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Here's a pretty good explanation of that how that can happen: https://nope-its-lily.medium.com/gamestop-power-to-the-market-players-part-1-d8863f2f8604 https://

• curiousgal 6y ago
  Well that paints a completely different picture!
• cwkoss 6y ago
  Hmm, i wonder how accurate this article is, particularly around melvin capital's positions. If they only had put options, why did they need a $2.5B bailout this week? I was under the impression they also had short positions or sold naked calls in order to get into as much trouble as they seem to be in based on the bailout announcement. Or were their put options' value being used as basis other leveraged investments? Don't understand how they could have lost $2.5B on just put options.
  • jdjfktkrnj 6y ago
    Indeed. WSJ: > Melvin Capital Management, which managed $12.5 billion at the start of the year, had lost nearly 30% for the year through Friday due largely to its array of bets against companies including GameStop, said people familiar with the fund. Quite interesting that parent article, as detailed as it is, somehow missed a much reported 30% drawdown.