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Thursday, June 24, 2021

An Explanation About Reddit, GameStop, Robinhood, And The Stock Market

An Explanation About Reddit, GameStop, Robinhood And The Stock Market

 

An unexpected situation involved an online forum called Reddit and a couple of other companies on the stock market including Gamestop that is constantly changing every second of every day. Reactions from both sides of the political spectrum criticized the wealthy who have gain billions while congratulating the “army of the little people” who invested small portions of their money into the stock market. In other words, the people at the top basically took out a big hedge fund and lost over $6 billion and the little guys beat them at their own game. 

 

People all over the nation are surprised by the fact that Main Street was able to take down Wall Street.

I will try my best to explain because even myself I had to do a lot of research about the stock market and the terminology behind it.

 

The fact that they conducted this operation successfully was mindblowing. The process of short selling is to go to your broker and borrow the stock and they put it in your account for $200 for example and then you sell it (it’s not your stock, it’s someone else’s stock that you borrowed from the inventory). For instance, the stock might drop down to $100 and you buy it back which means you made money on a difference – $100 per share.

In this case, it didn’t exactly happen this way because the stock went up quickly.

The little guys bought the stocks in volumes which made the prices go up – from $20 to $500 in a week which is a loss for Wall Street.

People decided to go on Reddit and join forces to buy the GameStop stock and it caused a short squeeze.

That is why many billionaires are deeply upset because they didn’t see it coming and ended up losing billions of dollars.

 

 Robinhood is a trading stock platform that decided to suspend trading from active users which is a serious violation. It is quite comical when the average joe starts making some money, they get stopped immediately. 

(watch this video) This is a much easier explanation about Gamestop and the Stock Market

opinion/unbiased news

Photo by energepic.com from Pexels
 
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