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One of my favorite things about this story is the way it discretely slides an association between "Amazon engineer" and "has $50k to let go of 'forever' on a so
by dsacco 9y ago
One of my favorite things about this story is the way it discretely slides an association between "Amazon engineer" and "has $50k to let go of 'forever' on a social experiment" across the table to the audience.
That's the real message that's going to be received by a large amount of the population reading this story as it makes the rounds on outlets like CNBC.
- merkaloid 9y agoHe's probably not just any engineer because if you actually check the stream it looks like it is viral marketing for "robinhood.com"
- willtheperson 9y agoThis is probably it. I personally signed up for Robinhood based on this project. I'm already interested in stock trading though so it wasn't that big of a commitment from me but they do have a nice App and signup process compared to other financial trading outfits I've used.
- MichaelGG 9y agoYeah, Robinhood is mentioned quite a bit on his site, including a sign up referral link. Seems like their referral program gives you $10 for each signup. Also he says if it hits $25K, then the game is over. So it's only $25K at real risk, not $50K. (True, the stocks could fall further before he liquidates.)
- hbosch 9y agoAlso: anyone have an idea as to what regulations he is citing when he says if it drops below 50% he has to close the account? Is that a Robinhood thing, or an equities trading thing? As far as I know, there is no regulation limiting how much a person can lose on the market... Makes me wonder if perhaps his account balance is $25k personal, and $25k matched by Robinhood for the stunt.
- adt2bt 9y agoHe'll just cut the stream<->robinhood connection, there's nothing from robinhood on down that will save his $25k.
- stockstream 9y agoActually, there kind of is. It will stop you from placing trades if you daytrade with less than that. Your account will be suspended. https://support.robinhood.com/hc/en-us/articles/217072366-Pattern-Day-Trading https://support.robinhood.com/hc/en-us/articles/217072366-Pa...
- dragonwriter 9y agoStopping you from trading on the account doesn't protect the value in the account (and makes it harder for you to take action that would protect it, too!)
- abofh 9y agoTypically you're forbidden from increasing your equity loan on a margin call - closes are completely fine (So you can buy shorts, or sell longs, but the inverse is against the rules). I've never used robinhood, but I've been declared a PDT before.
- vxNsr 9y agoI think you need $25k to be a day trader on Robinhood. So if it drops below that he can't trade the same way he would unless he adds more cash which I guess he isn't prepared to do.
- Miner49er 9y agoThat's not just Robinhood. I'm not aware of any brokerage that lets you trade on the major U.S. markets with less than $25k.
- Stanleyc23 9y ago> the stocks could fall further before he liquidates that's what "stop-loss" trades are for :p does robinhood not have that?
- jmathai 9y agoRobinhood has stop loss trades.
- zAy0LfpBZLC8mAC 9y agoNo, that is not what stop-loss orders are for. A stop-loss order only puts a sell offer into the market when the market prices falls below a certain threshold, there is no guarantee as to what price someone will actually buy your shares at, or that anyone will buy them at all. If you want to have a hard limit on the loss, you'll have to buy a put option.
- discodave 9y agoEven then you have counterparty risk.
- awad 9y agoTechnically the put doesn't guarantee anything since not everyone is too big to fail but for most purposes this is true.
- ABCLAW 9y agoNot sure why this is being voted down. A counterparty in an option agreement can become insolvent. This is typically analyzed under the name counterparty risk. Much much much less common than a stock going down, but when large counterparties become insolvent, a lot of people start needing to write off big chunks of their positions.
- deleted 9y ago[deleted]
- MichaelGG 9y ago
- wyldfire 9y agoFor folks playing at home and wondering "What is Robinhood?" From [1] > Robinhood is a stock brokerage that allows customers to buy and sell U.S. listed stocks and ETFs with $0 commission. ... we are able to maintain a lean bottom-line and pass the savings along to you, the customer ... Robinhood is an SEC registered broker-dealer and member of FINRA & SIPC. [1] https://support.robinhood.com/hc/en-us/articles/202844869-About-Robinhood https://support.robinhood.com/hc/en-us/articles/202844869-Ab...
- spoonie 9y agoDon't waste your money and time trading individual stocks. Invest for your future with dollar-cost-averaging and buying ALL the stocks (AKA a diversified index-tracking fund with very low fees (less than 0.1%/year)).
- dawnerd 9y agoI think so too. When it first launched I signed up for robinhood and tossed just 100 bucks to see how it worked. App needs a lot of work to be useful so I doubt I'll throw any more money at it. On the plus side, I am up ~4%
- stockstream 9y agoStockStream was launched independent of Robinhood. I really like their platform, so am glad to include links to their site.
- mabbo 9y agoHe totally is just some random guy. I know this, because I worked with him for a few years in Amazon Fulfillment. Just found out today that it was him that made this project (haven't talked to him in a while).
- abandonliberty 9y agouser: mabbo created: 1527 days ago karma: 6074 Active, long-standing account. If you're a sockpuppet you're a damned good one. :) Out of curiosity, how significant is 50K to this guy?
- Pica_soO 9y agoToy money, i guess. Its suprising who is a millionair and who isnt. In a car factory where my brother works, one of the workers, financing a house with his money and then houses with money from the house, became a millionaire without anyone in the above layer noticing. So if he gets chewed out by one of his fore-masters or executives, they are - not knowing- chewing out somebody who could quit any time.
- Taek 9y agoAll it takes is 10-20 years of saving 30+% of your income. Most people balk at that savings rate, but anything white collar pays enough to have that sort of savings if you are willing to life a more modest lifestyle than your socioeconomic peers. 10 years later the interest you earn on it will be more than the 30% you are putting in.
- Pica_soO 9y agoIt helps if you have entertainment/activitys that are solitary, cheap and infinite. Games, books, whatever occupy you without draining resources.
- user5994461 9y agoThat was automatic for most people not so long ago, at the time house were bought on 10-20 years mortgages.
- encoderer 9y ago$50k in RSUs annually is a decent target for a mid-level engineer (non-management). With overlap of grants after the first year and price appreciation of the stock, you can imagine how this can grow. That said, I think Amazon has some unfriendly vesting terms compared to the SFBA-based companies I'm more familiar with.
- cbhl 9y agoIs this person a Twitch engineer? That's kind of a subset of Amazon engineer...
- alttab 9y agoBased on information, I'd argue Michael Roberts isn't his real name so we will never know.
- stockstream 9y agoNope. It actually is my real name.
- wellsjohnston 9y agoOh snap.
- rsync 9y agoDid you also win the putnam ?
- alttab 9y agoAwesome, which org?
- alttab 9y agoAh - you just don't work at Amazon anymore.
- ryandrake 9y agoThat was my first question too. What "engineer" has $50K sitting around to practically throw away? Then I remember, when it comes to tech reporting, "engineer" could mean anything on the spectrum between "7th code monkey from the left" to "CTO".
- nandemo 9y agoI think y'all are overestimating the risk. He isn't throwing it away. He's mentioned here that it's max 1 trade of 1 share every 5min. The initial portfolio is very diversified, so barring a concerted attack this experiment's returns likely won't be much different from a random actively managed mutual fund -- with the advantage of having no management fees and no trading fees either. And he can stop the experiment any time.
- hartator 9y agoEverytime you buy and sell a stock even if the stock didn't move and no fee, you loose at least 0.01 usd per share because of the spread. Ie. Apple trades 123.45 to buy and 123.44 to sell.
- nandemo 9y agoRight (not sure why you're downvoted). I don't think the spread will have a large effect though, for such infrequent trading.
- dsacco 9y agoI think you misunderstood my point. I'm not at all surprised that he has $50k to do this with as an engineer (I could do the same). Engineers, as a class of people who work at companies like Amazon, are very well paid. I was more commenting that many other people outside the industry are going to become familiar with this idea on a somewhat more visceral level now that it's at the point that CNBC is talking about it. As an aside, you might be surprised at how many of those "seventh code monkey from the left" are clearing over $200k per year at Amazon. The last time I spoke to people I know at Google/Facebook I was hearing total annual compensation packages of about $250k for senior level in NY and CA. If you don't have a family and aren't growing your spending habits to match your pocket you can easily have that much extra cash lying around (NB I hesitate to use words like "easily" because people tend to have an indignant reaction, but that doesn't really alter my point).