i understand what your trying to say. I’m fully aware of how to make money on stocks as far as going up and down.
but we both know this right.
when you short a stock you have to cover? Yes?
that includes all synthetic shares to right? Yes?
AMC is shorter 150% how is that even possible. It’s possible because of creating shares that don’t exist. Naked shorts. You also have to pay interest on all your real shares and fake shares
if retail owns 80+% of the float and isn’t selling. The numbers show to this day and almost 3-1 buy/sell ratio( by the way how can you still buy stock in this company)
it cost money to short a stock and to drive the price down right? Yes
You said people got “taken for a ride” with GameStop I imagine you mean that in the regular way as you were conned or taken advantage of. GameStop was trading at $17 in January and today is trading at $133 that’s a ride I’d love to be on. AMC in January was $2 today it’s $33 give me one person on this planet who wouldn’t take those results in 8 months.
I'm not sure you understand the options strategy that Citadel had in place. They were not short any shares of AMC according to their 13F. They were long some, but their largest AMC positions were both call and put options. When you buy a call, you are bullish on a stock. Citadel had/has an option to buy AMC in the future for a specified price. If the price goes up and they get to buy it for the lower price. If the price goes down, they don't have to exercise the option, but they have lost their premium they paid for the call.
Citadel also purchased put options which gives them the option to sell AMC in the future at a specified price. If the price goes down they get to force the writer/seller of the put to buy at the higher specified price. If the price goes up, the options expire worthless and they are out the premium they paid for the put.
The only way Citadel could lose on this straddle strategy would be if the price of AMC did not move. Then, both the call and put options would have expired worthless and they would have lost the value of the premiums. This was not a very risky position considering their downside was capped at the premiums they paid and the fact that AMC volatility is a virtual given.
So they weren't betting that AMC would go up or down, they were betting it would not stay the same and they would profit from a move in either direction.
In fact, the people who got hurt on AMC were the people who sold or wrote the call options to Citadel when the price was low and the people who sold or wrote the put options when the price was high. Citadel was neither of those. Obviously those who had uncovered shorts, especially those that were leveraged got hit hard. And all of the meme investors who went long at or near the top took it on the chin as well.
Sorry for the point of confusion when I stated "taken for a ride". I was not clear. Melvin Capital and other shorters got taken for a ride with their uncovered shorts. I doubt there is a hedge fund that didn't take note of that error, and I'm sure they have taken steps to avoid the same error in their funds.