Trading 212 GAMESTOP SHORT SQUEEZE JUST GOT REALLY UGLY
I didn’t make a video about this yesterday, but today the situation has escalated, so i really need to go and do a video quickly, i’m recording this as we’re about 20 minutes into the trading session this morning on january 28th, and today the situation with gamestop has Just gone completely bananas instead of what everyone predicted instead of what everyone said, the stock price did not collapse. Everyone did not sell the money. In fact, the stock price is 20 up, as i am recording this video, but let me tell you the backstory. Let me tell you some of my thoughts and let me tell you some things that i haven’t heard. Other people mention, i think, are really important about it, but just before we get there a really quick disclaimer that i really have to make. I am not a financial advisor, i cannot provide financial advice to you and if you do need financial advice, please make sure you go and seek it from a suitably qualified professional now, really really quickly for everyone who hasn’t seen the one million videos out there. That explain what is this short squeeze? How does it work, and why has it happened i’m gon na explain it in literally just about 30 seconds or a minute. Essentially there are investment companies out there that make a lot of money by shorting stocks. The way this works is they go and sell stocks that they don’t actually own, and they hope that their share price is going to drop at some point in the future.
Then they will buy the stock at a lower price and essentially they’ve pocketed the difference. In the meantime, they actually have to go and borrow those stocks from somebody else and what happens in some cases if the stock price goes too high, then they may have to go and buy the stock back at a higher price. Therefore, making a loss – and this is what’s happening here and the reason it’s happening – is because some companies in particular melvin capital, have got way too greedy. They decided they’re going to go and short the stock of a regular everyday company called gamestop i’m, not going to go into the details, but they went and managed to sell 140 of the total number of shares that gamestop actually have in existence. So that means that they have to go and buy back a heck of a lot of shares at some point in the future, and some of those shares they’re gon na have to go and buy back twice in essence, if that makes any sense. So when a bunch of guys on a reddit sub forum called wall street bets have realized that this is happening. They decided that they’re gon na have a bit of fun at the expense of these rich who have gone and tried to make a ton of money by shorting a company for no particular reason, and they decided they’re gon na go, buy a load of these stocks Because at some point in the future, these short sellers are gon na have to go and buy them and the more people go and buy these stocks, the more the price goes up, and eventually these short sellers will have to go and buy back at a much Higher price and every single time the share price is going up.
This is literally costing those particular funds billions of dollars. Now this is what’s called a short squeeze and the company themselves, along with a lot of mass media, who seem to have been somewhat influenced in some shape, by what the funds view on this is have publicly stated that they think that it’s market manipulation. It is really unfair for a bunch of people to go and do this except these particular companies literally make their entire money by manipulating the market by crashing companies by short selling things by doing stuff. That is really questionable from a moral standpoint, yet they go and accuse everybody else of doing the exact same thing except probably 10 times less also here’s a really important point – and this is just my opinion – and i am not a lawyer, so i have no idea, But discussing stuff in a public domain based on information that is publicly available in the public domain and then saying what you personally think about. It is your opinion and what you are personally doing in terms of whether you’re deciding to buy or sell stocks is not in any way market manipulation. It is up to each individual person to make their own minds and they are not disclosing anything that is sensitive. Anything that shouldn’t be disclosed because it’s, not public they’re, just making their own decisions based on information that is publicly available. If this was market, manipulation and every single time, any investor or any analyst, comes on the cnbc and says what they think about a particular stock and why they are buying or selling it.
They would also be complicit in market manipulation, and this is pretty much everybody over the last few decades, so here’s what’s happened overnight overnight. For some reason, all major exchanges decided to go and change the policy literally. I have had it on the exchanges that i’m trading on they have decided to enable people to sell stocks in amc in jme all these stocks that are currently being short squeezed and they do not allow anybody to actually buy them, and this is a massive problem. Let me explain exactly why. I think this is a huge problem and what might happen on the back of it, because the defensive moves that these rich are pulling. It is sent the market into a frenzy. The price on the stock is continuing to go up. I am actually unable to log in to most of my investment platforms because they are suffering from loads of other people trying to go and log in trying to go and buy and sell stocks trying to go and do things. And the fact that i can’t log in is a really worrying thing, because if i had any pressing concerns about some stocks, if there are some stocks that i really needed to sell had open positions that i needed to close, i would not be able to do So and i don’t believe that it is the user’s fault for the fact that they want to go and use a platform that advertises that you can go and use them, that advertise that you can go and buy and sell stuff whenever you want.
Whenever the markets are open, i think this is a massive problem with the way the entire industry is structured. I think the big claim that the wall street bet subreddit is somehow manipulating. The market is completely ridiculous and stupid, because this is not manipulation. You know what is manipulation shorting, a company by a hundred and forty percent of their stock. That, in my opinion, is a much worse thing and although it is probably legally all absolutely okay, but i don’t see how that is in any way better than what happened afterwards. But here’s. The thing all exchanges have actually stopped the ability to buy gme stock to protect the consumer that’s. What the message that i got this morning from my trading 212 app – and this is the same message that most other people are getting as well, except there are two issues that i see from this. First of all, stopping consumers from being able to access their investment accounts and being able to actually sell or buy any particular stock is market manipulation in itself. The fact that nobody can now on major exchange platforms, major brokerages, actually go and buy these stocks is exactly the definition of market manipulation because you’re allowed to sell the stock, but you’re not allowed to buy it, and how? How legal is that that’s? A really good question here’s my second problem in some jurisdictions. This type of activity would actually be classified as legally providing financial advice, because the fca officially state that any service that explicitly recommends a specific course of action is the definition of providing financial advice.
So if you hold stock, for example, in gme – and you go on to your investment platform and your only potential course of action with that stock is to go and sell it because of the specific decision that that particular exchange has made. How is that not recommending a specific course of action? That’S just my opinion, i don’t know i’m, not a lawyer, not a financial advisor, but i see a massive problem potentially coming down the line because of the actions that all these companies are taking. But here is the worst point here is the absolutely worst point in the whole point of this video, and that is if nobody can actually go and buy if regular people using regular investment. Apps like this cannot go and buy, but can sell the stock who is buying it. Who do you think right now is buying stock that they really urgently need to buy before the price goes any higher? You guessed it the short sellers that really need to go and close their positions and for some unknown completely unknown reason. All of these companies are helping them by preventing anybody else from being able to compete with them in the buying process. So apparently it is completely legal and completely okay and completely fine for everybody out there to just prevent regular people from being able to buy stocks and shares that some specific companies out there are allowed to buy privately. You know because somebody has to be able to buy them in order for people to be able to sell them.
So obviously there is a slightly unlevel playing field here, and that is definitely in no way any form of market manipulation, because that would be illegal. Now wouldn’t there now that’s about all i have for this video.