I’m really happy that there are people smarter than myself, so that I don’t have to do everything myself. (Not that I could.) Anyway, SEC reduced a fee from $22.1 to $5.1, making it cheaper for hedge funds to sell. That went in effect yesterday, February 25th, and the market saw quite a rout!
Does this have to do with GME? Well, I believe so. The hedge funds will have to cover their positions, and they are selling long side to do so. This is just my opinion.
Not financial advice.
P.S.: just to be clear. The cost saving is nothing, for hedge funds. As someone else said, it’s “less than a rounding error.” I believe the message sent to hedgies was political: it was a sign of encouragement from the SEC for hedge funds to cover their short positions in GME. There is no good way out of this, we are all on the way to MOASS, that’s why everyone is suffering right now (again, my personal opinion).
Foot note: MOASS = mother of all short squeezes