Okay this is probably embarrassing but for posterity, laughs, and making lemonade out of lemons, here is how I lost 14% in less than half an hour trying to be greedy with the whole GameStop drama.
What’s going on with GameStop’s stock?
For the uninitiated, GameStop (stock ticker $GME) is a video game retail chain in America. With the increasing shift to digital distribution of games, GameStop’s business has been on the decline for years, and the impact of Covid-19 has further led to its stock price going down over the past year.
As such, hedge funds have swooped in, shorting the stock as they believe that the price would go down. This involves selling the stock at the current price, $10 for example, before buying the stock a while later at say $8 to cover their position. They earn the difference of $2 per stock shorted.
If the price goes up, however...