I expect a strong resistance line for $GME at $420.69, there's no way every WSB-tard didn't put a sell order there so they could post a screenshot ๐Ÿ˜‚๐Ÿคฃ
Another fun thing is that as $GME's price ๐—พ๐˜‚๐—ฎ๐—ฑ๐—ฟ๐˜‚๐—ฝ๐—น๐—ฒ๐—ฑ, cheap out of the money puts two weeks from now (which yours truly may have dabbled in) became ๐—บ๐—ผ๐—ฟ๐—ฒ expensive. The market says that the higher it soars the faster it will fall. Image
Yep. If you have a giant short you need to set an alert for your target being mentioned on Reddit that would automatically trigger buying enough far-out call options to protect you. If Melvin was too slow or greedy to do this they deserve what happened.
CNN takes the early lead in the competition to write the absolute dumbest fucking story about GameStop. Expect more entries to come as the one finance guy on the news team gives up trying to explain terms like "short interest" and "covered calls" to political pundits. ImageImage
On one hand, I want to encourage everyone to learn about finance because it's exciting and totally accessible. On the other hand, 90% of finance takes today, especially those with the words "front-running", "bailout", or "like the '08 crisis" left you dumber for having read them.

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More from @yashkaf

29 Jan
I got three smart friends on a call to try and make sense of the $GME situation. This thread is my current best model.

TL;DR: The longs are playing the short game, the shorts are playing the long game.
Who's long GME? Some combination of WSBers, FOMOists, and hedge funds. The WSBers have no fear and will sell at $0.01 or on the moon when the shorts are gone. FOMOists may panic if GME slides but they're probably a small fraction. Funds will try to get on top and may have hedges.
The interesting Q is who's short. Someone who's short for 50% of their bankroll is vulnerable to a squeeze, but at 2% they can hold on forever. Current borrowing fee is 31% APR, or 0.1% a day. It's not that bad. So if the shorts are distributed they can wait it out.
Read 10 tweets
28 Jan
On 12/31 the short interest on GME was 71M shares (out of 69M outstanding ๐Ÿคทโ€โ™‚๏ธ). In January a billion (!) shares of GME have been traded, Melvin and Citron closed their positions, and the short interest is... still 71M.

(Yes, this is a Fintwit account now)
Does it still count as a short squeeze if the original shorts got squeezed out but then millions of new short-sellers ran in to take their place on the battlefront? Has this ever happened?
This is not about two small funds caught in a trap anymore, it's an all-out war of attrition with $20B staked on either side. My guess is that most of it is institution $, WSB being a small part of the longs. When the line breaks, the big boys will dump faster that the Redditors.
Read 4 tweets
24 Jan
"All this predictive processing in Rationality sounds like boring nerd bullshit."

OK, how about the fact that it opens the door to REVELATION within the paradigm of Rationality?

@Conaw, @tweetsbenedict, and @Aella_Girl, I think you'll like this mini-thread.
Rationality sets the stage by centering the map-territory distinction. You don't have to believe in miracles out in intersubjective reality to have crazy things in your map. But Rationality preaches incremental, Bayesian updates with every piece of data. Our minds can't do that.
PP says that we change our minds like Kuhn's theory of science. Errors of prediction accumulate until a great paradigm shift changes the top models all at once. It happens even at small scales, with basic perception: putanumonit.com/2021/01/23/conโ€ฆ
Read 9 tweets
18 Dec 20
๐…๐จ๐จ๐ฅ๐ž๐ ๐›๐ฒ ๐‘๐š๐ง๐๐จ๐ฆ๐ง๐ž๐ฌ๐ฌ ๐ข๐ง๐ญ๐จ ๐‘๐š๐œ๐ข๐ฌ๐ฆ
A thought experimental thread
๐Ÿง ๐Ÿงช๐Ÿงต

Does intuition enlighten or mislead? Depends. In ordered contexts with fast feedback (chess), intuition works well. In chaotic multivariate contexts (penny stock picking) it fails.
The problem is that in the latter case you'll still think you're learning things, overfit transient patterns, and be overconfident in your future prediction ability. This is @nntaleb's main point in "Fooled by Randomness".

Now let's bring predictive processing into the picture.
PP tells us there are three ways you make you predictions match sensory input:
1. Change your underlying models and their predictions based on what you see.
2. Change your perception to fit with what you predicted.
3. Act on the world to bring the two into alignment.
Read 15 tweets
16 Dec 20
Last year I did a @threadapalooza of overly general life advice. This year it's time to focus on what's really important and give the people what they want.

1 like = 1 thing you should know about the best game no one besides me is playing, Random Dice!
Image
1. Random Dice is a competitive, real-time, deck building tower defense game. All four of those attributes are common to many games, but it's their combination that makes RD special. You have to be good at strategy AND quick thinking, analysis AND intuition, to be good at it.
2. Important up top: it's FtP, but you'd probably want to spend about $50 to enjoy it fully. I've spent around $100 and 300 hours on it, which is a pretty good deal. Or, you can read this mega thread and git so gud you can play forever with no more spend (as I am at this point).
Read 35 tweets
4 Nov 20
The market moved about 1% back and forth on a 10% swing in election odds, implying that a Biden presidency is worth a 10% higher stock market than Trump.
If you remember, the same thing happened in 2016 with the market moving against Trump odds all night until 4 am on election night when everyone decided Trump is actually good for stocks and it shot up.
putanumonit.com/2016/11/16/fliโ€ฆ
There's was some talk of the market pricing in a contested election in 2016 but those numbers never added up. That night in was the clearest example I've seen of the efficient market hypothesis being violated. Fortunes will be made and lost tonight as well.
Read 5 tweets

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