OT: Where/how to short gamestop stock (GME) currently at 300 again
Has anyone had luck shorting gamestop stock on any platform?
Ameritrade and Etrade will not allow it. However, there are many shorting it somehow on some platform. It is a 10 dollar stock trading at 300. It is free money in the long term, as long as you have the extra funds to compensate for any upward movement to a grand or more (for as long as this can remain irrational).
March 10th, 2021 at 10:26 AM ^
Robinhood. Sign up and get two free stocks. Add funds, sell those stocks. Then you will need to screen for options trading.
it will take a few days to get there. Once approved for options you can easily buy contracts to short sell.
Short selling is different than buying a put option, though both are short positions.
I'm not an expert, but I would not recommend doing either on this stock.
Put options because the implied volatility is so high that the best case scenario is modest gains for a lot of risk.
Short selling because the market can stay irrational longer than you can stay solvent, and the losses are not capped like with an option.
March 10th, 2021 at 10:27 AM ^
Why don’t you buy out of the money Puts that expire in 6-9 months? Limit your risk.
March 10th, 2021 at 11:27 AM ^
This is the right answer. Only problem is that the puts are very expensive because the expectation is that it will fall.
March 10th, 2021 at 11:38 AM ^
yes, the premium is so great that it limits the profit you would make when just shorting it outright.
I was looking at at price quotes. The premium is pretty crazy and you need to have enough time for your strategy to work. Seems like there is a play to make. It’s interesting.
March 10th, 2021 at 11:28 AM ^
Or sell an out of the money call and cover by buying a further out of the money call.
March 10th, 2021 at 12:01 PM ^
This sounds like a great idea on the surface, but really isn't due to the incredibly high Implied Volatility of the GME stock. As the stock price goes down, the implied volatility will also drop, and the option contract will drop based on its Vega value.
I have an account on TD Ameritrade and they allow simulated trading using fake, paper money. The first time GME popped (it hit mid-300s in late January), I tested this out myself - I bought a bunch of simulated puts with low strikes, expiring in November 2021 and January 2023, just to see how they'd react when the stock crashed down. Sure enough, the stock dropped back into the 40s...but my puts stayed at roughly the same values because the IV dropped so much and the options' values did, too, due to the vega. This is called IV Crunch.
I still have those fake puts in my paper trading account. GME is up 83 bucks today right now, and my puts are all up, actually. This is because the IV spiked. One example - the Nov 19, 2021 put with a strike of 30 started today with a market value of 5.70, but has now actually increased to 6.25 due to the big IV spike.
EDIT: GME just dropped 100 bucks in about 10 minutes, and the Nov 19 put dropped from 6.25 to 6.15.
March 10th, 2021 at 10:32 AM ^
"The markets can remain irrational longer than you can remain solvent." -- John Maynard Keynes
March 10th, 2021 at 11:12 AM ^
"Learn to Swim" -Maynard James Keenan
March 10th, 2021 at 11:39 AM ^
There belly’s will empty long before our pockets- I don’t recall
"Your mom can remain irrational longer than I can remain solvent."
-my dad
March 10th, 2021 at 10:35 AM ^
Tell that to Melvin Capital
March 10th, 2021 at 10:41 AM ^
Never
March 10th, 2021 at 10:48 AM ^
All trains eventually stop. This is science.
This isn't a reason to stand on the train tracks.
March 10th, 2021 at 11:25 AM ^
The science checks out.
The science is settled
March 10th, 2021 at 10:51 AM ^
Shorting is stupid. This stock is going to the moon.
Did I do that right?
March 10th, 2021 at 11:03 AM ^
Stonk.
Be sure to buy and HODL.
March 10th, 2021 at 11:04 AM ^
I believe this is more accurate:
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March 10th, 2021 at 10:54 AM ^
I think more people should get into investing. If you have the patience, in the long run the market generally returns nicely.
But this is not how I'd start. This is playing with fire.
March 10th, 2021 at 11:15 AM ^
Shorting = Gay
*This is not financial advice
March 10th, 2021 at 12:10 PM ^
There goes another 5 dollars.
March 10th, 2021 at 12:25 PM ^
I just sold all of my MGoPalpatine MGoPoints stock......
March 10th, 2021 at 11:17 AM ^
This whole thing has been hilarious.
Some bullshit stock (sorry gamestop, you've been great to me throughout the years but ot is what it is) is going to at worst change the way that the stock market works in this country or at best bring the whole corrupt shit show to its knees.
So buy gme and blast off
March 10th, 2021 at 11:31 AM ^
The only funny thing is the assumption that any stock is ever bullshit or not bullshit.
March 10th, 2021 at 11:45 AM ^
Agreed. The GME business model is on its way to being obsolete. This would be the worst company to invest in realistically. I mean we're talking about a retail gaming store in the day and age of being able to just download digital copies of games that you want.
I'm with you in that Gamestop has been so good to me over the years, but unless they change their strategy they are headed to the grave with Blockbuster.
March 10th, 2021 at 12:13 PM ^
You don’t understand what Ryan Cohen is going to do with this company. The brick & mortar stores that are closing is a good thing for tthem.
March 10th, 2021 at 12:24 PM ^
Cohen's play is to convert Gamestop from a brick-and-mortar reseller to a digital reseller, and that's a perfectly fine idea if you recognize it's not a business model that has much chance of being the billions-dollar valuations you're seeing with a stock north of $300. He has talked about making Gamestop a digital seller and that throws him directly into the cross-hairs of the Nintendo, PS and MS stores, which have the benefit of also being the developers of the machines the code is run on. And that doesn't even consider that publishers also have their own distribution channels as well as behemoths like Amazon.
If anything, GME's big selling point is that they do have brick-and-mortar stores for those buyers who don't live in areas with access to high-speed internet for downloading games; in that sense not having to download 30GB games on the regular but instead buying a disc you can (in theory, I know about release patches and all that) play with minimal updates is a market that GME could uniquely meet.
I'm not saying GME can't survive but that's their ceiling IMO - survival as one of many players in the game space. That's a $10-$20 stock company at best, not at the current valuation.
March 10th, 2021 at 12:21 PM ^
Were you the guy that scoffed at Amazon selling books online when book stores were closing coast to coast?
March 10th, 2021 at 12:51 PM ^
This analogy is exactly reversed. Amazon was at the leading edge of a new business model that had the clear potential to displace a ton of their competitors' business. GameStop is at the trailing edge of a business model that's almost certain to go extinct, facing a transition into a new business model with many larger, better established, and better structurally positioned competitors.
Exactly. Good luck breaking into the digital market when Microsoft and Sony already offer built-in online stores for their customers.
March 10th, 2021 at 11:24 AM ^
Do what you like, but this is paying for my new finished basement.
March 10th, 2021 at 11:38 AM ^
There’s no question the stock is way overvalued right now, but markets can behave irrationally for extended time frames. If you’ve got the means and want to play the market, go for it. If you’re new to investing, can’t afford to have money tied up for an extended period, or don’t know what ‘shorting’ is - then this really isn’t a good idea.
March 10th, 2021 at 11:43 AM ^
No, i have been investing for over 25 years. My problem is that it is extremely difficult to short some securities, namely gamestop, amc etc...
Ameritrade/Etrade and many other brokerage services have them on a certain 'no short' list - but there are many who are still able to short using 'something'.
I would just like to know what the platform is. In the long run, this is free money. You just have to have a cushion able to absorb it irrationally going up further.
March 10th, 2021 at 11:51 AM ^
Two problems with your hypothesis:
(1) these aren't long-term trades/positions; it can require a ton of capital to get to the "long run"
(2) because there is such a heavy short position (>100% of the float), the stock essentially can't be traded rationally. there are articles on this you may want to read before diving into this.
March 10th, 2021 at 11:51 AM ^
Are you sure it isn't worth $300?
Did you know that the P/S ratio on GME is 4?
There are many companies out there with ratios well over 100, and 30 is quite common.
March 10th, 2021 at 12:38 PM ^
Sorry, I wasn’t clear ... I wasn’t necessarily saying *you* shouldn’t short gme (or any other stock for that matter), I was just making a more general comment about apparent ‘can’t lose’ investments like this one. Hope you can find a brokerage that allows it and that it works out for you
March 10th, 2021 at 12:51 PM ^
Just as one example: Gamestop's new executive branch is now linked to Valve - one of the largest online cloud-based/digital video game companies on the planet. This indicates they'll be attempting to work together and incorporate Steam into Gamestop's online library. They're clearly making moves to gain traction online, not just their brick-and-mortars.
Maybe this is a financial endeavor not worth pursuing if you don't know how to find a broker with shares available to short or even find out if it's on the Short Sale Restriction List. It would seem to me that someone with 25 years of market experience would know these things and not have to seek guidance from members of a sports blog. This is respectfully coming from someone with 21 years of market experience himself, and trades for a living.
March 10th, 2021 at 11:39 AM ^
This stock isn't trading on the company's fundamentals. It's been interesting as hell to follow. I would be very careful if you want to short it.
??
March 10th, 2021 at 12:08 PM ^
Don't be so sure.
GME annual revenue = $5b
GME market cap = $20b.
A 4/1 ratio is actually low in this overheated market.
March 10th, 2021 at 12:44 PM ^
If you were thinking of investing in a horse & buggy distributor in 1910, you'd probably want to consider more than their P/S ratio.
March 10th, 2021 at 11:42 AM ^
Here for the deflate and buy thread.
March 10th, 2021 at 12:22 PM ^
Remember when Tesla stock was way overpriced and the stock price didn’t make any sense? Well, it then went up 700%, wrecking all of those that went short.
I’d be careful with naked shorting. At best you make less than a 100% gain, at worst you can lose everything. At least those that went long Tesla, recognized that 700% upside, something you will never get with shorting.
March 10th, 2021 at 12:34 PM ^
You say you've been trading for 25 years and this is free money?
Since you're prescient, I assume you bought a ton of gamestop less than a month ago when it was down around $40 and you're currently up 800% or whatever that is in 4 weeks?
Point being -none of us know where this thing is going to settle. If you've been doing this for 25 plus years you know that slow and steady wins the race. Don't try to get greedy.
March 10th, 2021 at 12:46 PM ^
Two months ago a number of people were on here advising against GME despite many of us making an absolute killing off of it, before they even posted.
Since then I averaged down even further (thanks!), and the short interest has (incredibly) gone up even higher. The MM's are currently doing everything they can to throw dirt on the fire, but we'll see. It dropped over $100 in less than 15 minutes a half hour ago.
It seems shortable on Interactive Brokers.
ETrade most certainly allows you to short stocks. I shorted GME at 325 in February and covered at 125 (too early but I'll take it).
I again shorted it at 200 (too early) and have another buy limit short order at 300. We'll see what happens with this new position.
March 11th, 2021 at 11:10 AM ^
Can you please go on r/wallstreetbets and ask this question so we can all watch?