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And right after saying they don't have any liquidity problems said, "We're #1 on the app" while retail investors were losing millions because of expiring option

by sdan 6y ago

And right after saying they don't have any liquidity problems said, "We're #1 on the app" while retail investors were losing millions because of expiring options/stocks. Absolutely tone-deaf. Not denying that all securities have risks, but that was a bad response imo.

amscanne 6y ago
Retail investors lost millions because of an inability to buy?
- tonfa 6y ago
  I guess the theory from some people is that if they could have kept buying then the stock would go up (and trigger the squeeze). Not sure I buy it (esp with the amount of call options that are just going to magnify the move up but also the move down).
  - beagle3 6y ago
    This has been happening every day for a few days before the stop (perhaps a few weeks at a lower rate). Why don’t you “buy it”?
  - Armisael16 6y ago
    At the very least the price wouldn’t’ve have dropped 70%. That was an attack by institutional investors who sold relatively small amounts of stock at very low values. Normally retail users would’ve snapped it up cheap, but they can’t do that when their trading platform makes it impossible to buy.
- conceptme 6y ago
  It will scare people off triggering a sell
- jfim 6y ago
  I believe some margin positions got called and closed, which might not have been if more people continued to pump the stock by buying more.
- Closi 6y ago
  An inability to buy means an inability to squeeze the short harder, and depending on how hard you have squeezed that can affect the overall success of the squeeze. Also they apparently forced sale on some accounts, which combined with an inability to buy more, definitely affected stock prices.
  - onethought 6y ago
    But you won’t lose. Right?
    - gitrog 6y ago
      They forced sale on stocks at an earlier (lower) price. Some people were literally forced to make a loss.
    - comboy 6y ago
      Imagine buying a lottery ticket from me. I run the lottery. I print it out, look at it, oooh, you know what, I can't sell you this one. Of course you don't need to pay. Goodbye. Did you lose money?
      - feelix 6y ago
        you completely missed the point. the fact that the squeeze fails means that it fails to squeeze the shorts of the hedge fund, which is the one that will be coughing up billions to pay all the retailers. So yes, the retailers that are buying shares at higher prices will indeed lose actual real money if the short squeeze fails. And it will be due to what is likely to be market manipulation (ie screwing over its clients) by Robinhood
        briefcomment 6y ago
        I think that’s GPs point.
        feelix 6y ago
- sidibe 6y ago
  The people who probably would have lost their money anyways (because they were waiting for more suckers to push the price higher) now have an excuse (other retail buyers couldn't open new positions). People who realized those were the suckers stomached selling while it wasn't as high as yesterday but still astronomical. The anger at Robinhood reminds me of when the government in Nigeria cracked down on MMM ponzi scheme. People were furious because they all assumrd they wouldn't be the bag holders at the end. But here there's been a full day to close positions so I'm fairly sure the people who aren't doing it now wouldn't have done it whenever the stock starting going down in other circumstances
  - beagle3 6y ago
    Except, as SI/Float was at 139%, there was a guaranteed sucker to buy it off them at basically any price - unlike in a Ponzi scheme where you never know if there’s going to be another sucker.
    - egwor 6y ago
      Hasn't SI/Float been around there for more than a year? I'm not an expert on this. Source: https://www.ortex.com/symbol/nyse/gme/short_interest https://www.ortex.com/symbol/nyse/gme/short_interest
      - beagle3 6y ago
        Seems like the 100% line was crossed in Jun 2019 - and it does indeed mean that going long since that point, at almost any price was fundamentally sound investment and not ponzi; It is a pyramid, but the base layer of “suckers”, those that end up taking the losses in a standard ponzi/pyramid are already determined ; they are the most finance literate people in the market, and they did it willingly. WSB is just adding layers in the middle which is rational. The short sellers knew their risks perfectly well and did it willingly. They just didn’t expect anyone will figure out how to take advantage of the setup they created.
        MrMan 6y ago
- joshfraser 6y ago
  Yes, blocking half of your order book with cause the price to fall.
- codesternews 6y ago
  Yes, they are forced to sell and other robinhood users could not buy. It means they allowed selling and restricted buying that will eventually make stock goes down because no other person even if they want to can't buy.
  - egwor 6y ago
    So the market price which is made from all transactions from all brokers will drop because robinhood users could not buy. That makes no sense to me. If they really wanted to buy they could use another broker? If the market really is dropping then tough luck. You can lose all your money investing in the stock market. If you're leveraged you can lose even more (which might explain why some accounts were closed).
    - sdan 6y ago
      As I said, stocks are inherently risky and should not open positions thinking you’ll strike it rich overnight; what I am saying is that robinhood swiftly stopped retail price action ( because most retail volume is from RH) which caused the price to plummet. Volume for amc and gme also got split for the day yesterday compared to Tuesday (which can be blamed because other brokers also eventually stopped trading these stocks later in the day).
    - KptMarchewa 6y ago
      >That makes no sense to me. If they really wanted to buy they could use another broker? That's assuming you have multiple accounts in brokerages, and multiple other ones also have blocked buys (for example Interactive Brokers). Market will be dropping if significant number of people who want to buy are unable due to third party actions, that's exactly what's market manipulation.
    - smileybarry 6y ago
      Robinhood, apart from holding a big chunk of the market, were not the only brokers freezing buys on GME, AMC and others -- Trading 212, eToro, CashApp, and more I forgot by now froze it as well. Your only options were "non-app" brokers, like a bank stock portfolio, which no one could really open on the same day.
- tarsinge 6y ago
  If you sell something and there is no buyer, what happens to the price?
  - otherme123 6y ago
    There is a buyer: the shorters are desperately trying to close their positions (i.e. buying), and they are not buying through RobinHood.w But in a more normal position, if there is not buyers at current offering prices, you try to sell at a lower price. Thus, the price drops.
- PartiallyTyped 6y ago
  Yes. Low volume means you can launch a short attack and drop the price because there is nobody capable of buying. I saw my portfolio losing > 50% of equity during the attack.
- Tenoke 6y ago
  When the inability to buy itself triggers a 50+% drop in the stocks you hold within minutes then yeah, it does.
- jonathanstrange 6y ago
  It looks like deliberate market manipulation by the broker, to their own advantage and apparently also to the advantage of some Hedge Funds with close connections to them.

by sdan 6y ago

amscanne 6y ago

Retail investors lost millions because of an inability to buy?

tonfa 6y ago
I guess the theory from some people is that if they could have kept buying then the stock would go up (and trigger the squeeze). Not sure I buy it (esp with the amount of call options that are just going to magnify the move up but also the move down).
- beagle3 6y ago
  This has been happening every day for a few days before the stop (perhaps a few weeks at a lower rate). Why don’t you “buy it”?
- Armisael16 6y ago
  At the very least the price wouldn’t’ve have dropped 70%. That was an attack by institutional investors who sold relatively small amounts of stock at very low values. Normally retail users would’ve snapped it up cheap, but they can’t do that when their trading platform makes it impossible to buy.
conceptme 6y ago
It will scare people off triggering a sell
jfim 6y ago
I believe some margin positions got called and closed, which might not have been if more people continued to pump the stock by buying more.
Closi 6y ago
An inability to buy means an inability to squeeze the short harder, and depending on how hard you have squeezed that can affect the overall success of the squeeze. Also they apparently forced sale on some accounts, which combined with an inability to buy more, definitely affected stock prices.
- onethought 6y ago
  But you won’t lose. Right?
  - gitrog 6y ago
    They forced sale on stocks at an earlier (lower) price. Some people were literally forced to make a loss.
  - comboy 6y ago
    Imagine buying a lottery ticket from me. I run the lottery. I print it out, look at it, oooh, you know what, I can't sell you this one. Of course you don't need to pay. Goodbye. Did you lose money?
    - feelix 6y ago
      you completely missed the point. the fact that the squeeze fails means that it fails to squeeze the shorts of the hedge fund, which is the one that will be coughing up billions to pay all the retailers. So yes, the retailers that are buying shares at higher prices will indeed lose actual real money if the short squeeze fails. And it will be due to what is likely to be market manipulation (ie screwing over its clients) by Robinhood
      - briefcomment 6y ago
        I think that’s GPs point.
        feelix 6y ago
sidibe 6y ago
The people who probably would have lost their money anyways (because they were waiting for more suckers to push the price higher) now have an excuse (other retail buyers couldn't open new positions). People who realized those were the suckers stomached selling while it wasn't as high as yesterday but still astronomical. The anger at Robinhood reminds me of when the government in Nigeria cracked down on MMM ponzi scheme. People were furious because they all assumrd they wouldn't be the bag holders at the end. But here there's been a full day to close positions so I'm fairly sure the people who aren't doing it now wouldn't have done it whenever the stock starting going down in other circumstances
- beagle3 6y ago
  Except, as SI/Float was at 139%, there was a guaranteed sucker to buy it off them at basically any price - unlike in a Ponzi scheme where you never know if there’s going to be another sucker.
  - egwor 6y ago
    Hasn't SI/Float been around there for more than a year? I'm not an expert on this. Source: https://www.ortex.com/symbol/nyse/gme/short_interest https://www.ortex.com/symbol/nyse/gme/short_interest
    - beagle3 6y ago
      Seems like the 100% line was crossed in Jun 2019 - and it does indeed mean that going long since that point, at almost any price was fundamentally sound investment and not ponzi; It is a pyramid, but the base layer of “suckers”, those that end up taking the losses in a standard ponzi/pyramid are already determined ; they are the most finance literate people in the market, and they did it willingly. WSB is just adding layers in the middle which is rational. The short sellers knew their risks perfectly well and did it willingly. They just didn’t expect anyone will figure out how to take advantage of the setup they created.
      - MrMan 6y ago
joshfraser 6y ago
Yes, blocking half of your order book with cause the price to fall.
codesternews 6y ago
Yes, they are forced to sell and other robinhood users could not buy. It means they allowed selling and restricted buying that will eventually make stock goes down because no other person even if they want to can't buy.
- egwor 6y ago
  So the market price which is made from all transactions from all brokers will drop because robinhood users could not buy. That makes no sense to me. If they really wanted to buy they could use another broker? If the market really is dropping then tough luck. You can lose all your money investing in the stock market. If you're leveraged you can lose even more (which might explain why some accounts were closed).
  - sdan 6y ago
    As I said, stocks are inherently risky and should not open positions thinking you’ll strike it rich overnight; what I am saying is that robinhood swiftly stopped retail price action ( because most retail volume is from RH) which caused the price to plummet. Volume for amc and gme also got split for the day yesterday compared to Tuesday (which can be blamed because other brokers also eventually stopped trading these stocks later in the day).
  - KptMarchewa 6y ago
    >That makes no sense to me. If they really wanted to buy they could use another broker? That's assuming you have multiple accounts in brokerages, and multiple other ones also have blocked buys (for example Interactive Brokers). Market will be dropping if significant number of people who want to buy are unable due to third party actions, that's exactly what's market manipulation.
  - smileybarry 6y ago
    Robinhood, apart from holding a big chunk of the market, were not the only brokers freezing buys on GME, AMC and others -- Trading 212, eToro, CashApp, and more I forgot by now froze it as well. Your only options were "non-app" brokers, like a bank stock portfolio, which no one could really open on the same day.
tarsinge 6y ago
If you sell something and there is no buyer, what happens to the price?
- otherme123 6y ago
  There is a buyer: the shorters are desperately trying to close their positions (i.e. buying), and they are not buying through RobinHood.w But in a more normal position, if there is not buyers at current offering prices, you try to sell at a lower price. Thus, the price drops.
PartiallyTyped 6y ago
Yes. Low volume means you can launch a short attack and drop the price because there is nobody capable of buying. I saw my portfolio losing > 50% of equity during the attack.
Tenoke 6y ago
When the inability to buy itself triggers a 50+% drop in the stocks you hold within minutes then yeah, it does.
jonathanstrange 6y ago
It looks like deliberate market manipulation by the broker, to their own advantage and apparently also to the advantage of some Hedge Funds with close connections to them.