Realist, not conformist analysis of the latest financial, business and political news

Has the GameStop ‘Short Squeeze’ Changed Finance?

The start of this year saw a bit of a tussle between retail traders and Wall Street as the Reddit community of wallstreetbets grew from a few hundred thousand to over four million in a very short period of time all off the back of trying to push the stock price for GameStop higher – whilst some consider the changes that platforms like Robinhood made would directly undermine that opportunity, with some even suggesting it was actively responsible for bringing the price down at a time where it would’ve kept rising. Whilst the big activity around the short squeeze is more or less over, there have been a number of investigations opened up to see whether or not there had been underlying market manipulation, and what may be changed moving forward. 

The primary change that may be seen is whether or not individuals will be allowed to share their own positions during a big period of change – one of the people holding the biggest positions, who used the alias of Roaring Kitty, had been publicly stating for quite some time that he supported the GameStop position and would actively broadcast on different streaming platforms his own thoughts, and this has since been one of the main points of contention to whether or not he was using his position to leverage change – given the changing position of the market so quickly, it’s a very interesting situation as a whole. 

The period of time did open many up to different options in retail trading though, and has brought a lot more attention than perhaps ever before – many newcomers were warned that it was a bit of a gamble, much like the use of an online casino and gambling as here are some of the most popular non-gamstop services, there was no guarantee that betting on the market would bring any winnings, and there had been many warned away from using any money they couldn’t afford to lose – but with fears that there was some market manipulation going on, it has had an impact on how some view retail trading platforms moving forward.

The investigations into what had happened with the GameStop situation will certainly take some time to progress and be resolved, but there’s also the clear possibility that it could lead to more permanent changes in the financial market – for now, the answer is it hasn’t led to any change, but it has led to rising scepticism in the way markets trade, and has led many to be less trustworthy of the different brokers that many feel betrayed their rights with blocking buy options throughout.