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This may be another genuine but ridiculous question, but... I think "the wrong people are losing money" is right on point, and to be clear, I don't think Robin

This may be another genuine but ridiculous question, but... I think "the wrong people are losing money" is right on point, and to be clear, I don't think Robinhood has any business stopping people from buying stocks if they want to. But I am really wondering about how many people are getting rich from this stock pop. When the dust from all this settles, aren't a lot of the folks buying the stock over the last week or so going to end up underwater? My assumption has been that they saw that as an acceptable price for a jolly time Sticking It To The Man. And, back in the long ago (e.g., last week) when the stock price was $20 or $30 a share, that makes sense if you have the money to burn. But at $200+ a share, what's the rationale for holding on?

JumpCrisscross 6y ago
> how many people are getting rich from this stock pop The people getting rich are the market makers. This is the hole in the Wall Street vs. the Rebels argument the media seems to be trying to pigeonhole this into. The first-order losers are the hedge funds who, for some stupid reason, expressed their short view through actual shorting versus through puts and the retail investors who bought at inflated prices. The second-order losers will be the brokers, who will likely face margin losses, options-settlement losses, investor lawsuits, regulatory fines and Congressional attention for enabling the pump and dump and then ham-fistedly trying to stop it.
- TuringNYC 6y ago
  The other first-order losers are RH retail investors who just made a huge unrealized gain and are not allowed to realize the profits by selling in time. I'm on TD and they arent allowing in-the-money call option sell-to-closes to execute.
  - chipotle_coyote 6y ago
    That's what I'm mostly concerned about, yes. If my understanding about the initial involvement of the Reddit crowd is correct -- that it was really about "let's pump this stock up to screw hedge funds that are shorting it" -- that group is presumably okay with losing their investment. But I can't help suspect that over the last few days, that group has become outnumbered by investors who figured they could take advantage of this weird pop by buying and selling within a very short time frame, which it sounds like you're in, and possibly even by investors who want to hold the stock, not understanding that -- even without Robinhood's interference -- it's likely set up for a fall just as quick as its rise.
    - TuringNYC 6y ago
      Part of the thing is -- I dont have a margin account. I'm not leveraged. The whole bit about "protecting the retail investor" is absurd. There is nothing to protect and they face no harm from me since its not margined. I can lose all my equity and that is it. I am the one who faces harm -- because I cant actually get out of the trade of a lifetime. Second thing -- I think there were many things going on and many cohorts on WSB. - Cohort 1: possibly pump and dump (though, this happens all the time with hedge fund managers also trying to move their position...)...or perhaps 22yos excited by GameStop, not that hard to imagine. GME has been a huge discussion on WSB for months. - Cohort 2: 22yos YOLO'ing their weekly stipend and stimulus check. No real though about pump and dump and more so just silly gambling. - Cohort 3: Intelligent investors seeing an opportunity, not manipulating any more than a hedge fund manager does (see: Infinite Gamma Squeeze notice: https://www.reddit.com/r/stocks/comments/l3e54f/gme_infinite_gamma_squeeze_gap_in_option_market/ https://www.reddit.com/r/stocks/comments/l3e54f/gme_infinite...) - Cohort 4: Downtrodden retail "investors" looking to stick it to the man: https://twitter.com/inactivist_/status/1354537152445521923/photo/1 https://twitter.com/inactivist_/status/1354537152445521923/p... - Cohort 5: Onlookers on WSB (im a frequent reader, never post) looking to hitch a wagon to the runaway train.
- throwaway09223 6y ago
  I think you're touching on why brokerages have tried to come down hard on GME. The brokerages themselves have exposure as you explain -- they have a direct financial stake. Maybe someone at RH ran the numbers on how much they stand to lose if things go sideways and decided it poses an existential threat. It's the only reason I can think of because halting GME when more than half of their customers hold GME seems like a company ending event.
  - jonas21 6y ago
    > more than half of their customers hold GME This is incorrect. See the correction at the bottom of the article that originally reported that figure [1]: Correction: An earlier version of this article stated that 56 percent of Robinhood users hold GME stock. This is incorrect, based on a misreading of a statistic on Robinhood. Motherboard regrets the error. [1] https://www.vice.com/en/article/m7ak7y/r https://www.vice.com/en/article/m7ak7y/r

JumpCrisscross 6y ago

> how many people are getting rich from this stock pop The people getting rich are the market makers. This is the hole in the Wall Street vs. the Rebels argument the media seems to be trying to pigeonhole this into. The first-order losers are the hedge funds who, for some stupid reason, expressed their short view through actual shorting versus through puts and the retail investors who bought at inflated prices. The second-order losers will be the brokers, who will likely face margin losses, options-settlement losses, investor lawsuits, regulatory fines and Congressional attention for enabling the pump and dump and then ham-fistedly trying to stop it.

TuringNYC 6y ago
The other first-order losers are RH retail investors who just made a huge unrealized gain and are not allowed to realize the profits by selling in time. I'm on TD and they arent allowing in-the-money call option sell-to-closes to execute.
- chipotle_coyote 6y ago
  That's what I'm mostly concerned about, yes. If my understanding about the initial involvement of the Reddit crowd is correct -- that it was really about "let's pump this stock up to screw hedge funds that are shorting it" -- that group is presumably okay with losing their investment. But I can't help suspect that over the last few days, that group has become outnumbered by investors who figured they could take advantage of this weird pop by buying and selling within a very short time frame, which it sounds like you're in, and possibly even by investors who want to hold the stock, not understanding that -- even without Robinhood's interference -- it's likely set up for a fall just as quick as its rise.
  - TuringNYC 6y ago
    Part of the thing is -- I dont have a margin account. I'm not leveraged. The whole bit about "protecting the retail investor" is absurd. There is nothing to protect and they face no harm from me since its not margined. I can lose all my equity and that is it. I am the one who faces harm -- because I cant actually get out of the trade of a lifetime. Second thing -- I think there were many things going on and many cohorts on WSB. - Cohort 1: possibly pump and dump (though, this happens all the time with hedge fund managers also trying to move their position...)...or perhaps 22yos excited by GameStop, not that hard to imagine. GME has been a huge discussion on WSB for months. - Cohort 2: 22yos YOLO'ing their weekly stipend and stimulus check. No real though about pump and dump and more so just silly gambling. - Cohort 3: Intelligent investors seeing an opportunity, not manipulating any more than a hedge fund manager does (see: Infinite Gamma Squeeze notice: https://www.reddit.com/r/stocks/comments/l3e54f/gme_infinite_gamma_squeeze_gap_in_option_market/ https://www.reddit.com/r/stocks/comments/l3e54f/gme_infinite...) - Cohort 4: Downtrodden retail "investors" looking to stick it to the man: https://twitter.com/inactivist_/status/1354537152445521923/photo/1 https://twitter.com/inactivist_/status/1354537152445521923/p... - Cohort 5: Onlookers on WSB (im a frequent reader, never post) looking to hitch a wagon to the runaway train.
throwaway09223 6y ago
I think you're touching on why brokerages have tried to come down hard on GME. The brokerages themselves have exposure as you explain -- they have a direct financial stake. Maybe someone at RH ran the numbers on how much they stand to lose if things go sideways and decided it poses an existential threat. It's the only reason I can think of because halting GME when more than half of their customers hold GME seems like a company ending event.
- jonas21 6y ago
  > more than half of their customers hold GME This is incorrect. See the correction at the bottom of the article that originally reported that figure [1]: Correction: An earlier version of this article stated that 56 percent of Robinhood users hold GME stock. This is incorrect, based on a misreading of a statistic on Robinhood. Motherboard regrets the error. [1] https://www.vice.com/en/article/m7ak7y/r https://www.vice.com/en/article/m7ak7y/r