WallStreetBets on Reddit is changing the trading game

WallStreetBets aka WSB is making history

Over the last couple of days, the attention of a group on Reddit called WallStreetBets has increased. With the stock $GME (GameStop) gaining over 3000% in just a couple of months, the group has been in focus. But how could this happen? Is WSB the main force behind the increase, and what is the actual motive? We have tried to find the answers to the questions stated and will take you through this unprecedented moment in time.

So, how could the price increase by thousands of percent in just a couple of weeks? Well, there is a thing called short squeezing. Most of the trading people in the markets know that you can buy stocks, which is also called going long. But not so many know that you can actually sell a stock that you don’t own, also called going short. If you are shorting, you are borrowing assets from someone, and when you want to realize your P/L, you have to buy the stocks that you borrowed back. If the price is higher than you sold them for, you will make a loss, and if the price is lower, you will make a profit. Not too complicated, right?

WSB trapped the short sellers to push the price

What the people on the subreddit WallStreetBets did and is doing is just brilliant. When you borrow an asset, there is always someone on the other end that could require their assets back. If this happens, the short seller is forced to repurchase the asset with a market order. Usually, this is not a problem, but if there is a lack of liquidity, the price will be forced to rise. So what the WSB did was find a heavily shorted stock, which is the perfect target, in this case, GameStop. People bought up all of the stocks pushing the price to around 20$, which forced some hedge funds to cover some of their positions, creating a short squeeze. 

What is next, what to look out for?

Many people are perplexed about these events and are looking to make some quick money. Is there a chance of $GME pushing up to $1,000? Well, it could most certainly do. It could even go higher. Would it be a good investment? It is tough to tell since this is not a regular time. You could make a lot of money, but you could also lose it all. If you never traded before, you should be very careful jumping into the markets and start investing a small amount of money. The best advice that we could give is to start following our newsletter for the latest news on the markets, start reading the subreddit WallStreetBets and try to find some great information sources on youtube to get you started. To sum it all up, we are living in unprecedented times where We The People are challenges the core of Wall Street and the baking system. People are using their collective force to show the world how corrupt the banking system is and are making every hedge firm on wall street sleepless. The main goal of this is not to make some quick money, it is to challenge the very core of our society where the people on wall street have been using their power to steal money from regular people.

Note: We are not financial advisors, accountants or lawyers. Any information provided on this website or via emails is not intended as investment or financial advice. It is merely information based upon our own experiences. The information we present is of a general nature and should merely be used as a place to start your own research and you definitely should conduct your own due diligence. You should seek professional investment or financial advice before making any decisions.