Quote:
Originally Posted by melonpapes
Lets say the price of bananas is 10 dollars, and we have a bunch of apes and snakes.
The snakes are betting on the price of the bananas to go down, so they borrow a bunch of the bananas from the apes on Monday, sell them right away for 10 dollars each, knowing/hoping that the price of bananas will be lower than 10 dollars on Friday when they have to pay them all back to the apes (shorting), hoping to make a profit on the difference.
The next week, the apes, recognizing this, decided to buy up all the bananas themselves, making the price go up. This forces the snakes who borrowed on monday to buy back their bananas at a loss, making a profit for the apes.
The apes are reddit and the snakes are the hedge fund managers
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easier tl;dr
wall street placed a bet that the stock would go down
internet placed a bet (bigger than wall streets) that the stock would go up
size of the bet determines how much the stock goes up or down.
the stock went up
internet placed another bet that the stock would go up
wall street frantically also betting that the stock would go up, to cover their losses.
Causes the stock to go ridiculously high.
Mainstream media is starting to pick up massively on this news that's been happening for the past week or so, because political figures are starting to get involved by pointing fingers at faults in the system, and blaming one side or another for misuse of stock trading, even though this system is literally what has been historically keeping the rich 'RICH', for decades.
There's also growing concern with some stock trading web services halting trades of certain volatile stocks like AMC & GME outside of normally halted hours (GME being the stock in question for the media highlight) in that they could be siding with one side of the scale or another, a.k.a., possibly rigging the bets in favor of one group or another. Since it's preventing people on one side from making bets in some places, but not restricting people from making bets in other ways. Notably, fingers pointing at Robinhood, and TD Bank being the ones getting press coverage in that department.