Board 8 > Stock Topic 35

(+) Yeah! (+)

Like I'm not saying get on every stock with high short interest. But if there's a high short interest and the company appears to be growing and doing good things, something is wrong.

SDC has high short interest reported. Smile Direct Club could very well go bankrupt in a few years so yeah I don't see why I'd do that. Don't buy this.
Sundial Growers has a high short interest, they currently bleed money at a very rapid rate and are at risk of being delisted or reverse split if their price doesn't double in a few months. Don't buy this.

BBIG has a great management team coming through, bunch of great catalysts incoming (acquisition of ad placement company that will monetize a rapidly growing short video platform, NFT company spinoff) and doesn't move up/moves down. Yeah you could not buy because the price is bleeding, but why? What is the fear based on aside from the price where you have lots of published data direct from the exchange and reputable data providers saying you shouldn't trust the price? Why will it go down from here?

And here's the thing with those computer programs (at least the ones I helped design, but I would be very surprised if there was a different way to do it that was effective given the nature of the data)

They're all based on machine learning algorithms

It's not as simple as "well just fix the computer program." You need two things for that to happen.

1. Awareness that the algorithm isn't working currently. In the market at large the algorithms are probably still working, so they're probably still able to be exploited by savvy retail.
2. Enough data on a new training/testing set to tweak your algorithm to adjust what it's doing in a way that presumably makes sense. There is a lot of data out there, so certainly plausible, but I'm thinking at minimum you want months in your training set (we had a year and a half I believe-- this was like 15 years ago though), one year removed from Gamestop I have my doubts they've been evolved yet.

Wouldn't the events of last January represent a very significant training set? It wasn't just GME and AMC; many many heavily shorted stocks were way up. I feel like if the algorithms aren't sophisticated enough to have learned from that by now, they probably aren't adding much value to the people using them.

Also if you are basing expectations on the learning speed of AI 15 years ago, uh, things have advanced a lot since then.

It's not about "learning speed" it's about raw size of the data set to learn from. An AI can't make a pattern to base buying and selling logic if there's not enough data to use and test on. We don't have more data now than we did then because the environment is presumably different-- we have less. We can't go back to 2019 and use its data to build a training set for a different retail-driven market, back then we had years and years of back data to tap into.

Yeah you can take a stab at it but you're trading billions of dollars here you don't want to be incorrect. It's probably safer to use the old proven machine learning algorithms for now and just assume most squeezes won't take off like they did and figure out how to game the system gradually with a lot and lot of test runs.

Speaking of this, humans are notoriously bad at evaluating tail risk. If we have an system that produces a consistent return of 10% per year and one drawdown of 95% every 30 years, people will think this is a great system even though it loses money after 30 years. They'll attribute the one drawdown to an "outlier" and ignore it.

I would think that algorithms may be better than humans at evaluating this, although I guess it depends on the goals they are programmed with.

I did think though about something one of the Fed governors said recently - regarding our next "garden variety" recession. He was talking as if those are common and we should expect them once in a while, but although they used to occur every few years, we haven't had a garden variety recession since......1991. Not in my living memory.

Since then we've had only very long periods of growth punctuated by severe recessions (as measured by the market plunging. I wonder if we'll actually get another garden variety recession or if they've been permanently avoided by the Fed's financial engineering which causes no recession in the event the market feels the Fed is willing and able to control the problem or massive plunges in the case the market believes the Fed is either unwilling or unable to control the problem.

Anyway I'm not claiming to be an expert here. I haven't even dabbled in that kinda stuff since 2012. So yeah it's very possible the entire idea is different now-- but the idea of machine learning and training/testing sets, conceptually that hasn't really changed to my knowledge. It has no doubt advanced but the basic concept is the same I'm sure.

But yeah I just know a LOT of the market is automated first hand (I mean it should be obvious it is just looking at it, but I have an idea firsthand of how it's done) and you're probably giving short sellers/market makers more credit than they deserve if you say "well they wouldn't do that because they'll clearly lose money"-- they will make moves that will clearly lose money because on average with a stock market full of stocks to exploit they won't lose money making those moves. The amount of coordination and awareness needed to beat the algorithms is such that they won't lose all that often.

Also there is just a lot of information on BBIG that can't even be boiled down into "data" such that if you've got it flagged as an easy short, the data that it shouldn't be shorted isn't something an AI can really digest. A dividend is coming that has no cash value and must be covered when shorting-- there's no way to feed that into a machine.

So if you want my answer to "why would they do this, it's so hard to make money continuing to short here" the basic tl;dr answer is

"they're not consciously doing it, and right now BBIG is a blip on the radar in terms of the overall balance sheet"

Maybe if it flies to hundreds Gamestop did they'll notice. Until then load up on the cheap.

I'm not saying they would have built a new model on the theory that the environment is now fundamentally different. I'm saying if they assume the environment is not fundamentally different, then the new data should increase the algorithm's estimate of tail risk. And since the damage if that risk is triggered is very high, the decisions may be different. Like if your algo thinks a GME event has a probability of 0, it may think it's okay to enter into those positions. If your algo thinks it happens 1 in 100 years that may be enough to push it beyond its risk parameters.

Lopen posted...

Anyway I'm not claiming to be an expert here. I haven't even dabbled in that kinda stuff since 2012. So yeah it's very possible the entire idea is different now-- but the idea of machine learning and training/testing sets, conceptually that hasn't really changed to my knowledge. It has no doubt advanced but the basic concept is the same I'm sure.

But yeah I just know a LOT of the market is automated first hand (I mean it should be obvious it is just looking at it, but I have an idea firsthand of how it's done) and you're probably giving short sellers/market makers more credit than they deserve if you say "well they wouldn't do that because they'll clearly lose money"-- they will make moves that will clearly lose money because on average with a stock market full of stocks to exploit they won't lose money making those moves. The amount of coordination and awareness needed to beat the algorithms is such that they won't lose all that often.

Also there is just a lot of information on BBIG that can't even be boiled down into "data" such that if you've got it flagged as an easy short, the data that it shouldn't be shorted isn't something an AI can really digest. A dividend is coming that has no cash value and must be covered when shorting-- there's no way to feed that into a machine.

So if you want my answer to "why would they do this, it's so hard to make money continuing to short here" the basic tl;dr answer is

"they're not consciously doing it, and right now BBIG is a blip on the radar in terms of the overall balance sheet"

Maybe if it flies to hundreds Gamestop did they'll notice. Until then load up on the cheap.

I guess that makes sense, and the algos may not have ever actually "seen" what the humans all saw could have happened - the price climbing into the thousands on the strength of actual margin calls in the billions of dollars. So they may not be appropriately evaluating the risk.

Big curve fitters hate novelty. Financial AI stability sounds like a neat problem. As does generating synthetic training data. Maybe create a model of retail trading then iterate with the agent in the loop. Though it would still only be as good as the edge cases, and thus the minds thinking them up.

To be honest I think the data is there to train a machine on when to bail out. Open call interest and volume across all the places you can buy them escalating is probably a red flag that WSB-esque retail is onto your game. I will say that back in 2008-2010 that data wasn't even used to train our AI-- but we were also a VERY small time firm compared to your giants in the game.

I'm not sure "tail risk" is something that can be fed into an algorithm even though it intuitively makes sense.

The other problem is when the short interest is as high as it is now (approaching 35%) and you're still shorting your heart out to keep it down, getting out itself can cause the short squeeze. Which is better for risk management, trying to continue to suppress the price and hoping the underlying company screws it up somehow or retail loses interest, or suffering a smaller loss up front but guaranteeing a loss. I feel like on average the previous strategy is going to make more money, because a lot of highly shorted companies ARE junk, and retail IS fickle in general.

Also I don't think you're grasping how dire this is getting

The cost to borrow is sitting at 360% average on the day, 555% max borrow cost
70% of our volume on the day has been routed through dark pools/short
We're still up $0.21, fighting hard for $3.50.

You can distrust the numbers but among the numbers we get, these are extremely high among their peers and generally occur when something is about to pop, and we've got a ton of open interest on $3.50/$4 this week. News could make this run hard but I suspect this will run before we actually get our news as these numbers can't be sustained for long. (which will make the upward movement from said news that much more violent)

Honestly we just need BBIG to be above $4 on Friday

You'd ideally want them to get to like $3.98. Then you keep your shares to sell more calls next week.

I want them as high as possible

Without news $3.98 looks like a possibility. I have a hard time thinking they can hold it below $3.50 for three more days seeing the stats but you never know. If market as a whole takes a dump that helps. I still think $5 is on the table though. I think if we firmly get past $3.59 we basically run straight through $4 and $5 becomes the number to protect. We'll see though.

Oh shit I am in PYPL

Sorry Nanis. Thats a rough break. Go all in BBIG TPG get it all back, or lose it all.

wow paypal

Sorry about Paypal. That's a big hit for a company with such a high market cap.

what happened with paypal

Looks like an earnings miss.

Google doing well though! I wish I hadn't sold mine back in late 2020.

I remember I had all my money in Google back in like June 2020 and freaked out because it was an an ATH so I took it out for a loss.

The sad thing is both of us would have probably done a lot better just putting all our money in Google and not doing any trading.

Oh, cool, Facebook
I am there too

Yeah I am done. Totally bankrupt

Nanis23 posted...

Oh, cool, Facebook
I am there too

Yeah I am done. Totally bankrupt

I think this is an exaggeration. A 19% drop isn't going to cause bankruptcy on regular shares.

Hi so my name is Mark Zuckerberg
And I am going to change my company name into something new. Meta. That means my company will be a holding company and not just one product. It also means I am looking for the future - the future of the Metaverse. Which is the hot new word on the Internet nowadays.
NFT. Metaverse. All that buzzwords. Like, you know how the market was crazy for bio companies back then in the beginning of the pandemic? that when any company just said the word "vaccine" their shares surged 200%? same thing
Except this shit doesn't work for me because I am failure and everyone hates me and now my shares drop 25% good fucking job

What a useless piece of shit

He also lost something like 30 billion dollars today if it makes you feel any better.

Tough day for NASDAQ

AMZN is in such a good price to buy but after seeing what happened to NFLX, PYPL and FB after earnings...I am not taking this chance

Yeah once again I am controlled by fear

I suspect Amazon is very close to doing a split of their own following Google and Apple (Apple was a year ago now but eh, it still feels due)

Calls are so darn expensive though that I can't afford to make a play on it.

Nanis23 posted...

AMZN is in such a good price to buy but after seeing what happened to NFLX, PYPL and FB after earnings...I am not taking this chance

Yeah once again I am controlled by fear

The fact that you are feeling fear and it's motivating you not to buy should be a pretty strong sign that it is a good time to buy. However, I am boycotting Amazon to the extent I can and that's got to include their stock.

I averaged down more on BBIG. Got my average to $3.46. Set my call strikes to $3.50 since I dont think itll hit that by tomorrow and it got me a couple extra hundred bucks.

Moonroof posted...

I averaged down more on BBIG. Got my average to $3.46. Set my call strikes to $3.50 since I dont think itll hit that by tomorrow and it got me a couple extra hundred bucks.

Feels like you are risking a lot to make a little.

For this week, yeah. I dont plan on it hitting $3.50. I will plan on holding next week and doing another call of $3.50 or $4 and take the premium.

If I can hold long enough for Lopens prediction to come through, I can make 15% on top of whatever premiums I get.

You've got a long established bottom on BBIG. Functional risk is fairly low. If you're aggressively selling 3.5c it's especially low.

I mean yes it could get down a bit below $3, which I did say was a fairly strong possibility this week because that's where the market makers want it, but if it does you just sell a bunch of 3.5c for next week. Very easy to get your cost basis down if you don't care about landing on the moon.

Personally though if I was playing both sides timidly selling puts to get in seems to make more sense than buying shares and immediately selling calls on them.

Lopen posted...

I suspect Amazon is very close to doing a split of their own following Google and Apple (Apple was a year ago now but eh, it still feels due)

Calls are so darn expensive though that I can't afford to make a play on it.

Doubt

Man Im down a ton. Hate thinking I could have bought literally 15% lower than I did. Hopefully BBIG recovers tomorrow or next week so I can get decent premium for a $3.50 call.

Please AMZN don't fuck this up
Save the market
Save me

Its up 13%! Crushed earnings. Hopefully tomorrow is a Green Day.

Thank you Bezos_god

red sox 777 posted...

The fact that you are feeling fear and it's motivating you not to buy should be a pretty strong sign that it is a good time to buy. However, I am boycotting Amazon to the extent I can and that's got to include their stock.

Darn it why didn't I ignore my principles and buy AMZN?!

My days of betting on earning reports are behind me. For now, anyway. I wouldnt have invested.

Hi stock topic

Buy GOFF before the share cancellation (Feb 8 court date) for a super easy 100%+ gain. Mark this post.

I'm buying more at 25 cents. Selling half on the share cancellation, wait for the merger for the rest.

Hope you all have continued doing well. Miss this topic! I'll try and be active here again, just have a lot going on

Lol, Blur! What makes you so confident?

Vanguard still doesnt let me buy penny stocks but I hope youre right.

Moonroof posted...

Lol, Blur! What makes you so confident?

We already know there's a court date to cancel shares. Sharp and his team do their thing and the price soars simply from the canceled shares. Obviously canceled shares = higher market cap for the remaining ones.

GOFF was just in the .50s. I sold half my position in the .40s a little too early but at a 125% gain. 20k+ of realized gains. But the share cancellation will push it a lot higher. Not sure how high, but we'll see. My guess is .70s.

How's the market been treating you lately, Moonroof?

Good luck man. Hope it works out!

I made over $100k on DWAC and then had a good run doing weekly put options for a month or two to close out the year. Since 2022 its been awful though. I think Im down like $60k but hoping that BBIG saves me.

Moonroof posted...

Good luck man. Hope it works out!

I made over $100k on DWAC and then had a good run doing weekly put options for a month or two to close out the year. Since 2022 its been awful though. I think Im down like $60k but hoping that BBIG saves me.

A 100k trade is amazing man. Still haven't had one of those. Think GVSI at the peak was in the 90k gains territory, but of course I didn't sell because I'm waiting for the merger. Sigh. Looks pretty stupid right now and I'm down ALL of that money, but when it goes current I bet it shatters its highs. I'll be fine in the long run. Flipping could have made me a lot more money but ehhh. Sounds like you're still doing well though despite 2022. Mine has been the same.

Current game plan: make bank off GOFF, sell half GVSI when it goes current, throw GOFF profits and GVSI flip profits back in GVSI if it gets cheap again. Hope GVSI is some crazy good crypto merger (we already know Sharp registered the name American Blockchain Inc for it). And we'll see what NFT company GOFF becomes.

Where can we buy GOFF?

Looks like TD Ameritrade will let me if I try, but with a $7 commission for each buy/sell order. I didn't try as I feel like I'm done with playing with individual stocks aside from adding to positions I already have open.