There’s a lot going on in the stock market this week and both and Reddit in general are inundated with questions about it. This is an opportunity to ask for explanations for concepts related to the stock market. All other questions related to the stock market will be removed and users directed here.
How does buying and selling stocks work?
What is short selling?
What is a short squeeze?
What is stock manipulation?
[What is a hedge fund?](https://www.reddit.com/r/explainlikeimfive/comments/l6ptb7/eli5_what_is_a_hedgefund/)
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In: Economics
GameStop explained –
Remember the toilet paper shortage we went through?
GameStop is the toilet paper.
Melvin Capital is the price gouger who borrowed a bunch of TP from Charmin (broker) at “future” normal post-pandemic prices ($1) and sold it to the public at current prices ($5).
Pandemic over, Melvin has to return TP to Charmin buuuuut Reddit decided Melvin bad and toilet paper good and bought all the TP forcing Melvin to buy it from them for new price of $50 or pay Charmin extra for collateral.
Melvin’s friends got mad that Reddit acted like Melvin and they closed Charmin’s doors so Reddit couldn’t buy anymore TP.
Now AOC and Trump Jr have joined forces and are having lunch discussing ways to punish Melvin’s friends so that Reddit can put all the toilet paper in a rocket ship.
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