Since 22 January wallstreetbets short squezze is the talk of the town, allow me no to write a long post about the whole story.
Fact: In naked short sale investors short the stock without actually borrowing it, making it much easier to drive down the share price of a company. In 2008 SEC announces new set of rules banning 'naked' short selling on all public companies. "These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling," SEC Chairman Christopher Cox
And here we are, 2021, Melvin Capital and some other assholes from Wall Street are 139% naked shorting a public company. And suddenly some reddit "idiots, meme folks, gamer-low-life stupid rednecks" are coming and short squeezing Gamestop stocks, and guess what, they say wallstreetbets folks are manipulating the market LOL. THEY in Wall Street are the folks who keep manipulating the market with speculation and spreading lies trough the media, pushing brokers to deny buy orders. Short squeezing is not an illegal action, but they think stock market is just their playground, now small people proved they are wrong. I just hope they will suffer huge losses and don't even learn the lession, wsb guys are heroes.
SEC said they actively monitoring the volatility in options, I'm really curious what will be the end of this story. If I had to guess I would say they will find a way to punish investors referring to collaboration or something, even if we are talking about individuals, who have the right to buy options and hold it if they want to infinitely. And guess what, Melvin Capital will not be punished for breaking the rules! Fuck them!
To be honest, I really respect this movement, however I think in the end both sides will suffer great losses and everything returns into the good ol' way, because that's how greedy billionaires are ruling the world (at least yet).