Gme | easy explain of gme gate (shorts squeeze)

Last week very important week related to the capital markets. The simple explanation of what happened (and incredible but real) was that members of a group called wallstreetbets (WSB) on the Reddit platform, organized to raise the shares of Gamestop (GME).

WALLSTREETBETS

The Wallstreetbets group currently has 7.3 M registered users and was created in 2012. People usually talk about different investment strategies, asset analysis or sharing the joys and frustrations of the investments that members make. Due to the size of participants in the group, the power of these organized individuals could have a great impact.

Source: Tao of trading

PREMISE 1: THE HATE OF THE "HEDGE FOUNDS"

The GME choice as the stock they decided to raise was not random. This was because in the group it began to circulate that several HEDGE FOUNDS had carried out large operations in "SHORT" with GME shares. A SHORT POSITION implies taking a trade hoping to get a return when the shares fall in price.

Then, in the group, as a common posting for the exchange of an investment idea, the idea of ??massively buying GME shares was posted to raise the price and make the hedge founds that traded lower than fall into a "SHORT SQUEEZE". This idea had massive appeal in the group and quickly thousands of users bought GME, causing the price to rise abruptly. In a few days it rose more than 1000% and made the HEDGE FOUNDS lose millions who were betting on the downside.

PREMISE 2: IF YOU STAND, I STAND

For prices not to plummet rapidly downwards after the rises, it was necessary that those who had bought and had assets in their portfolio with a spectacular yield does not sell them and thus avoid a crash.

The group featured funny posts about the situation of wallstreetbets members who had GME shares. For example, a user commented that his family demanded that he sell, since it would change their life and he would not sell in order to “make the hedge founds pay”.

Source: Reddit - Wallstreetbets

The story continued to DOGECOIN in the crypto world and it is likely that it will continue in the coming weeks with different news. Its without a doubt was one of the most important events so far in 2021.