GameStop
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
https://preview.redd.it/gamestop-corp-annual-meeting-of-stockholders-v0-2qkjpngx476b1.png?width=852&format=png&auto=webp&s=8badfd89633de9f9360408ef7aeca1169fc0a6f3 https://preview.redd.it/gamestop-corp-annual-meeting-of-stockholders-v0-q8e1wvm8076b1.png?width=681&format=png&auto=webp&s=d565c1e4ca9f55a3190526217a309f441fba5acb
https://www.viewourmaterial.com/GME/gme_ps.pdf
https://www.viewourmaterial.com/GME/gme_ar.pdf
https://www.viewourmaterial.com/GME/gme_roc.pdf
https://www.viewourmaterial.com/GME/gme_agenda.pdf
https://www.viewourmaterial.com/GME/gme_sup.pdf
https://investor.gamestop.com/
https://preview.redd.it/gamestop-corp-annual-meeting-of-stockholders-v0-8itggmwef76b1.png?width=1604&format=png&auto=webp&s=37b68ab359d3f16ca911cc85b635288dc845b3a2
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
I first saw this theory in a post by u/-einfachman- and this is my adaptation.
Introduction
When you short a stock, you need assets to maintain that position. If the price of that stock goes up, the person you borrowed it from needs to know that you’re still good to buy that stock back and return it.
For example if I short a stock at $100 and it goes up to $150, I need to prove that I have $50 in assets I can sell to cover the short with.
I also need to pay a borrow fee for the service the lender is offering me.
For example if I short a stock at $100 on a 1% borrow fee and it stays at $100 for the next year, I now need an additional $1 to maintain my position. This is the classic theory behind “we can stay retarded longer than they can stay solvent”.
I can also plot this decay mathematically.
A = P(1 + rt)
A = 100 (1 + (0.01 * 1))
A = $101
*A=Net Liability, P=Initial Short Price, r=Rate of Growth/Decay, t=Time
And from this we know that the maintenance margin has increased $101 - 100 = $1. So I need an additional $1 in assets to keep my position open.
Critical Margin Theory
u/-einfachman- has theorized that the resistance we have seen on GameStop over the last 1.5 years is a safe guard against margin calls.
https://preview.redd.it/a1euckdd52491.png?width=2038&format=png&auto=webp&s=3ff43275b5f02febd2355c31e2717947093bf18e
There’s just one thing.
This line isn’t going down with the borrow rate. Not even close.
https://preview.redd.it/tx4yl7cf52491.png?width=1618&format=png&auto=webp&s=e377a0476fe21416d15a26d2fb2b596e273de99c
I’m going to work with 2 dates for this next section (circled above)
https://preview.redd.it/ixi1zneh52491.png?width=942&format=png&auto=webp&s=4f44dde13f20d4fcb6038f4c280db7332afa9948
The time between these 2 points is 204 trading days or 294 calendar days. 294 days over the 365.25 days in a calendar year is 0.80. Or 294 days is 80% of a calendar year.
So back to the borrow equation.
A = P(1 + rt)
A = 344.66 (1 + (0.01 * 0.8))
A = $347.42
And from that we know that the maintenance margin has increased $347.42 - $344.66 = $2.76.
Um… Hey u/scienceisexy, if the maintenance margin only increased $2.76 per share over that period why did we bounce off resistance at $199.41?
Great question u/scienceisexy.
I’m about to speculate, but I’m speculating based on real data so stick with me.
If the Critical Margin theory is true - that is to say that the bounces off the blue line highlighted above are HFs trying to save their ass - the critical margin is deteriorating WAY faster than the borrow rate.
How much faster? This is the cool part. I’m going to use the same dates as above.
A = P(1 + rt)
**quick algebras
r = ((A/P) -1)/t
r = ((199.41/344.66)-1)/0.8
r = -0.53
Holy shit. So the maintenance margin is going up 53% every year…
But hold onto your seats because there’s a catch. The stock price from June 2021 -> March 2022 went down. -42.5% from peak to peak to be exact. So someone made 42.5% on their short position but the maintenance margin is STILL up 53%. I want to hammer this home. The 53% increase in maintenance margin INCLUDES the 42.5% profit that was made. That means the actual rate of decay on the critical margin line is 95.5%.
I’m going to round up to 100% and you’ll see why in a second.
And just one more time because this is crucial. I short a stock at $100 on a 100% borrow rate. The stock goes to $50. I have made +$50 from my short position but lost -$100 due to the borrow fee. So I’m $50 closer to being margin called. This is why the blue line has a negative slope.
The average borrow rate of GME is 1% over that period, but the critical margin is increasing as if the borrow rate was 100% (95.5% to be exact). That doesn’t make sense. Is there some sort of financial tool out there that would give you 100x leverage on a stock? Hmm…
Well, option contracts get sold in groups of 100. What a coincidence.
Back to our $100 stock example - let’s say that instead of borrowing and selling a stock, I borrow an ITM Put contract, which gives me the ability to sell 100 shares at a given strike price. I exercise it, and sell those shares.
100 shares in a contract, 1% borrow fee per share. Well look at that, 1% * 100 is 100%…
It might not be Puts but some other financial tool like swaps. But the leverage is undeniable.
Today, the critical margin is at $169.10 (nice). One +30% day and hedges are potentially fuk. There’s more research to be done here and maybe a way to size the real short position - I will post updates accordingly.
tldr: Critical Margin Theory says that the maintenance margin for GME shorts is increasing at a crazy high pace. From circle 1 to circle 2; the price at which someone will be margin called (the blue line) has gone down 53%. I.e. where I would have been margin called at $344 now I'm margin called at $199. Which is crazy because I made money on my short position. If I exclude that profit the real decay is close to 100%. The only way I can see this being possible is if shorts are leveraged through options.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
-
We are a community subreddit largely consisting of employees. A place for them to have conversations, ask for help, discuss happenings in their store or the company, or just generally shoot the shit. We are NOT customer service. We cannot do any order lookups, check trade values, check stock levels, or process any returns. We are not officially endorsed by nor affiliated with Gamestop. For eventual assistance, please call Gamestop at (800)883-8895.
members -
A place for theoretical discussions about business and stocks - specifically GameStop Stock ($GME). Opinions and memes welcome. None of this is financial advice.
members -
We're the largest Funko Community on reddit. Keep up to date with the newest releases or just browse other readers' hauls and collections.
members -
The stock is this still shorted more then 100% the real sqeeze did not happen yet. BUY AND HOLD
members -
A place to share $GME and other meme stock insanity. Poke fun at the flat-earthers and sov-cits of investing for believing in fairly tales and conspiracies rather than learning how the stock market actually works. Please read the sub rules. This sub is not for financial discussion. It is for memes and casual discussion of GME and other meme stocks, and their associated cult(ure)s. Sister subs: /r/GME_Meltdown_DD
members -
This is the definitive Reddit source for video game collectors or those who would like to start collecting interactive entertainment. It's a place to share ideas, tips, tricks or secrets as well as show off collections. Most importantly it's a place for game enthusiasts and collectors to keep video game history alive. So come and join one of the largest internet forums for video game collecting!
members -
The largest video game retailer in Canada. Play. Trade. Save. A subreddit where employees and customers can help out and discuss topics related to GameStop Canada. This is NOT an official Gamestop Canada social media outlet or customer support.
members -
Collectible Nintendo figures with NFC functionality that allows them to interact with many games on the Nintendo Wii U, Nintendo 3DS, and Nintendo Switch.
members -
Join us to find out and share game deals for the Playstation 4. Save money on games and accessories here!
members -
Console Deals has a big collection of Video Game Deals. We share all the deals instantly. Make sure to join.
members -
Welcome to the gamestop buck the bunny subreddit. This sub reddit is abandoned. Rules 1: Gamestop bunny mascot stuff only. 2: Age 13+ allowed only.
members -
A community for players of the Pokemon Trading Card Game to show off pulls and discuss the game.
members -
Welcome to the home of Hasbro's Marvel Legends line of action figures and replicas on Reddit! This is THE place for all things MARVEL LEGENDS: news, discussions, release dates, first-looks, photography, displays, customs, Haslab, kit-bashes and anything else related to this incredible line. We pride ourselves on being one of the chillest communities on Reddit, so we ask that you READ THE STICKIED POST, abide by our rules, and report any issues promptly. Have fun. Excelsior!
members -
Join us for action figure discussion, news, stock alerts, deals, customs, photography, and more!
members -
Loopring Foundation is a blockchain research organization building protocols, infrastructure, and user-facing DeFi products for the future of finance. They operate their products atop an Ethereum zkRollup Layer2 Exchange & Payment Protocol (v3), the Loopring Protocol. These products include the Loopring Wallet app, an Ethereum L1 & L2 social recovery smart wallet, the Loopring Layer2 Decentralized Exchange (DEX), a non-custodial orderbook & AMM-based zkRollup L2 DEX, and the Loopring L2 Relayer.
members -
The central hub for all news, updates, rumors, and topics relating to the Nintendo Switch. We are a fan-run community, not an official Nintendo forum.
members -
This subreddit is about finding and sharing the best deals for the Nintendo Switch, its games, and its accessories!
members -
You have found the place. We don't moderate (much). Enjoy actual free discussion.
members -
The GMEdd.com subreddit fosters productive discussion, analysis, and speculation amongst all GameStop investors.
members -
Deep Dive into GME is dedicated to the provision & discussion of truthful information related to GameStop stock ($GME)
members -
Memes! A way of describing cultural information being shared. An element of a culture or system of behavior that may be considered to be passed from one individual to another by nongenetic means, especially imitation.
members -
Welcome to the new WallStreetBets! This is not just about the YOLO. This is about winning.
members -
A subreddit for people interested in physical editions of Nintendo Switch games
members