Episode 65: My Take on Bitcoin & Cryptocurrency

Episode #63: Anatomy of a Short Squeeze: GameStop FAQs

With the GameStop incident further escalating we have been getting more questions about the whole situation. So we dedicated this episode to reviewing some of the specific areas related to short a squeeze. In today’s episode Grant dives into how short squeezes work, the controversy around Robinhood’s decision to suspend trading activities, the impact short selling has on our market, whether short selling should be banned, and more.Continue reading

My Take On Short Selling

My Take On Short Selling

Short selling has been in the news quite a bit recently as a result of this whole “meme stock” debacle.  With the army of Reddit traders creating short squeezes in GameStop, AMC Theaters, and a few other companies the practice of short selling in general is being questioned.

This is partly because the media is framing this as a David vs. Goliath story.  A group of underground Reddit traders bully the big bad hedge funds of the world by creating a short squeeze that sends share prices soaring.

Hooray for the little guy!

This storyline isn’t entirely accurate though.  Melvin Capital made a lot of news for being short, but many other professionals and hedge funds made a lot of money benefiting from the short squeeze by being long.  There’s a report that Blackrock pulled in $2.4 billion on the trade.

Nevertheless, David vs. Goliath is an easy story for people to get behind.  And since it’s easy to root against a villain, short selling is coming under fire because that’s the side Goliath was on.

Short selling as a practice captures the financial spotlight every few years – usually during times of market turbulence.  It’s often used as a scapegoat for corrections, which nearly always leads to calls for some type of short selling ban or suspension.  That argument doesn’t have much merit, but the discussion attracts strong opinions anyway.  Elon Musk, for example, is notoriously in favor of outlawing short selling.

I’ll explain my take on short selling in this post.

Continue reading

Episode 65: My Take on Bitcoin & Cryptocurrency

Episode #62: GameStop, Gamma Vortex, and Confirmation Bias

In the past couple of weeks, an exciting and dramatic chain of events has been going on around GameStop Corp., where their stock price skyrocketed in a very short time. GameStop is a video game and gaming merchandise retailer. While they have been performing adequately, GameStop hasn’t come up with fascinating and innovative things in the past couple of years as other growth companies do. For that reason, this stock price surge triggered numerous headlines in the news and rumors and stories in the financial community. In today’s episode, Grant dives into what caused this situation, how things escalated, and whether there’s anything illegal going on. Stay tuned until the end of the episode, where Grant talks about what you should do if you’ve made a bunch of money in GameStop shares or options.Continue reading