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I see little outrage about this. The outrage is about illegally manipulating the market in broad daylight by preventing retail investors from purchasing a stock

I see little outrage about this. The outrage is about illegally manipulating the market in broad daylight by preventing retail investors from purchasing a stock. Is a user expected to tolerate illegal activity because the businesses customer demands it of them? If you have any doubt what Robinhood is doing is illegal (setting aside that it's clearly morally reprehensible), then I encourage you to read the suit that was just filed https://www.courtlistener.com/recap/gov.uscourts.nysd.553175/gov.uscourts.nysd.553175.1.0.pdf https://www.courtlistener.com/recap/gov.uscourts.nysd.553175...

missedthecue 6y ago
"The outrage is about illegally manipulating the market in broad daylight by preventing retail investors from purchasing a stock." There's a difference between preventing someone from buying a stock and telling them you're not going to assume the risk of making a market for them, which is what's going on here. You cannot force Citadel to make a market for your orders. They happen to result in the same situation, but the implications are completely different.
- toast0 6y ago
  > You cannot force Citadel to make a market for your orders. That depends on the market maker contract Citadel has with the brokerage(s) and the exchange(s). Although, I don't think the contracts with exchanges are very tight; I don't know about the contracts with brokerages. IIRC, Nasdaq had (has?) a special order type for market makers who didn't want to actually make a market that would put in bid and ask at exactly the maximum contractually allowed spread away from last trade, and withdraw and replace them when any trades did occur; making it much harder to actually trade with the market maker.
  - missedthecue 6y ago
    Citadel would never ever put themselves in a situation where they contractually have to assume an unpredictable level of risk
toast0 6y ago
There's plenty of outrage about payment for order flow; see every thread about payment for order flow. The SEC argument that RobinHood was misleading about it rings a bit true to me; but payment for order flow isn't the problem there and isn't what the SEC was upset about; it's the split between the brokerage and price improvement. As a retail investor, I'm a little squeemish that firms want to pay me to trade with me, but given the National Best Bid and Offer requirements, I don't see what the downside is for me. It's like accepting a deal at the electronics store that's listed as 'no resellers.'
dawnerd 6y ago
And forcefully selling peoples' shares now as well.
- JumpCrisscross 6y ago
  > forcefully selling peoples' shares Is this a reference to margin calls?
  - dawnerd 6y ago
    https://twitter.com/555Sunny/status/1354854993946406917/photo/1 https://twitter.com/555Sunny/status/1354854993946406917/phot... Still not sure if this is across the board or just the larger shareholders. I'd imagine robinhood is trying to limit their risk vs. the risk of the investor.
    - imtringued 6y ago
      I'm not sure I trust this tweet but if it is true this is literal fraud. That would mean the end of Robinhood as a company.
  - qaq 6y ago
    There is a difference between a normal margin call and manipulating rules on your platform to force margin calls for the benefit of Citadel. I hope Kenneth C. Griffin joins Mike Milken in a list of crooks who actually got convicted.
TeaDrunk 6y ago
if RobinHood can just pay whatever fine and continue operating as normal, then it's effectively legal for any entity of RobinHood's wealth.
Denvercoder9 6y ago
> I see little outrage about this. The outrage is about illegally manipulating the market in broad daylight by preventing retail investors from purchasing a stock. There's outrage about both. This story wouldn't be submitted and upvoted if this was common knowledge and accepted practice.

missedthecue 6y ago

"The outrage is about illegally manipulating the market in broad daylight by preventing retail investors from purchasing a stock." There's a difference between preventing someone from buying a stock and telling them you're not going to assume the risk of making a market for them, which is what's going on here. You cannot force Citadel to make a market for your orders. They happen to result in the same situation, but the implications are completely different.

toast0 6y ago
> You cannot force Citadel to make a market for your orders. That depends on the market maker contract Citadel has with the brokerage(s) and the exchange(s). Although, I don't think the contracts with exchanges are very tight; I don't know about the contracts with brokerages. IIRC, Nasdaq had (has?) a special order type for market makers who didn't want to actually make a market that would put in bid and ask at exactly the maximum contractually allowed spread away from last trade, and withdraw and replace them when any trades did occur; making it much harder to actually trade with the market maker.
- missedthecue 6y ago
  Citadel would never ever put themselves in a situation where they contractually have to assume an unpredictable level of risk

toast0 6y ago

There's plenty of outrage about payment for order flow; see every thread about payment for order flow. The SEC argument that RobinHood was misleading about it rings a bit true to me; but payment for order flow isn't the problem there and isn't what the SEC was upset about; it's the split between the brokerage and price improvement. As a retail investor, I'm a little squeemish that firms want to pay me to trade with me, but given the National Best Bid and Offer requirements, I don't see what the downside is for me. It's like accepting a deal at the electronics store that's listed as 'no resellers.'

dawnerd 6y ago

And forcefully selling peoples' shares now as well.

JumpCrisscross 6y ago
> forcefully selling peoples' shares Is this a reference to margin calls?
- dawnerd 6y ago
  https://twitter.com/555Sunny/status/1354854993946406917/photo/1 https://twitter.com/555Sunny/status/1354854993946406917/phot... Still not sure if this is across the board or just the larger shareholders. I'd imagine robinhood is trying to limit their risk vs. the risk of the investor.
  - imtringued 6y ago
    I'm not sure I trust this tweet but if it is true this is literal fraud. That would mean the end of Robinhood as a company.
- qaq 6y ago
  There is a difference between a normal margin call and manipulating rules on your platform to force margin calls for the benefit of Citadel. I hope Kenneth C. Griffin joins Mike Milken in a list of crooks who actually got convicted.

TeaDrunk 6y ago

if RobinHood can just pay whatever fine and continue operating as normal, then it's effectively legal for any entity of RobinHood's wealth.

Denvercoder9 6y ago

> I see little outrage about this. The outrage is about illegally manipulating the market in broad daylight by preventing retail investors from purchasing a stock. There's outrage about both. This story wouldn't be submitted and upvoted if this was common knowledge and accepted practice.