorting came at the heals of a recent company action that caused quick downward pressure on the Share Price and in turn gave greedy 🍅🌈🐻's ability to try and push it down unreasonably. Did you notice the most recent closing price is $15.09 on Feb 5th? You might not have noticed though, that on January 14th, $🍅 had a mini run and peaked at $15.05. The next day, on January 15th, $🍅 dropped for a close of $12.65. Closing above that previous mile stone means every short since the raise is now underwater. Just sayin'. ”What happened that caused that drop?" Good things happened, brother. Good things. And... they got shorted for it...? $🍅 announced a direct share offering that injected US$135Million cash to the bank @ $12.60, giving shorters a bit of strength over the last two weeks of January. This semi large difference between the offering and Share Price at the time is indicative of something very important about this raise. This was a planned raise that had nothing to do with the run $🍅 was going on IMO. IMO, don't mistake this raise, that closed on U.S. Inauguration Day, as anything other than preparation for growth and expansion. They are already executing profitably, they in no way needed this for normal functions. You have to understand, our ol' 🍅 is extremely diligent and resourceful in their approach to Cannabis so far, and will continue to going forward. Their lack of splash is probably why you likely haven't heard or considered them yet, but the precise and profitable execution is why you should do DD on them. Oh, by the way... $🍅 has some of the best positioning and assets for the now inevitable U.S. legalization of Cannabis. ”How is this Canadian LP, $🍅 , any better set for the U.S. market than their competition?" Again, stellar question's brother. And, again, multiple factors to this. Our first factor is a direct shout out to that $135M raise. Quoting the 🍅 CEO from their most recent earnings report conference call and in reference to potential U.S. strategies, "...we're prepared to look at, if we have to do acquisitions or strategic partnerships and other locations..." That $135M putting them +$200M in bank is taking a certain type of vision, to me. ”What, I'm suppose to believe your opinion that they have U.S. potential from a quote and your speculation?" Naw brother, you're suppose to understand that fact because they already have 5.7 Million SqFt of "Hemp" grow space ready to go in Texas. Speculation and understanding how this company functions is part of my YOLO call strikes though. A heads up, Cannabis uses the same growing system and could "be rapidly converted to cannabis production" the moment ready. - 🍅 CEO Even beside the U.S. Blue Wave that will have some type of effect on Cannabis, Texas has put forth multiple pieces of legislation up for up for debate on it's own. With, or without my personal speculation on their raise, their Texas assets are shaping up to be extremely valuable for them in the likely near-term future. Icing on the cake of it all is simply that they are in no rush at all for when it happens. They're currently profitable, and growing from their Canadian and other international positions as well, so U.S. legalization is simply a massive bonus whenever it happens, not a necessity. Like for some unnamed others... ”Yeah, so what? That still doesn't say WHY $🍅 would keep running outside of hype." Hey, absolutely that's fact. So far. Now that we understand their comparative surroundings and asset ready U.S potential, let's bring in some internal 🍅 Cannabis biz facts. Here are a couple of the most recent earnings, Q3's, Cannabis specific highlights: 75% increase in Net Sales 81% increase in Gross Profits Impressive as that is, it's important to understand this is not some one-off fluke, but the first point in the provable continuation of their launching point for growth, which was Q3's the prior quarter, Quarter 2 2020. I say launching point because of the execution of strategy over the last year and they have a lot of factors on why they will continue to see growth in their numbers. The key to understanding the earnings and $🍅 share price growth potential is in the timeline details of their release approach for new strains, products, product segments, and accessibility. ”What, a few random new products is you're point?" Well, it's a part of the main reason on timing of the moments before earnings, yes. Because brother, it's not just any new products, but specific new segments of products that are brand new pies of profitability to eat from for extra growth potential generally... ...and also how they set up their earnings reports for "surprise" growth effects with a specific style of WHEN they release their new products. This upcoming Quarter 4 Year End 2020 report with be the first quarter to have their 2.0 products available for a FULL quarter. Our feature earnings growth products for Q4 are Vapes and Oils. Being released mid-September, the very end of Q3, that Q3 report got a nice C$1Million boost in Net Sales from the roll out and because of the timing of release Q4 will see an exponential effect of growth from that segment due to that timeline of release. Similarly, Quarter 1 2021, aka right now, will have TWO additional new segment effects! On December 21st, just before the end of Q4, they started offering their products for Medical for the first time through a deal with Shoppers Drug Mart. An important key to this Medical deal is this is their first entry into Quebec, the last 30% of Canada they need. 🍅's brand was also the first brand to offer anything in the Ounce size for the Shoppers consumers. Seeing the ~1 week effect medical might be interesting!... to me.... Our other brand new segment that is now fully rolled out is edibles! Earlier in January, 🍅 announced a deal with White Rabbit, an edible company with a vegan, gluten-free craft gummy company with a manufacturing process call EAT ME. With this, 🍅 has started offering White Rabbit products as of about mid January. By establishing this parternship, 🍅 now has access to that process and as of February 5th now released their own branded edibles as well. Pretty forward thinking and sustainable to ensure to grab a good tasting vegan and gluten-free craft gummy. This win-win situation means no messing with growing pains, straight to the bottom line move. Love it. ”Again, so what? Wha.." Don't mean to be rude, but I wasn't done yet... Both the upcoming Q4 and Q1 have additional bonus growth factors! For Quarter 4, first week of October, aka first week of Quarter 4, saw the release of their newest higher THC and higher priced Pink Kush and D.Bubba strains were release in their large 14g and 28g formats. When these strains released for the 7g and less formats on a similar timeline fashion, the small format sizes saw an increase of 33% on Net Sales over the Volume sold. Like I said, simply bonus growth factors from the decades old 🍅 company that understands the importance of showing growth Quarter over Quarter in a flooded industry with such tremendous potential. For Quarter 1, early January also saw the release of their High THC vapes in addition to their current offerings. **”Bro, are you done yet?"* Okay okay jeez, I get it. There's still just like one-ish more things though... On a very quick view of some Marco-level elements, many provinces had extra legal red tape on providing licenses with Ontario being one of them. Ontario also just so happens to be 🍅's biggest customer, and had also been known for being a province with the least amount of stores for the amount of population they have. In August 2020, they upped the number of store licenses they were issuing from 20 to 40 per month, just in time for Q4... In December 2020, they doubled it again to 80 licenses a month, just in time for Q1... To put a little perspective on that, by the end of the most recently reported quarter, Q3 2020, about 190 licenses were issued. By Q3 2021, approximately 1,070 licenses will have been issued. Generally, about ~90% of the licensees have their stores up and running each time Ontario reports its updates. That's a lot more stores brother. This matters because we also know the 🍅's brand is increasing in popularity for Ontario as well. After being +13% of the OCS's volume from October 2019 to October 2020, October 2020 specificallywas 15% of the dried flower volume going 🍅 brand. Aka increasing in popularity. On top of that, we were also told their brand new segment, vapes, was about top ~3 ish for Quarter 4 in the OCS as of November. ”This still doesn't really explain why they will grow... does it?" Look brother, it's a Reddit post that's already too long but I believe I've shown a lot of 🍅 positive factors to add on top of what was already going to see growth by itself. The Cannabis industry is hot right now you guys. Beyond retail, their Wholesale segment experienced a +140% surge in volume and sales in Q3 as well, with indicators that Q4 will continue steady growth in that cornerstone of additional revenue. Being the cheapest producer in the game will continue to have it's benefits. If you think it's Aphria, you are incorrect. Aphria is solid, but the 🍅 beats them out pretty easily. Aphria Market Cap is also $5B to 🍅's $1B... When it comes down to it, this Quarter 4 earnings report needs to speak for itself. I have my own personal opinion on what it might look like. Do your own research for your own opinion, brother. Finally, just so you're in-the-know, my last notes are some recent analyst price targets for $🍅 Global Alliance - $20 Roth Capital - $22 Raymond James - $26 Beacon 1-year target - $35 Some supposedly big German Stock magazine - $30 Random people on Twitter - $+20 Well, fun conversation brother! Don't forget, this was in zero ways financial advice, but if you wanted more not intended to be the basis of any investment decision $🍅 related information, or wanted to try and argue some point you think I jumped to,I wrote a very deep dive VFF analysis with Q4 predictionpotentially worth checking out first (+40% Gross Sales and +60% Gross Profit conservatively predicted). TLDR; 1 ) Comparatively, Village Farms (🍅)'s Market Cap is 1/16 of Canopy, 1/4 of Cronos, 1/5 of Aphria, 1/4 of Tilray, and 1/2 of Auroras. 2 ) Being a low float stock with 25% institutional holders and massive recent shorting that is now underwater will likely cause an extra short squeeze on top of the incoming technical/fundamental run. 3 ) 5.7 Million Sq Ft of grow space in Texas ready for quick and immediate Hemp to Cannabis conversation at the drop of any U.S. Legislation. Also, $🍅 cashed up for acquisition potential. 4 ) Release time line for Vapes, Oils, High THC Large Format Offerings, Medical (with Quebec), High THC Vapes, 3rd Party Gummies and 1st Party Gummies will all have debut showings on these upcoming Quarter 4 2020, Quarter 1 2021 and Quarter 2 2021 earnings reports. 5 ) Massively increasing store number from 🍅's best consumer, continued best-in-industry grow process for continued Wholesale strength, increasing quality and popularity of their products show positive trends of growth from their current segments as well as all the new ones. 6 ) Scroll up a smidge to check some analyst price targets. Still TLDR; $VFF = $🍅 = a stock that I like = 🚀🍅🚀 = opinion = 🌙 PS: In case you didn't check my positions link near the top, I have 3k shares and 85 call contracts. I'm likely near to never going to sell my 3k shares @ $6.21, but I will be flipping my Feb and March calls at the end of this next run. Doubt I'll touch my June or 2022 calls.
Beermoney for Busy People! (2021) - No Disqualifications!
Beermoney for Busy People! (2021)
Hi! I try to make this post each year about sites that don't have DQs and are worth your time to use even if you have a busy life! I have removed sites and apps that no longer exist and have also added a new one I am using this yea! I am a full-time student and work while in school so I don't always have time to grind out surveys for hours at a time. To qualify for this list, the sites can't DQ and have to be worth your time to use! Hope these help! Let's get into it.
CrowdTap is a great site for short polls and surveys that is available online and in a mobile app on iOS and Android! The questions are about things such as consumer goods, food products, and services. The polls pay 1.5 cents each and the short answer questions pay 10 cents each (converted from their points system). Some of these polls are combined into longer surveys, and some are single one question polls. All of them are well worth it for the time that they take and there are no DQ’s of any sort. Reward options include Amazon, Target, Walmart, Steam, Xbox, and more. You can cash out starting at $5 and I am able to cash out about once a week. Make sure to give quality answers and look out for attention checks because people have been banned for not giving quality answers. Definitely add this one to your routine if you have not yet.
This is a site with short surveys and no DQ’s. There are short surveys (10ish questions) to collect demographic data that pay $0.10. As you do these, your trait score increases. Having a high trait score makes it more likely to get high paying surveys. You have to be patient, and you might go weeks without a survey, but once you get to max trait score it is definitely worth it. I have a max trait score and I get at least one survey (if not more) per day. The real surveys that aren’t just for demographics can pay upwards of $2. You can cash out at $15 via PayPal, Amazon, or Walmart. Just as some inspiration to stick with it, after hitting max traitscore I am on track to make $150 on here this year!
Pinecone is a great survey site with surveys about consumer products and food that don’t DQ and pay $3 per 10ish minute survey. I get an average of one a week. They also sometimes send you samples of the products to review and I have gotten several of these this year! The catch is that you have to find an invite to join the panel. These can be found on offers or banner ads on GPT sites so keep an eye out for one! It is well worth your time to sign up. You can cash out for PayPal and many gift cards at a $5 minimum.
This one is great. You take academic surveys for universities and researchers and get paid in cash. I have been getting tons of surveys on here right now about Covid-19. As long as you don’t miss attention checks you won’t ever get disqualified. Some people get multiple surveys a day and others get only a few a week based on demographics. Usually it slows down in the summer because school isn’t in session, but they’ve had a lot of surveys available this summer. Many surveys pay at least minimum wage. Pro tip, if you ever have a problem with a survey or miss an attention check that you noticed, try contacting the researcher and often they can fix the problem for you. You can cash out with PayPal with no fees (for U.S. users).
Zogo is an iOS and Android app that pays you to learn about personal finance. It is backed by a variety of established banks and is actually quite interesting to learn through. While in the past it required a sponsor to be able to cash out, now anyone can earn in the app. You earn by answering a set of questions once daily through the “pineapple party” (the name for their currency). You earn pineapples based on your performance. You can cash out for a wide variety of gift cards such as Amazon and Target at $5. It is fun and worth it because you are learning valuable lessons about finance as well!
YouGov is a survey site/app that pays anywhere from $0.50 to $2 per survey. You never disqualify. I get a couple surveys a week. Most of the surveys are about public policy, politics, or general opinions of companies. You get the best value for your points if you save up for the $100 cash out. They offer the $100 cash out in bank transfer and Amazon. The Amazon gift card option used to be a physical mailed card but now its an e-gift card so that makes it even better! They offer other gift cards but they are for smaller values at worse rates so I would avoid them. Available online, on android, and on iOS.
E-poll is a survey site with surveys that don’t DQ. They send you surveys via email when they are available. The surveys are often about pop culture, TV shows, and celebrities. Some of them pay better than others for the time it takes to complete them, but most are well worth your time. Make sure to complete the surveys soon after you get the email, because some fill up within a day or so. You can cash out for several gift card options including Amazon and Starbucks. You get better rates with the higher valued gift cards so I always save up for the highest ones.
Forthright is a survey site with a nice twist. You sign up and receive invitations to surveys via email. I don’t usually do their “partner surveys” because they often DQ and you can get stuck in an endless loop, which doesn’t really fit with the point of this post.. Their non-partner surveys are awesome. They pay well for the time spent but they also have one of the best disqualification bonuses I have ever seen. Every three surveys you take, regardless of whether you disqualify or not, you get a $2 bonus. That is $0.66 per survey on top of its base pay regardless of whether you qualify or not. The base pay for the surveys ranges from $1-3 depending on length, which varies from 10-30 mins. They usually take much less time than the estimated length. I get a non-partner survey about once every 1-2 weeks and made around $50 here last year with minimum time spent. They pay instantly with PayPal, Amazon, or Bitcoin with no minimum.
Perksy is an app that sends you short surveys that they call “stacks”. These surveys generally pay anywhere from $0.30 to $1.00 and I get about one a week. You can’t DQ from these and they only take a minute or two. The minimum cashout is pretty high at $25 but when you sign up you get a signup bonus that gets you pretty close to your first cashout. I am able to cash out about once a year. They offer a lot of different gift cards but the most notable ones are Amazon and Target.
This one is quite popular and most of you have probably heard of it. This app is run by Google that will send you short surveys. If you have the app on iOS you can cash out to PayPal at $2, but on Android you can only cash out to Google Play balance. People who travel a lot or use a lot of Google services may get more surveys than others. I make $10ish dollars a year on here but I’ve seen others make more.
This is one of my favorites. The app will send you “Pulses” that you can answer for cash. The surveys start out paying around $0.25 each but as you level up your account they pay more. Mine currently pay $0.34. They have non-paid pulses that can level up your account but those aren’t really worth doing. The minimum cash out is $20 via PayPal. I have made about $10 here just in the last week due to pulses about Covid-19.
This is an app that is owned by SurveyMonkey, the popular survey development company. It offers short surveys that pay anywhere from $0.25 to $0.50 depending on length. The surveys take no longer than 3-5 minutes. They technically can DQ, but this happens very rarely and only at the very beginning of a survey. The nice thing about the surveys is that they use SurveyMonkey's survey software so they are consistent and easy to complete. While they do send notifications, earnings on here depend on how often you check the app because they don't always notify you. I try to check the app at least once or twice a day. You can cash out at $5 for Amazon with instant payments.
SurveyMini is a little different. The app sends you surveys when you visit different stores to review your experience there. They ask you about your satisfaction with the store, what areas you bought from, etc. The surveys usually pay $0.10 and take about a minute, but some can randomly pay up to $0.75. The more you visit stores, the more surveys you will get. You can cash out at $10 but you get slightly better rates the more you save up. They offer e-gift cards such as iTunes, Xbox, and Visa, but sadly no Amazon. I am on pace to cash out for $25 twice this year.
This is a new one this year and has easily become the most worthwhile receipt apps out there. All you have to do is submit either 10 paper or email receipts per month to earn a $10 Amazon gift card at the end of the month. I have also received a short survey from them that paid in Amazon cards as well. While this app has a waitlist, go ahead and join. It only took me a couple weeks to get accepted. A dollar per receipt is extremely high for a receipt app!
This app has surveys with a more personal and fun spin. You get paid via PayPal for each task that you finish. There aren’t always tasks available but when there are, they often pay well. I had one for testing an app that paid $9! It’s a nice option for something a little different than traditional surveys.
Thanks for reading! Hope these beermoney sites/apps help you make better use of your beermoney earning time! Let me know if there are any sites that I didn't include that would fall into those categories. Give my profile a follow for more beermoney related posts in the future! If you want to read more of my posts, here's one of my favorites to get you started!
BE SURE TO READ! ONE OF THE HARDEST SHORTED STOCKS BEHIND GME! NAKD 🚀🦍 BE SURE TO READ THIS!! THEIR OFFICIAL THREAD IS nakd🚀🦍💎🙌🏻 THE BACKUP ACCOUNT IS NAKDstock The Next GME: A Conclusive, Systematic Analysis To Determine Today’s SINGLE BEST Short Squeeze Opportunity A bit of background first to afford some credibility to what I go on to explain: I haven’t been a Redditer for long. I majored in mathematics (think the likes of stochastic calculus and the Brownian motion), have been working in ‘high finance’ for all of my professional career, and have been trading the markets for over six years. I only joined Reddit a couple of days back to better understand what drove the GME story after being late to that rally, and with the sole purpose of finding out if there is still an opportunity for me (and the thousands of others out there who missed out on the GME glory run) that can be turn into cash in the bank. After understanding the mechanics of what drove GME, armed with the hitherto-unprecedented knowledge that a retail investor base can in fact bring hedge funds down to their knees in the very specific context of a short squeeze trade under the right circumstances, I decided to start from scratch and scour the US market for the best short squeeze opportunity out there NOW (01 Feb 21) without any bias towards any particular stock as I held nothing at this point and was on an unadulterated quest for the true best short squeeze trade - it could be GME, it could be AMC, or it could be something unheard of Using data from short side analytics subscription services, I started off by compiling a list of the top 50 names in the entire US market with the largest short interest. All the information I used is publicly available and I am not breaching any obligation or regulation if I present the data in a summarised format as I have below. To keep it this way, I will refrain from sharing longer spreadsheets of raw data or revealing the specifics around the specific data sources used. Rest assured, the data hasn’t been tampered with to serve an ulterior motive as
I have none
I’m pretty sure that’d amount to market manipulation which is a criminal and possibly jail-able offence
Some important points to note here:
Collecting and processing short-side statistics is not a hard science. Commonly used metrics like SI, DTC, utilisation, fees etc can vary depending on the sources of the underlying data. It would be worth noting that primarily, there are two types of short-side data viz. exchange-driven data which is based on the number of shorts traded in the market and lender-driven data which is based around quantifiable characteristics about the securities that are borrowed to facilitate said short. Since naked shorting is banned, the two are theoretically equivalent but in practice some differences are seen. This is also the reason that short-side data, which is critical to identifying short squeezing opportunities, is almost never real-time and the most reliable data, from my experience, has at least a one day lag.
Other things being equal, it is easier for a retail investor base to squeeze a short on a company with a smaller market cap than one with a larger market cap for the very simple reason that the former calls for a smaller investment outlay than the latter
The metrics:
Short float: This is the total number of a company’s shares that are traded short, commonly estimated by the number of shares being lent out
Short interest (SI): This is the short float as a percentage of a company’s free float and is one of the most important indicators of how heavily a company is shorted. The higher the SI, the more heavily the company is shorted
Utilisation: The only difference between SI and util is that the denominator of the latter is the number of lendable shares which in practice can be different (less than) the free float of a company
Days to cover (DTC): This is the company’s short float as a proportion of its recent volume, usually trailing 30 days ADTV (Average Daily Trading Volume). Other things being equal, the higher the DTC, the more difficult it would be for a short seller to cover their short without raising the price significantly (which in turn makes a short cover more painful i.e. expensive for the shorting party) - this is also coincidentally an explanation of what a short squeeze is for those who care
Borrow fee: Fees paid to borrow a security. The higher the fee, the more in-demand is a security’s borrow for directional (shorting) or arbitrage trading purposes
I built a squeeze metric which summarises much of the aforementioned data into one number which I then normalised into Z-scores making up my Squeeze scale. The higher a name ranks on this list, the more practical and compelling of a short squeezing opportunity it presents. Below (or attached titled, “Start of 2021”) are the top 10 names from the list as of the start of 2021. Short squeeze scale at the start of 2021 (higher the 'better') Many familiar names feature here, including our hero, GME. Also notice NAKD being in pole position although the short interest at this stage is not high enough to classify it as an easy-win that GME appears to be with its 90% + SI at this stage. Remember that I mentioned that processing short-side statistics is not a hard science and subject to multiple interpretations? Knowing this, I ran multiple iterations of the squeeze multiplier calculation after making a host of justifiable adjustments but to my surprise, it came up as THE best short squeezing opportunity at the start of the year despite its lower SI compared to its competition on the list - Why? Because of that tiny market cap. This again is quantifiable evidence especially for retail investor bases that the market cap of a stock makes a world of difference in terms of its allure as a short-squeeze trade. Now that we have some hindsight perspective, I ran the exact same model to answer our golden question: What is the CURRENT best short squeezing opportunity? The analysis is as of this weekend so some of the numbers below are as of 29 Jan 2021. However, this was refreshed thereafter and the results are unchanged (below/attached titled, “Current”): Current Short Squeeze Scale (Higher the 'better') Now, NAKD US has my full attention as should be the case for all of you by this point. You’ll also notice that GME has dropped off the top 10 list now (it is still in the top 25) because its market cap has burgeoned and short interest has tapered off palpably (on the back of Melvin and others covering their shorts in part at least), making better candidate-companies for short squeezing trades for those who don’t already have a position in GME or have taken profits (or losses) from GME. This already made a compelling case for NAKD but I wanted to be 100% certain that this is the BEST short-squeeze opportunity out there on the back of my analysis so did some additional work to come up with this (below/attached, titled “Charts”): Charts For this, I decided to compare the winner of our test, NAKD, a name that we recognise a symbol for what is probably the history’s first retail short squeeze success, i.e. GME, and the runner up of the above test, ATOS, for good measure. What GME had going for it was a lethal combination of high DTC and high SI, both of which have now tapered off - not to make it a bad trade but less alluring to alternatives now, chiefly NAKD, especially given GME’s high price. Sure, it could rise to $1,000 but would you rather make a 3X on GME now or a much easier to attain 9X on NAKD with it going to a paltry mid teen number? It was at this point that i jumped on Reddit to check if there was a following for this stock and sure enough there was a small but budding one (do join the sub-Reddit https://www.reddit.com/nakd/ - I will try posting this on multiple sub-Reddits to the extent that my karma allows me to). If I were fortunate enough to have made money on GME, I would use my profits from GME on the new GME that is NAKD now rather than try squeeze more out of GME. I must stress that this is not to undermine the efforts of our brothers on the GME frontline for whom i have great respect but is merely a rationalisation of what makes a fine short squeeze opportunity right now independent of other positions and also relative to its peers. My DTC data for NAKD is incorrect in the above chart so I added more accurate estimates from reverse calculations from the SI for the last three days. In terms of SI and price action, NAKD is now where GME was from early December 2020 up to around 20 Jan 2021. I would estimate that it could take anywhere between 1-3 weeks of continued, dedicated, diamond-hand buying and holding (the more done early on, the shorter that wait time will be) before this ripens into GME-like results. With regards to the c. 30M shares new offering in this name and concerns around how much this can dilute the price and SI: Normally, I would worry about the dilutive effects here but in this case, this is a direct offering so no new shares are created and in any case, it is too small to make a meaningful impact on the short float (even if there were new shares coming to the market, the estimated SI drop would be under 6%). It does mean that up to 30M additional shares can enter the lending pool allowing hedge funds to borrow up to another 30M shares that we might need to hold up against so may see a few more flat to down days like we did today but again, this is just 6% of SI and does not have any material impact on the short squeeze thesis here, in my opinion. If we continue to pile on the buying pressure (especially if liquidity remains low like it was today), NAKD will be a sure shot repeat of GME with no escape for the hedge funds shorting this name. All that is needed now is for more people to realise this to give it the momentum it needs to take it from being merely this ‘sure-shot’ as long as the aforementioned conditions hold to a position where we basically decide the price at which the hedge funds buy this back - then you’re talking your $15 or $50 or $100 or higher. KNOWLEDGE IS POWER - if this makes sense to you, please help me spread the word! This is an analysis purely from a short-squeeze angle but i know there is some fundamental analysis as well out there from some trustworthy sources to warrant an encouraging valuation if the above is not compelling enough. Now for the disclaimers: I am not a financial adviser and this is not financial advice. All of this is my personal opinion and encourage you to conduct your run your own due diligence before making any investment decision. Your capital is at risk but in my opinion, so is the risk of losing a once in a lifetime opportunity that buying NAKD presents now to realise the financial freedom that for me anyway would take years if not decades to achieve through conventional means. I wouldn’t have put my hard-earned money from over the years into this without doing all of the above as rigorously as I did and if i didn’t believe in the unbiased results that were found. I am doing this so that I can provide for my sibling who works an intolerably strenuous job involving a 5 hour commute every day and so that i can buy my parents a house worthy of being called their residence and I am sure you have similar aspirations as well. This is the stock market in which there is no such thing as a guarantee but this is quite possibly the closest thing we, as retail investors, can get to a guarantee if we unite and work towards a shared objective. he numbers speak for themselves so hey get out there and do what you have to do - feel free to share and re-post any of the above with whoever and wherever you please. I am not asking for any upvotes - all I want is for this to work for us all. #YOLO #NAKD #DD #NOTBULLISH #SERIOUSPOTENTIAL! All credits to u/ShortSqueezer108
You've probably been hearing a lot about Bitcoin recently and are wondering what's the big deal? Most of your questions should be answered by the resources below but if you have additional questions feel free to ask them in the comments. It all started with the release of Satoshi Nakamoto's whitepaper however that will probably go over the head of most readers so we recommend the following articles/books/videos as a good starting point for understanding how bitcoin works and a little about its long term potential:
Limited Supply - There will only ever be 21,000,000 bitcoin created and they are issued in a predictable fashion per the inflation schedule. Once they are all issued Bitcoin will be truly deflationary. The halving countdown tells you how much time until the next drop in block rewards.
Open source - Bitcoin code is fully auditable. You can read and contribute to the source code yourself.
Accountable - The public ledger is transparent, all transactions are seen by everyone.
Decentralized - Bitcoin is globally distributed across thousands of nodes with no single point of failure and as such can't be shut down similar to how Bittorrent works. You can even run a node on a Raspberry Pi.
Censorship resistant - No one can prevent you from interacting with the bitcoin network and no one can censor, alter or block transactions that they disagree with, see Operation Chokepoint.
Push system - There are no chargebacks in bitcoin because only the person who owns the address where the bitcoin resides has the authority to move them.
Low fee scaling - Most wallets calculate on chain fees automatically but you can view fee estimates and mempool activity if you want to set your fee manually. On chain fees may rise occasionally due to network demand, however instant micropayments that do not require confirmations are happening via the Lightning Network, a second layer scaling solution currently rolling out on the Bitcoin mainnet.
Borderless - No country can stop it from going in/out, even in areas currently unserved by traditional banking as the ledger is globally distributed.
Trustless - Bitcoin solved the Byzantine's Generals Problem which means nobody needs to trust anybody for it to work.
Secure - Blocks and transactions are cryptographically secured (using hashes and signatures) and can’t be brute forced or confiscated with proper key management such as hardware wallets.
Programmable - Individual units of bitcoin can be programmed to transfer based on certain criteria being met
Nearly instant - From a few seconds on the lightning network to a few minutes on-chain depending on need for confirmations. Transactions are irreversible by normal users after one confirmation and irreversible by anyone (including miners) after 6 confirmations.
Portable - Bitcoin are digital so they are easier to move than cash or gold. They can be transported by simply carrying a seed (a string of 12 to 24 words) on a device or by memorizing it for wallet recovery (while cool, memorizing is generally not recommended due to potential for forgetting the seed and the potential for insecure key generation by inexperienced users. Hardware wallets are the preferred method for most users for their ease of use and additional security).
Scalable - While the protocol is still being optimized for increased transaction capacity, blockchains do not scale very well, so most transaction volume is expected to occur on Layer 2 networks built on top of Bitcoin.
Divisible - Each bitcoin can be divided down to 8 decimals, which means you don't have to worry about buying an entire bitcoin.
Bitcoin.org and BuyBitcoinWorldwide.com are helpful sites for beginners. You can buy or sell any amount of bitcoin (even just a few dollars worth) and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, also check out the bitcoinity exchange resources for a larger list of options for purchases.
You can also purchase in cash with local ATMs. If you would like your paycheck automatically converted to bitcoin use Bitwage. Note: Bitcoin are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year.
Securing your bitcoin
With bitcoin you can "Be your own bank" and personally secure your bitcoin OR you can use third party companies aka "Bitcoin banks" which will hold the bitcoin for you.
If you prefer to "Be your own bank" and have direct control over your coins without having to use a trusted third party, then you will need to create your own wallet and keep it secure. If you want easy and secure storage without having to learn computer security best practices, then a hardware wallet such as the Trezor, Ledger or ColdCard is recommended.
If you cannot afford a hardware wallet there are many software wallet options to choose from depending on your use case. Mobile wallets like BlueWallet are generally more secure than desktop wallets. Beware of fake mobile wallets and check reviews from reputable Bitcoin websites. Avoid paper wallets or brain wallets.
If you prefer to let third party "Bitcoin banks" manage your coins, try Gemini or Unchained Capital but be aware you may not be in control of your private keys in which case you would have to ask permission to access your funds and be exposed to third party risk. There is a saying in the community, "Not your keys, not your coins" meaning if you don't store your coins in a wallet that you control the keys to then you do not really own your bitcoin as you have to ask permission from the third party in order to move them.
Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email! 2FA requires a second confirmation code or a physical security key to access your account making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below. Make sure you create backups of your 2FA codes. Avoid using your cell number for 2FA. Hackers have been using a technique called "SIM swapping" to impersonate users and steal bitcoin off exchanges.
Physical security keys (FIDO U2F) offer stronger security than Google Auth / Authy and other TOTP-based apps, because the secret code never leaves the device and it uses bi-directional authentication so it prevents phishing. If you lose the device though, you could lose access to your account, so always use 2 or more security keys with a given account so you have backups. See Yubikey or Titan to purchase security keys. Both Coinbase and Gemini support physical security keys.
Watch out for scams
As mentioned above, Bitcoin is decentralized, which by definition means there is no official website or Twitter handle or spokesperson or CEO. However, all money attracts thieves. This combination unfortunately results in scammers running official sounding names or pretending to be an authority on YouTube or social media. Many scammers throughout the years have claimed to be the inventor of Bitcoin. Websites like bitcoin(dot)com and the r / btc subreddit are active scams. Almost all altcoins (shitcoins) are marketed heavily with big promises but are really just designed to separate you from your bitcoin. So be careful: any resource, including all linked in this document, may in the future turn evil. As they say in our community, "Don't trust, verify".
Avoid using ad-based search engines like Google or Yahoo: ads are shown based on how much the advertiser bids, and scammers can easily outbid legitimate providers for ad space, since immoral ways of earning money are far more lucrative than moral ways. Use DuckDuckGo instead, which has no ads, and never tracks you as well.
Ignore private messages offering services.
Never enter your seed words in a website of any kind. Hardware wallets will recover by displaying possible seed words on their own interface, never on a website.
Always check addresses on your hardware wallet before sending or receiving. Some malware has been known to replace addresses in your web browser or that you copy-and-paste.
Avoid clicking on links like that look like links, such as https://www.google.com/, without first hovering over it and actually checking where they go to. Just because a link is labelled with an HTTPS address does not mean it actually sends you to that address. It is trivial for someone to comment a link on Reddit that looks like it will send you to one website when it actually sends you to another, and you might not notice the difference until a scammer has gotten all your money, or you have downloaded and installed software that steals your money.
Common Bitcoin Myths
Often the same concerns arise about Bitcoin from newcomers. Questions such as:
Is Bitcoin a Ponzi scheme?
Will governments ban Bitcoin?
Will quantum computers break Bitcoin?
All of these questions have been answered many times by a variety of people. Here are some resources where you can see if your concern has been answered:
Check out spendabit or bitcoin directory for millions of merchant options. Also you can spend bitcoin anywhere visa is accepted with bitcoin debit cards such as the CashApp card or Fold card. Some other useful site are listed below.
Gift cards for thousands of retailers worldwide including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
There are several benefits to accepting bitcoin as a payment option if you are a merchant;
1-3% savings over credit cards or PayPal.
No chargebacks (final settlement in 10 minutes as opposed to 3+ months).
Accept business from a global customer base.
Increased privacy.
Convert 100% of the sale to the currency of your choice for deposit to your account, or choose to keep a percentage of the sale in bitcoin if you wish to begin accumulating it.
If you are interested in accepting bitcoin as a payment method, there are several options available;
Mining bitcoin can be a fun learning experience, but be aware that you will most likely operate at a loss. Newcomers are often advised to stay away from mining unless they are only interested in it as a hobby similar to folding at home. If you want to learn more about mining you can read the mining FAQ. Still have mining questions? The crew at /BitcoinMining would be happy to help you out. If you want to contribute to the bitcoin network by hosting the blockchain and propagating transactions you can run a full node. You can view the global node distribution for a visual representation of the node network.
Earning bitcoin
Just like any other form of money, you can also earn bitcoin by being paid to do a job.
You can also earn bitcoin by participating as a market maker on JoinMarket by allowing users to perform CoinJoin transactions with your bitcoin for a small fee (requires you to already have some bitcoin).
Bitcoin-Related Projects
The following is a short list of ongoing projects that might be worth taking a look at if you are interested in current development in the bitcoin space.
One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:
Unit
Symbol
Value
Info
bitcoin
BTC
1 bitcoin
one bitcoin is equal to 100 million satoshis
millibitcoin
mBTC
1,000 per bitcoin
used as default unit in recent Electrum wallet releases
bit
bit
1,000,000 per bitcoin
colloquial "slang" term for microbitcoin (μBTC)
satoshi
sat
100,000,000 per bitcoin
smallest unit in bitcoin, named after the inventor
For example, assuming an arbitrary exchange rate of $10000 for one Bitcoin, a $10 meal would equal:
0.001 BTC
1 mBTC
1,000 bits
100k sats
For more information check out the Bitcoin units wiki. Still have questions? Feel free to ask in the comments below or stick around for our weekly Mentor Monday thread. If you decide to post a question in /Bitcoin, please use the search bar to see if it has been answered before, and remember to follow the community rules outlined on the sidebar to receive a better response. The mods are busy helping manage our community so please do not message them unless you notice problems with the functionality of the subreddit. Note: This is a community created FAQ. If you notice anything missing from the FAQ or that requires clarification you can edit it here and it will be included in the next revision pending approval. Welcome to the Bitcoin community and the new decentralized economy!
The best place to cash a check is your personal bank or credit union. Free check cashing may be one of your account benefits. By visiting your local branch, you could have instant access to your cash. That said, depending on your local bank options, you might be better off joining a credit union. When you have a bank account, cashing a check is super easy. You can drop by the bank or use an ATM. With some banks, you can even use their app to take a quick picture of the check and deposit it from your phone. Without your own bank account, you can’t just walk into a local branch to deposit a check. Below, we list the banks and credit unions that will let you cash a check without an account. Note that you can’t cash any check at any bank. Even banks that allow non-customers to cash checks may restrict these transactions to certain check types or only cash checks that are drawn on accounts from that particular bank. We’ve divided our list below into banks that cash most check types and banks that will only cash checks drawn on their own accounts for non-customers. If you want to cash a personal check, the best option is to go to the bank that issued the check. To find the issuing institution, just look for the bank’s name or logo on the check. Keep in mind that banks will charge you to cash a check if you are not an account holder. You might have to pay: a flat fee of about $6 to $10; or the greater of either a minimum fee or a percentage of the check amount, such as 1%. If the bank allows you to cash your check well and good, but if you are denied the opportunity to wait for the exact date as indicated on your check to cash it. Can you Cash a Check at the ATM without an ID? Yes, at the ATMs you will not be required to produce your government-issued ID. In essence, you have a secret password or PIN, which helps you log into your account at a particular ATM. Top Places to Cash a Personal Check Beyond the Bank. Starting off is the list of the most common and accessible places to cash a personal check. Chances are you will have one of these places near where you live. 1. Walmart. These days you can find a Walmart location – or several – in almost any city. Walmart usually has great prices on everything – including check cashing. They charge just $3 to cash a check with a value of under $1,000. For checks with values of $1,000 and ... Short Answer: While you can usually deposit a check at an ATM, there are fewer banks that allow you to cash a check at an ATM. This is to protect banks from the risk of a bounced check, and also because ATMs only have a limited amount of cash on hand for withdrawals. For more details on cashing or depositing checks at an ATM, see below. Most banks will cash a personalized check written to a non-account holder for a fee. Some will only cash a check that is written from one of their account holders. You should be prepared to show some form of ID when attempting to cash a check at a bank. Here is a shortlist of some of the large banks that will cash your check. When you take a check into a physical location like a bank or check cashing store, you can get cash on the spot. So you literally “cash” the check. On the other hand, when you come to cash a check online you’re not “cashing” it per se, you’re depositing it into your bank account.
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