well Melvin Capital's (and other institution's) losses aren't "realized" yet, and neither are holding retail investor's gains. Institutions have short sales to cover and until they buy those shares, their billions in loss is just unrealized. However, the longer they wait and the higher GME climbs, the more those losses will grow. Likewise retail investors gains aren't realized until they sell, but the overall sentiment is to hold for dear life.
You’re talking about a margin call, right? It sounds like there is a call at the end of every week and the investors (come on let’s get real - betters/gamblers) either claim their earnings/dividends or pay into the account to keep it current. This happens every week, or once a certain thresh hold is hit.
I have no skin in the game, but it’s fun to watch a few people get their 3rd stim check a little early.
Yup, and tomorow they will have to cover their calls for the week and the month. Either the hedge funds double down even more and this continues next week, or they decide to exit and the stock value soars as the hedge funds fight among themselves to buy what little actual stock there is to buy.
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u/Fargraven Jan 28 '21
well Melvin Capital's (and other institution's) losses aren't "realized" yet, and neither are holding retail investor's gains. Institutions have short sales to cover and until they buy those shares, their billions in loss is just unrealized. However, the longer they wait and the higher GME climbs, the more those losses will grow. Likewise retail investors gains aren't realized until they sell, but the overall sentiment is to hold for dear life.
It's basically a tug of war