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I'm sure this will all be downvoted because it will hurt peoples feelings. 1- RH, Etrade, etc are not manipulating anything. The ones who manipulated were th

by beezle 6y ago

I'm sure this will all be downvoted because it will hurt peoples feelings. 1- RH, Etrade, etc are not manipulating anything. The ones who manipulated were the reddit and other chat rooms. If Costco doesn't want to stock your favorite item any more do you get to sue because you still want to buy it? 2- If the customers had no idea of the legal documents they signed when they opened their accounts, their bad, not the broker. 3- 'the trust of the retail trading industry' Certainly not retail investors (who are not the people doing this stuff). And I doubt also retail traders who are not engaged in mob trades based on what is coming out of internet chat rooms/boards. There was day trading prior to the advent of Robinhood and Covid-19, right? 4- First off, the shorts are done. That is a large part of why the price went to where it did. Second, the brokers are protecting themselves from default on margin loans as well as the headache and aggravation of closeouts when 'traders' moan about the fills. 5- Why on earth should the Biden administration go to bat for a retail trading mob? Many of whom are on record in the press as having used their stimulus and unemployment checks as capital? 6- Shorts are not only necessary for a market to function well, they are a common part of the market having nothing at all to do with a view on a company. The largest example of that are fund managers selling the stock of an aquiring company against a position they own in the company being purchased. Fund manager could mean pension fund manager, mutual fund manager, or, gasp, a hedge fund manager.

Sohcahtoa82 6y ago
> RH, Etrade, etc are not manipulating anything. I don't know how you could possibly argue that when RH is preventing the purchase of a stock, but not the selling (Which pushes the stock price down), and trying to use the argument of "we're trying to protect you from volatility!" > If Costco doesn't want to stock your favorite item any more do you get to sue because you still want to buy it? This is such an apples-to-oranges comparison here that I really don't feel you're arguing in good faith. > 2- If the customers had no idea of the legal documents they signed when they opened their accounts, their bad, not the broker. As others have said, EULA doesn't trump the law. > 3- Certainly not retail investors (who are not the people doing this stuff). Either I'm misunderstanding what you're saying here, or you are 100% incorrect. It is absolutely the retail investors that are buying the GME stock and doing this. > 4- First off, the shorts are done We don't know this yet. > Second, the brokers are protecting themselves from default on margin loans as well as the headache and aggravation of closeouts when 'traders' moan about the fills. Defaulting on margin loans is prevented by issuing a margin call. Some traders are moaning about their GME being liquidated because they bought on margin while going all-in on GME, but even on WSB, most traders understand that's how margin works. > 5- Why on earth should the Biden administration go to bat for a retail trading mob? For the same reason Ted Cruz is. RH is impeding the free market. It's pretty crazy right now. Ted Cruz, AOC, Ben Shapiro, and Donald Trump Jr are all upset with RH right now, though for different reasons. The leftists are upset that the hedge fund managers are pissed that the poors are beating them at their game, while the right is upset that RH is interfering with the free market. > 6- Shorts are not only necessary for a market to function well If it was merely a matter of investors being able to say "I think this company is going to fail, so I'm going to short it", then yes. But then that quickly creates extremely perverse incentives. Now, it becomes "I have invested my money into the failure of this company, so I'm going to short it even more and publish articles about how this company has no future." GameStop got a new CEO and had a path to recovery, and the hedge funds didn't like that since they were already shorting, so they doubled-down on the shorting. The funds are using their money to kill a company. While this is technically legal, I think it's incredibly immoral and unethical.
- f430 6y ago
  What is alleged is that Citadel took on more short position after disabling RH. If this isn't market manipulation then I don't know what the hell is the point of having SEC and regulatory enforcement. The whole system is in existential crisis. This is now a spin zone: If the Biden administration shows leniency towards Wall Street, his popular base will revolt, especially after AOC has sent out that tweet.
- jcranmer 6y ago
  > I don't know how you could possibly argue that when RH is preventing the purchase of a stock, but not the selling (Which pushes the stock price down), and trying to use the argument of "we're trying to protect you from volatility!" I'm not really savvy on the complete details, but there have been a smattering of comments pointing out that the actual financial details of what goes on when you buy something could be putting Robinhood in substantial counterparty risk that doesn't happen when you sell something. > The funds are using their money to kill a company. While this is technically legal, I think it's incredibly immoral and unethical. And, quite frankly, the short squeezers are trying to do the same thing to the hedge funds. I don't think you can condone one and criticize the other; to me, everyone involved in this fiasco have some ethical shortcomings they should look at.
- beezle 6y ago
  1- RH is one of hundreds of brokers, not all of whom stopped taking trades for opening positions in GME. Is your point then that RH traders are the only buyers? Is it a ponzi scheme then? 2- It is NOT an EULA. Your agreement with a brokerage is not a software license. It is exactly like a mortgage or credit card agreement. Good luck in court trying to claim your were damaged and want to walk from one of those because you did not bother to read the terms. 3- An "investor" is not a pattern day trader. An investor does not take positions with a time horizon of minutes and hours. The kindest would be to call those involved in GME speculators. If these individuals bought GME because they really believed in the recovery story they would have a long time horizon and would not care about a temporary halt in new purchases at a handful of brokers. 4- The biggest short is in the press saying they are out. 4a- Ex: Margin call is triggered on account at GME price of $290. The first bid that RH can hit is at $265. Who is eating the difference? Suppose not all is filled and balance is at even lower price? This is not an orderly liquid market. Try to recall trading in index futures during March. Moves that would typically take weeks happened in moments. 5-Politicians latch onto anything that will get themselves in front of a camera. RH is not impeding the free market. You are free to DTC your entire account to another broker at any time. 6-Are you out front with the same critique when Joe Hedge fund is on Squawk box saying how great the new iWhatever is and how we should all buy Apple even at record highs? Even though he is long and has an interest in it going higher? But it is bad when a short seller publishes why they think a company may eventually fail because of mismanagement or other trends? And the nerve of them to suggest others should sell before it does fail. 6a-Unless GME needed to raise funds by an equity sale, the price of their stock is irrelevant to day to day operations. Do you look at the price of Pepsi shares before buying Doritos? If the new CEO of GME has a legitimate and convincing recovery plan he should be able to persuaade banks to lend... unless the debt load is already so high that even a recovery makes it dubious that they can service their debt.

by beezle 6y ago

Sohcahtoa82 6y ago

> RH, Etrade, etc are not manipulating anything. I don't know how you could possibly argue that when RH is preventing the purchase of a stock, but not the selling (Which pushes the stock price down), and trying to use the argument of "we're trying to protect you from volatility!" > If Costco doesn't want to stock your favorite item any more do you get to sue because you still want to buy it? This is such an apples-to-oranges comparison here that I really don't feel you're arguing in good faith. > 2- If the customers had no idea of the legal documents they signed when they opened their accounts, their bad, not the broker. As others have said, EULA doesn't trump the law. > 3- Certainly not retail investors (who are not the people doing this stuff). Either I'm misunderstanding what you're saying here, or you are 100% incorrect. It is absolutely the retail investors that are buying the GME stock and doing this. > 4- First off, the shorts are done We don't know this yet. > Second, the brokers are protecting themselves from default on margin loans as well as the headache and aggravation of closeouts when 'traders' moan about the fills. Defaulting on margin loans is prevented by issuing a margin call. Some traders are moaning about their GME being liquidated because they bought on margin while going all-in on GME, but even on WSB, most traders understand that's how margin works. > 5- Why on earth should the Biden administration go to bat for a retail trading mob? For the same reason Ted Cruz is. RH is impeding the free market. It's pretty crazy right now. Ted Cruz, AOC, Ben Shapiro, and Donald Trump Jr are all upset with RH right now, though for different reasons. The leftists are upset that the hedge fund managers are pissed that the poors are beating them at their game, while the right is upset that RH is interfering with the free market. > 6- Shorts are not only necessary for a market to function well If it was merely a matter of investors being able to say "I think this company is going to fail, so I'm going to short it", then yes. But then that quickly creates extremely perverse incentives. Now, it becomes "I have invested my money into the failure of this company, so I'm going to short it even more and publish articles about how this company has no future." GameStop got a new CEO and had a path to recovery, and the hedge funds didn't like that since they were already shorting, so they doubled-down on the shorting. The funds are using their money to kill a company. While this is technically legal, I think it's incredibly immoral and unethical.

f430 6y ago
What is alleged is that Citadel took on more short position after disabling RH. If this isn't market manipulation then I don't know what the hell is the point of having SEC and regulatory enforcement. The whole system is in existential crisis. This is now a spin zone: If the Biden administration shows leniency towards Wall Street, his popular base will revolt, especially after AOC has sent out that tweet.
jcranmer 6y ago
> I don't know how you could possibly argue that when RH is preventing the purchase of a stock, but not the selling (Which pushes the stock price down), and trying to use the argument of "we're trying to protect you from volatility!" I'm not really savvy on the complete details, but there have been a smattering of comments pointing out that the actual financial details of what goes on when you buy something could be putting Robinhood in substantial counterparty risk that doesn't happen when you sell something. > The funds are using their money to kill a company. While this is technically legal, I think it's incredibly immoral and unethical. And, quite frankly, the short squeezers are trying to do the same thing to the hedge funds. I don't think you can condone one and criticize the other; to me, everyone involved in this fiasco have some ethical shortcomings they should look at.
beezle 6y ago
1- RH is one of hundreds of brokers, not all of whom stopped taking trades for opening positions in GME. Is your point then that RH traders are the only buyers? Is it a ponzi scheme then? 2- It is NOT an EULA. Your agreement with a brokerage is not a software license. It is exactly like a mortgage or credit card agreement. Good luck in court trying to claim your were damaged and want to walk from one of those because you did not bother to read the terms. 3- An "investor" is not a pattern day trader. An investor does not take positions with a time horizon of minutes and hours. The kindest would be to call those involved in GME speculators. If these individuals bought GME because they really believed in the recovery story they would have a long time horizon and would not care about a temporary halt in new purchases at a handful of brokers. 4- The biggest short is in the press saying they are out. 4a- Ex: Margin call is triggered on account at GME price of $290. The first bid that RH can hit is at $265. Who is eating the difference? Suppose not all is filled and balance is at even lower price? This is not an orderly liquid market. Try to recall trading in index futures during March. Moves that would typically take weeks happened in moments. 5-Politicians latch onto anything that will get themselves in front of a camera. RH is not impeding the free market. You are free to DTC your entire account to another broker at any time. 6-Are you out front with the same critique when Joe Hedge fund is on Squawk box saying how great the new iWhatever is and how we should all buy Apple even at record highs? Even though he is long and has an interest in it going higher? But it is bad when a short seller publishes why they think a company may eventually fail because of mismanagement or other trends? And the nerve of them to suggest others should sell before it does fail. 6a-Unless GME needed to raise funds by an equity sale, the price of their stock is irrelevant to day to day operations. Do you look at the price of Pepsi shares before buying Doritos? If the new CEO of GME has a legitimate and convincing recovery plan he should be able to persuaade banks to lend... unless the debt load is already so high that even a recovery makes it dubious that they can service their debt.