GME Short Squeeze Explained -WallStreetBets vs Hedge Funds.

GME Short Squeeze Explained-Stock Market Manipulation By Hedge Fund Billionaires vs WallStreetBets

Short Squeeze Explained-Stock Market Manipulation

GME and AMC Short Squeeze Explained-Did Retail Traders Change The Stock Market ?

For someone who isn't into The Stock Market or aware of how it works they must have missed the opportunity to make insane gains from Reddit users “WallStreetBets” skyrocketing the price of Gamestop stock and causing hedge funders a great amount of debt and chaos.

How Does The Stock Market Work ?

There is different types of traders and styles to investing: Day Trader- Buy and sell a stock within that same day whether it be in 5-10 min or by the end of the trading day Swing Trader- Buy a stock and hold onto it for days weeks or months then sell their position. Positional Trader-Hold long or short positions based off of the stocks performance for 6 months to a year. Long Term Investor- Any stock held for more than a year. Options Trading- Borrow 100 shares placing bets on it trending up or down

How to Get Started in The Stock Market ?

If you're interested in the stock market and want to start trading it’s in your best interest to gain some knowledge from educational books. Other than taking calls from online day traders on your first day in the market. After gaining some education on the stock market your next step would be to set-up a brokerage account. Below are a list of brokerages to choose from:

  • Robinhood
  • Webull
  • TD Ameritrade

WallStreetBets on GME and AMC

Once you're trading and feel as though you want a community of other traders to get ideas and trades from you'll see there's a rally of retail traders under various forum “trading groups”. There are platforms like Stocktwits,Private Discord Groups,and Reddit communities. One of these groups being “WallStreetBets'' whose reddit users made history with GME and AMC. WallStreetBets reddit forum holds millions of members whose daily numbers are up to 800,000. With those numbers the amount of influence one has over the market is uncontrollable which led to the GME and AMC spike.

What Is Shorting And Why Did Hedge Funders Do It ?

Short selling: An investment of trading strategy that speculates on the decline in the stock or other security price advance strategy that should only be taken by hedge funds or experienced traders. Short selling can only be done by a margin account which is leveraged money borrowed from a broker. Hedge funds that held these margin accounts and were short selling GME and AMC were Citadel,Melvin Capital, and Point72.

WallStreetBets Vs. Hedge Funds

WallStreetBets noticed the short selling of these stocks by hedge funds and decided to go against causing a short squeeze.This got the attention of other trading group forums by seeing the price of these stocks rise and became a rally of support. The downfall came when brokerage Robinhood ruled against forum traders by halting these specific stocks to be traded.Which caused GME stock specifically to fall dramatically from $400 down to $122 within the span of an hour due to the suspension by brokerages and traders panic selling their shares.Which benefited hedge funds, the amount of people panic selling and Robinhood restricting their users in purchasing more shares for days.

Advice For New Traders

After seeing the downfall and what comes with riding the wave off a meme stock it is important to educate yourself before diving into a brokerage account and blowing money that you can't afford to lose. Always have a stop loss in mind when getting into a trade or have a practice stimulator with paper money not your own. Educational websites on trading:

  • Investopedia.com
  • Marketwatch.com
  • StockMarketwolf.com