It seems that Wall Street doesn’t like having other investors other than themselves involved in the movement of the stock market. Case in point, a company called GameStop has seen its stock go from $2.57 USD in August to a high of $380.00 this morning, not three dollars and eighty cents but three hundred and eighty dollars. The company has not changed its corporate strategy, no one wants to buy them out, and no, their earnings have not gone through the roof. GameStop has been heavily shorted, in fact as last Friday, January 20th, 72 million shares were shorted, the company only has 69 million shares and a float of 51 million shares. The villains as far as Wall Street is concerned are the amateur day traders who are stuck at home and talking on various chat groups, particularly Reddit, on where to put their money. Once it had been determined that GameStop was the largest short, day traders banded together and bought the stock, as you may have guessed GameStop’s price skyrocketed. Two large hedge funds were the largest components of these short positions and this morning flattened out their positions to the tune of a 100% loss, or perhaps even greater as short positions leave you with an unlimited liability. It is estimated that short traders have lost as much as $5 billion dollars that was as of yesterday, the number is now higher today, the stock doubled in 24 hours.
Wall Street is not impressed and comments by day traders that they (day traders) have always been looked upon as nobodies has left Wall Street with a bit of a chill. It doesn’t help when you the average investor buys stock only to find out that your fund manager or your broker is lending your stock to help someone else cause the price to fall while receiving a fee that goes to them and not you.
The USDCAD has had its move today, it will follow equities.
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