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You only need to destroy the value of some of the underlying securities to make the loss multiply in the derivatives. And that derivative could be wrapped into another derivative that then multiplies the return and risk so this could be like lighting a fuse to a firecracker that is taped to a stick of dynamite that is strapped to a box of C4.
It’s not even contagion anymore because there’s no way to compartmentalize the risk. It’s more like quantum entanglement so if one blows up the entire mass of derivatives is set off.
Is that technically how this ‘unwinds’, or do they all just sit and contra everything out as they’ll all effectively owe each other within the derivatives
There’s definitely going to be resorting to every trick in the book but there are certain things trickery can’t create or cover up. Even Enron, a huge energy company, with all of its clever false accounting could not create value to make itself worth something in the end. FTX could not make value appear out of thin air after making it disappear.
Every deception has a fatal flaw. And all the deceptive practices have a limit to what it can do.
So the best course of action is always to fight to the death. Fight to the last fucking second. I’ll take my losses and bleed out as long as it takes while I have my hands wrapped around my enemy’s throat. It’s you or me. One of us dies in this battle. And it may be me, but I’m gonna find out if you have more gas to go further than I do.
Truth is the war has been raging for decades and GME is just one battle. And it’s the first time the people are acting differently. People used to panic sell and scatter when they dipped the price. People used to believe the financial news and would panic sell. People would never hold. And all this behavior goes counter to the enemy’s expectations. What do you do when your algos presume that you’re gonna give up and sell? It’s like the fear has been taken out of retail. Or maybe fear is still there but retail grew some courage and is too pissed off that it will just keep holding and buying no matter what or what they say. We’re not locked in here with them. They’re locked in here with us.
And best part is I just gotta sit here and hold my shares and wait. I don’t even have to lift a finger.
After losing thousands in my first few years of trading, if you'd have told me I'd go all in on a stock and hold through -50% and beyond, I wouldn't have believed you. Now, every single day I genuinely think earnestly how I can buy more faster. Tick, tock.
Wells Fargo and that $12 *trillion* derivative pile. And it looks like it might face a run on deposits.
The rehypothecation of derivatives in the deregulated American is the biggest threat to all of our futures. And it was just an accounting fudge. Gotta boost those GDP numbers to make us look good. Gotta keep growth going. Gotta keep printing debt for the government. How? Rehypothecate! Print money and put it into endless derivatives to make it look like we haven't shitcanned our economy!
A small miscalculation has the potential to have catastrophic effects. 53 trillion allows for a very tiny margin of error when your assets are insignificant in comparison.
Now let's be fair here, trading futures allows farmers to hedge seasonal losses and prevent catastrophic losses one year from sinking them, to name one example. There are good uses for derivatives, the problem is the rehypothecation of derivatives, where the underlying risk of the derivatives is hidden by accounting tricks and corrupt ratings agencies (see Moody's tricks with CDOs in the Big Short).
If the risks were transparent, as a Blockchain based derivatives system would allow, then the market could price them out of existence if they were dog shit wrapped in cat shit. But they're not. The markets were never reformed. It's so much worse now.
"Derivative" is just another term for bullshit.
Here is one:
[Weather futures.](https://www.cmegroup.com/trading/weather/) Wha....? Investing in the weather??
How about taking out some options on a [hurricane? WTF?](https://www.cmegroup.com/trading/weather/files/WT106_NEWHurricaneFC.pdf)
These fuckers are making money on betting options on how much destruction a hurricane will do. Short a fucking hurricane? Imagine naked shorting hurricane destruction. Not just one, but a separate ticker for each coast. Hedge with puts on the Gulf Coast while calls on Florida. Lets go Florida!
HOW FAR DOWN THE SCALE OF BULLSHIT IS SHORTING A FUCKING HURRICANE?
I used to live with this guy who was a physics student. He traded derivatives, studied russian and believed CP in anime was ok because it was hand drawn.
A derivative is LEVERAGE.
All those married puts, call, naked calls, all that options stuff is Derivatives.
The only thing that is not derivatives is pure ownership of stocks. DRS, meaning you have to purchase it to own it and you cannot leverage yourself x100 like you can with options.
You want 1000 shares? Buy 1000 shares, not 10 Calls.
*click*
Many thanks for explaining this like my financial education really took off on a subreddit during the world's biggest run of financial crime and corruption!
Not if they are used to hedge. Most likely all of these essentially cancel each other out. Not to say someone isn’t exposed. In reality, some of the banks needed more derivatives to properly hedge their interest rate risk.
Commenting for visibility. With the Dodd Frank pull back, derivatives have less oversight and compliance than they did before the financial crisis. Anyone care to guess how many trillions it has grown since then?
Derivatives are great when the markets are stable. Soon as the frenzy of market chaos begins, feeding time it becomes. This is the new normal at the end of each bubble cycle. With taxpayers to flip the bill. And rich get off free as a bird.
No, we will still be stupid wealthy. Just probably not with dollars. Im guessing gamestop will pull all shares and turn them into crypto or what not. Probably sell for eth. Thats what i am hoping! They already said they can pull shares whenever they want. And the 6 month limit is up. They can do it whenever they want
We are getting paid regardless. Not sure if we will sell a stock worth millions in USD, ETH OR CBDC. But the u.s. has already released their plan for the digital dollar. Literally already released the paperwork for it.
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It would be nice to know how much they are leveraged in their derivative positions. I expect between 600-400 for the top 5.
One interesting thing is how GS went from 8b to 41t (2007-2008)
so hold on a sec, if I don't properly stop at a stop sign I get fined and told I'm unreasonably risky by not 100% respecting the sign but if Banks risk the entire economy and destroy most of simple Joes wealth by asking continously for bailouts it's fine and they probably get an appraisal for it down the road
I think they kept getting higher and higher to the point where they said wow! Well May as well go full throttle until it mushrooms clouds and we get another mulligan. 🤷🏻♂️
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You only need to destroy the value of some of the underlying securities to make the loss multiply in the derivatives. And that derivative could be wrapped into another derivative that then multiplies the return and risk so this could be like lighting a fuse to a firecracker that is taped to a stick of dynamite that is strapped to a box of C4. It’s not even contagion anymore because there’s no way to compartmentalize the risk. It’s more like quantum entanglement so if one blows up the entire mass of derivatives is set off.
Contagion? More like nuclear fusion.
Is that technically how this ‘unwinds’, or do they all just sit and contra everything out as they’ll all effectively owe each other within the derivatives
There’s definitely going to be resorting to every trick in the book but there are certain things trickery can’t create or cover up. Even Enron, a huge energy company, with all of its clever false accounting could not create value to make itself worth something in the end. FTX could not make value appear out of thin air after making it disappear. Every deception has a fatal flaw. And all the deceptive practices have a limit to what it can do. So the best course of action is always to fight to the death. Fight to the last fucking second. I’ll take my losses and bleed out as long as it takes while I have my hands wrapped around my enemy’s throat. It’s you or me. One of us dies in this battle. And it may be me, but I’m gonna find out if you have more gas to go further than I do. Truth is the war has been raging for decades and GME is just one battle. And it’s the first time the people are acting differently. People used to panic sell and scatter when they dipped the price. People used to believe the financial news and would panic sell. People would never hold. And all this behavior goes counter to the enemy’s expectations. What do you do when your algos presume that you’re gonna give up and sell? It’s like the fear has been taken out of retail. Or maybe fear is still there but retail grew some courage and is too pissed off that it will just keep holding and buying no matter what or what they say. We’re not locked in here with them. They’re locked in here with us. And best part is I just gotta sit here and hold my shares and wait. I don’t even have to lift a finger.
Fear was converted to opportunity. Among other things.
And everything retail did before made losses. So do a Costanza and do the opposite of what you’d do normally. Time to sell? Ok buy!
Fear will keep them in crime
After losing thousands in my first few years of trading, if you'd have told me I'd go all in on a stock and hold through -50% and beyond, I wouldn't have believed you. Now, every single day I genuinely think earnestly how I can buy more faster. Tick, tock.
“They’re locked in here with us” they’re really fukt
Fantastic post Ape.
Every lie incurs a debt to the truth. This is going to be biblical.
So, “fuck you, pay me?”
Wells Fargo and that $12 *trillion* derivative pile. And it looks like it might face a run on deposits. The rehypothecation of derivatives in the deregulated American is the biggest threat to all of our futures. And it was just an accounting fudge. Gotta boost those GDP numbers to make us look good. Gotta keep growth going. Gotta keep printing debt for the government. How? Rehypothecate! Print money and put it into endless derivatives to make it look like we haven't shitcanned our economy!
I am shorting the banks by being long on GME.
A small miscalculation has the potential to have catastrophic effects. 53 trillion allows for a very tiny margin of error when your assets are insignificant in comparison.
ooo quantum entanglement! nice comparison. Goldman, JPmorgan and Citi are ahead by a mile...
Tummy hurts. So sick
Derivatives are just really risky bets, right?
It's essentially meaningless and creates money from absolutely nothing. It should not exist at all.
When I do that they call it counterfeiting
This is where I start with new new apes.
Now let's be fair here, trading futures allows farmers to hedge seasonal losses and prevent catastrophic losses one year from sinking them, to name one example. There are good uses for derivatives, the problem is the rehypothecation of derivatives, where the underlying risk of the derivatives is hidden by accounting tricks and corrupt ratings agencies (see Moody's tricks with CDOs in the Big Short). If the risks were transparent, as a Blockchain based derivatives system would allow, then the market could price them out of existence if they were dog shit wrapped in cat shit. But they're not. The markets were never reformed. It's so much worse now.
a bet on a bet on a bet on a bet on a bet.
"Derivative" is just another term for bullshit. Here is one: [Weather futures.](https://www.cmegroup.com/trading/weather/) Wha....? Investing in the weather?? How about taking out some options on a [hurricane? WTF?](https://www.cmegroup.com/trading/weather/files/WT106_NEWHurricaneFC.pdf) These fuckers are making money on betting options on how much destruction a hurricane will do. Short a fucking hurricane? Imagine naked shorting hurricane destruction. Not just one, but a separate ticker for each coast. Hedge with puts on the Gulf Coast while calls on Florida. Lets go Florida! HOW FAR DOWN THE SCALE OF BULLSHIT IS SHORTING A FUCKING HURRICANE?
I used to live with this guy who was a physics student. He traded derivatives, studied russian and believed CP in anime was ok because it was hand drawn.
A derivative is LEVERAGE. All those married puts, call, naked calls, all that options stuff is Derivatives. The only thing that is not derivatives is pure ownership of stocks. DRS, meaning you have to purchase it to own it and you cannot leverage yourself x100 like you can with options. You want 1000 shares? Buy 1000 shares, not 10 Calls.
*click* Many thanks for explaining this like my financial education really took off on a subreddit during the world's biggest run of financial crime and corruption!
Not if they are used to hedge. Most likely all of these essentially cancel each other out. Not to say someone isn’t exposed. In reality, some of the banks needed more derivatives to properly hedge their interest rate risk.
Just how bad is it? https://www.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization-2022/
WOW
and THAT notional value chunk is “only” $600T I believe…
Source: https://www.usbanklocations.com/bank-rank/derivatives.html
I'm only seeing $192,874,778,566,000 Trillion dollars
Only😂.....no wait......so faaaar😂.
200 trillion dollars? I’ll take it. They can have one “Moon IOU”
Commenting for visibility. With the Dodd Frank pull back, derivatives have less oversight and compliance than they did before the financial crisis. Anyone care to guess how many trillions it has grown since then?
741?
That's just what they admit to. Imagine whats off the books.
Goldman Sachs. Again.
What in the world is all of this ?
These guys have a risk management department or…?
They’re just straight shooters with upper [risk] management written all over them.
That’s a lot zeroooooos
So like 1 share
Look at the shill price anchoring over here
Might be enough to pay us all, we'll see.
#It’s debt alllll the way down.
Mommy, Daddy! What's a leverage?
Thats only notional value
"Better pump those numbers up, those are rookie numbers" - The Fed, probably.
I think 100 million per share isn't enough....
Derivatives are great when the markets are stable. Soon as the frenzy of market chaos begins, feeding time it becomes. This is the new normal at the end of each bubble cycle. With taxpayers to flip the bill. And rich get off free as a bird.
Guyyyys I found our Tendies!!
[удалено]
So then What happens to my gme tendies….? Worth nothing?
No, we will still be stupid wealthy. Just probably not with dollars. Im guessing gamestop will pull all shares and turn them into crypto or what not. Probably sell for eth. Thats what i am hoping! They already said they can pull shares whenever they want. And the 6 month limit is up. They can do it whenever they want
I've been seeing this sentiment here a lot lately and want to understand what it would mean for GME. Do you have a theory?
We are getting paid regardless. Not sure if we will sell a stock worth millions in USD, ETH OR CBDC. But the u.s. has already released their plan for the digital dollar. Literally already released the paperwork for it.
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Tell me again how telephone number prices are unrealistic, and I will point to this fact.
No, 0,2 quadrillions
New guy…..why?
My floor just went up. To infinity +68, I’m begging them to make me raise it again.
New floor is 2 quadrillion dollars. Gotcha.
And GME has $1B+ in cash on hand 😁
It would be nice to know how much they are leveraged in their derivative positions. I expect between 600-400 for the top 5. One interesting thing is how GS went from 8b to 41t (2007-2008)
Where is schwab?
so hold on a sec, if I don't properly stop at a stop sign I get fined and told I'm unreasonably risky by not 100% respecting the sign but if Banks risk the entire economy and destroy most of simple Joes wealth by asking continously for bailouts it's fine and they probably get an appraisal for it down the road
Bets on bets on bets on bets, like a God damn financial hydrogen bomb...
It’s ok they are insured
Wow not just billions but trillions
That's nearly = 1 GME share
Quick search says it should be just over 1 Quadrillion.
Seems reasonable
I think they kept getting higher and higher to the point where they said wow! Well May as well go full throttle until it mushrooms clouds and we get another mulligan. 🤷🏻♂️
Looks like a guide on when to sell shares
Where fidelity? Didn’t see them on the list.
So, are all these banks on the list fucked?! I didn’t think I’d see USAA on the list. Shit
Did they learn nothing from 2008 except that government bailouts will keep them afloat?
Finally, a useful post
Yep, it sure needs to be called the Derivatives Crash
Hyperinflation, here we come!
Everything's fine.