THREAD: What are some Posting Traders doing, and what do the federal securities laws say about it? A securities law professor tries to make it simple.
(Tl;dr? Some people on the Internet will be surprised when the SEC investigates them for market manipulation.)
Backstory: what's going on? GameStop sells video games (you've maybe seen their stores in strip malls). Its business model hasn't been doing so hot.
It's a public company, so you could go on your broker's website and trade its stock. Its price had been low for a while.
One very simple way to think about stock investing is that you can make two main types of bets: that a stock's price will go up, or go down.
Some big hedge funds (think BILLIONS) were betting that it'd go down. This is called a "short" bet.
The goal of a short sale is to sell high, buy low, and pocket the difference. Suppose you pay a small rental fee to borrow a stock, sell, and hope to rebuy it later at a lower price when you've said you'll give it back to the lender.
Note for later: "borrowing" is important.
The other kind of bet is a "long" sale, in which you buy a stock for its income (dividends) or the possibility of selling it for a higher price later (capital gains).
Compared with someone "short," someone "long" a stock actually has it (kinda).