A lot of Redditors hate the Reddit IPO | Reddit warned us that its users were a risk factor, and boy do they sound excited about shorting its stock.

L4sBot@lemmy.worldmod to Technology@lemmy.world – 990 points – A lot of Redditors hate the Reddit IPO
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A lot of Redditors hate the Reddit IPO | Reddit warned us that its users were a risk factor, and boy do they sound excited about shorting its stock.::Reddit seems like a likely candidate for a meme stock. But the actual reaction suggests that r/WallStreetBets isn’t going to send the stock to the moon.

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Reminder that shorting is a high risk play and you should never make investment decisions out of spite.

The market can remain irrational longer than you can remain solvent.

A reminder that the stock market and any kind of high level money market of any kind including digital money .... is a rich man's game where poor are by design destined to lose.

This is a gross over simplification. Yes, rich people can have higher risk tolerance, but that doesn't mean people shouldn't be going long on index funds and otherwise safe, low risk investments for retirement with what they can afford to.

Yes, rich people can have higher risk tolerance

It's not just risk tolerance. The very rich can manipulate the market in ways that the poor can't.

You don't need to manipulate markets to dollar cost average the S&P500 for 40 years and retire. This is a get rich slow scheme that's worked since the inception of index funds.

Yeah, and some rich people may do that. But, other rich people aren't satisfied with the returns of an index fund, so they'll manipulate the markets to get higher returns.

I don't know what you're trying to get at. The original comment stated the stock market is a rich man's game that poor men are designed to lose. I pointed out that anyone with extra income can take advantage of the stock market and not lose. Just because rich people can take advantage of market manipulation doesn't mean poor people have to lose.

And then listen to every asshole yell 'but think of their retirements!!1!' when the stock market shits itself.

Fuck this system. It's original intent is way long gone, and we should stop pretending it's helping anyone but the rich.

Instructions unclear, purchased Lemmy stock using Amazon gift cards

100%, this is a trap being set for retail investors... not touching this even if I had a 1000ft pole.

Playing the stock market at all is a form of gambling. You should never gamble money you aren't completely willing to lose.

And with shorting there's no upper limit to what you can lose.

Not true

It is true.

You buy a stock for $30. At worst it gets to $1 and you lose $29.

You short a stock for $30. There is no upper limit to how high it can go.

Yeah, if there's a "Superstonk" style event, the shares might jump to $1000 per share.

Say you shorted 100 shares. If you shorted it at $30, the absolute maximum you could make is just under $30 per share, or $3000. But, if it jumps to $1000 per share, you would lose $970 per share, and owe $97,000.

Maybe it's not technically possible for there to be "no upper limit" to what you could lose, but you could easily lose many multiples of the maximum possible gain.

In theory that’s true but you’ll get liquidated at some point.

No. There are lots of ways to short a stock which just means betting that a stock will fall. If you buy Puts you go short, you can only lose the money you spent on the Puts. What you are talking about is unhedged short selling but that is far from the only method to short a stock.

I think this company is deeply and uniquely incompetent and will never deliver on its objectives.

To quote XKCD's "Engineer Syllogism":

  1. I am good with numbers and math.

  2. The stock market is mostly numbers and math.

  3. Therefore, I would be -- wait, where did all my money go?

It will be about a week until options come out. A put option simulates renting 100 shares of a stock over a time period, and collecting the difference between the strike price you pay for and the lower price if there is one. If the price ends higher, you lose the rent you paid.

It would be hard to get that many separate entities to all start shorting a stock all at the same time. Especially on a well known entity that may have quite a bit of action.

Yeah but I would short just a little, considering it will have hard time going 100x. Tbh 10x would be as difficult, but gotta play safe.

No you should make investment decisioms purely for the fun of it.

Also, WSB has been wanting to short reddit for literally years, so this is barely news.

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