[FabHK]

> Thereby, when you buy current GME stock, the stock also has an attached buyer that has to buy that stock back, at ANY price.

Yeah, but as I've explained elsewhere: Suppose long interest is 240% and short interest 140% (leaving net supply of 100% shares). Then, even if redditor HODLers hold 99% of actual shares, and won't sell them, it's enough if there is 1% free float, and the 141% remaining longs (who have lent out their shares to the shorts) are happy to sell at the current inflated price. The shorts can then close out their position with 140 of those 141 longs, and then you're left with 99% shares held by redditors, and 1% held by someone else who might want to sell at this point.

To squeeze the shorts, you need to control 100% or more of the long interest. I doubt that's the case here.

[cccc4all]

This post can explain why you only need smaller percentage to squeeze short sellers.

https://wallstreetplayboys.com/amc-gamestop-and-nokia-why-it...

The bottom line, everyone knows they can sell to short sellers at ANY price, because the short sellers have to buy at ANY price. Why would anyone sell to short sellers at less than ANY price?

[chii]

> because the short sellers have to buy at ANY price.

no they don't. They can bankrupt, and default on their contractual obligations. And if they are smart, what they will do today is setup a structure that protects their existing assets from seizure, and then short GME, and then default if it doesn't turn out well (or gain massive profit if it does fall).

[cccc4all]

That's the funny thing, that's not what's happening. It would make sense for those companies to declare bankruptcy in these scenarios. Instead, these short seller companies are being propped up by even bigger companies and the entire financial press is pushing FUD propaganda to convince normal people to sell.

This has never happened before. Why is this happening the way it has for past week?

[onedognight]

From what I read on WSB (caveat emptor), the broker (JP Morgan) is on the hook if the shorts go bankrupt. JPM needs to prepare for that possibility.

[javitury]

Price is a function of supply and demand. Shorting 140% of the stock increases supply by 140% and demand by 140%. It looks balanced, but there is an asymmetry in terms of pressure to close positions.

Those shorting shares have to pay interest, place collateral if price goes up and need to buy back those shares regardless of market price. The ones holding shares don't have that pressure and their losses are bounded.

If options are used, the effect depends on how the price of the underlying moves. Generally they just have a multiplicative effect, the losing side has to increase collateral.

A particularity of shorted calls is that losses are unbounded.

[devoutsalsa]

If the short position’s larger than the float, the squeeze will get sqouze.

[FabHK]

No. As I’ve explained, the crucial cutoff point is that the squeezers have to hold more than 100% of the long interest to squeeze the shorts. Whether the short positions add to 90% or 110% of the net supply matters only a bit.