3 ms·

Yesterday premarket when Robinhood announced the cessation of trading in these ultra volatile stocks, was there a deep analysis of what led them to that decisio

by dkrich 6y ago

Yesterday premarket when Robinhood announced the cessation of trading in these ultra volatile stocks, was there a deep analysis of what led them to that decision? A measured consideration of why they might do that? Of course not. Immediately a false narrative was created that citadel forced them to do it under threat that they would stop their order flow. Had any politician or public figure merely suggested we let the CEO of Robinhood explain the decision, they would’ve been dragged by the Twitter mob. Just look at how Steve Cohen, Lee Cooperman and John Fortt were shamed for raising what I believed to be perfectly legitimate questions. But nobody is interested in legitimate questions when it’s hive mind mob rule which is what always takes hold in a bubble. In fact the vilification of naysayers is one of the tell tale signs of a speculative bubble. To answer the last question who are the speculators here, shorts or wsbers? Both. But what I’m talking about are the speculators who are simply buying this up with the expectation they will make huge gains like deep fucking value. They can say all they want about how they don’t care about potential losses and this is something bigger. Total nonsense. Let’s see who gets blamed and who plays the victim if we get a crash. It’s an interesting world when Mark Cuban and chamath palyhapitia can be portrayed as champions of the little guy when they have made billions of dollars at their expense. Chamath takes a SPAC public every Tuesday. Who do we think are buying these up? Warren Buffett? Didn’t Cuban make his fortune selling a worthless business to Yahoo? These guys are using this entire thing to build their own popularity.

FireBeyond 6y ago
> Just look at how Steve Cohen, Lee Cooperman and John Fortt were shamed for raising what I believed to be perfectly legitimate questions. Leon got shamed not for his commentary on the speculation around the stock, but for the complete failure-to-read-the-room commentary on his taxes, commenting on marginal tax rates and "fair shares" as "bullshit": > "This fair share is a bullshit concept. It’s just a way of attacking wealthy people, and I think it’s inappropriate," Cooperman said Thursday. “We’ve all got to work together and pull together.”
- dalbasal 6y ago
  ... He also blamed stimulus cheques. Especially nasty considering that the corporate stimulus, just prior, had a similar effect on market price inflation. It was beyond "not reading the room." He literally believes that only the people like him are responsible enough to play the market, or even have money at all.
dalbasal 6y ago
Of course mid-sprint reporting is all over the place. That said, so has the financial press and insiders. In fact, during an interview of NASDAQ's CEO, the suggestion was floated that this is the Russians or something. That rumour was dropped by professional journalists and insiders. In fact, the regular, non financial press had a far more curious response than the financial press... they even read reddit. Going back to "Citadel rumour.." It certainly was off the cuff and certainly doesn't encompasse everything. That said, RH is financially dependant on Citadel and Citadel is in a position to benefit from RH's decision. Whatever you think of Cuban, these people are being drawn in for the same reason you and I are talking about it. It's saucy. I think your "vilification of naysayers" point is off-mark. This is not about whether or not GME bets make money. The whole saga is a naysaying of sorts. Naysaying to the rigging. I suspect I'm probably on the same side as you regarding the larger point. Speculation, HFT, etc are negatives to be curtailed not expanded. But, the "me but not thee" way that financial markets have been structured is an outrage. The "revenge for 08'" stuff is symbolic. But, the symbolism is fairly subtle. The firms being protected from long tail risk (right, wrongly or even essentially are, again, being shielded from long term risk on bets only they have access to. This includes clearing houses and market makers. The "systemic risk" is the risk that these guys lose money. Stability is premised on them not losing money.
content_sesh 6y ago
Maybe if Robinhood had done literally anything to not appear like they were colluding with their customer Citadel people wouldn't have constructed "false narratives". Its some impressive mental gymnastics to see a broker lock out all of their retail investors (remember, you were completely free to liquidate your position) and offer almost no explanation, and blame the investors for being hasty and jumping to conclusions. And for that matter, calling these narratives false seems premature. As far as I know there hasn't been any actual investigation by regulators into the reason Robinhood took those steps (although multiple politicians from across the spectrum have called for one). It seems many public figures would love to give Robinhood the opportunity to explain themselves
- dkrich 6y ago
  > Its some impressive mental gymnastics to see a broker lock out all of their retail investors (remember, you were completely free to liquidate your position) and offer almost no explanation, and blame the investors for being hasty and jumping to conclusions. People don’t seem to realize that brokerages do this all the time to limit their risk. If you have less than $25k in a trading account for example, a brokerage is mandated by law to not allow day trading (that is entering and exiting the same position on the same day). Do you know what happens if you do? You are labeled a pattern day trader and you can only exit positions. Actually the fact that they were letting people exit trades was a big clue to me that this was risk mitigation while this collusion with citadel narrative was making the rounds.
  - mancerayder 6y ago
    The motivation is one thing, the end result is that it created a slanted playing field where one party was blocked from buying, but not selling, and the other party (the losing short side) could do either unrestricted. Not only that, but it was pre emptive. We can talk all day about GME, but the handful of other names like BB hadn't even reached that point. There was simply a risk of a short squeeze and we slanted the field here, too, enough time for the losing side to mitigate their risk. Conspiracy or no, the end result is so far from your day trading 25K minimum example. Your example is a rule that already existed going in, rather than a rule that changed temporarily to convenience one side for a day.

by dkrich 6y ago

FireBeyond 6y ago

> Just look at how Steve Cohen, Lee Cooperman and John Fortt were shamed for raising what I believed to be perfectly legitimate questions. Leon got shamed not for his commentary on the speculation around the stock, but for the complete failure-to-read-the-room commentary on his taxes, commenting on marginal tax rates and "fair shares" as "bullshit": > "This fair share is a bullshit concept. It’s just a way of attacking wealthy people, and I think it’s inappropriate," Cooperman said Thursday. “We’ve all got to work together and pull together.”

dalbasal 6y ago
... He also blamed stimulus cheques. Especially nasty considering that the corporate stimulus, just prior, had a similar effect on market price inflation. It was beyond "not reading the room." He literally believes that only the people like him are responsible enough to play the market, or even have money at all.

dalbasal 6y ago

Of course mid-sprint reporting is all over the place. That said, so has the financial press and insiders. In fact, during an interview of NASDAQ's CEO, the suggestion was floated that this is the Russians or something. That rumour was dropped by professional journalists and insiders. In fact, the regular, non financial press had a far more curious response than the financial press... they even read reddit. Going back to "Citadel rumour.." It certainly was off the cuff and certainly doesn't encompasse everything. That said, RH is financially dependant on Citadel and Citadel is in a position to benefit from RH's decision. Whatever you think of Cuban, these people are being drawn in for the same reason you and I are talking about it. It's saucy. I think your "vilification of naysayers" point is off-mark. This is not about whether or not GME bets make money. The whole saga is a naysaying of sorts. Naysaying to the rigging. I suspect I'm probably on the same side as you regarding the larger point. Speculation, HFT, etc are negatives to be curtailed not expanded. But, the "me but not thee" way that financial markets have been structured is an outrage. The "revenge for 08'" stuff is symbolic. But, the symbolism is fairly subtle. The firms being protected from long tail risk (right, wrongly or even essentially are, again, being shielded from long term risk on bets only they have access to. This includes clearing houses and market makers. The "systemic risk" is the risk that these guys lose money. Stability is premised on them not losing money.

content_sesh 6y ago

Maybe if Robinhood had done literally anything to not appear like they were colluding with their customer Citadel people wouldn't have constructed "false narratives". Its some impressive mental gymnastics to see a broker lock out all of their retail investors (remember, you were completely free to liquidate your position) and offer almost no explanation, and blame the investors for being hasty and jumping to conclusions. And for that matter, calling these narratives false seems premature. As far as I know there hasn't been any actual investigation by regulators into the reason Robinhood took those steps (although multiple politicians from across the spectrum have called for one). It seems many public figures would love to give Robinhood the opportunity to explain themselves

dkrich 6y ago
> Its some impressive mental gymnastics to see a broker lock out all of their retail investors (remember, you were completely free to liquidate your position) and offer almost no explanation, and blame the investors for being hasty and jumping to conclusions. People don’t seem to realize that brokerages do this all the time to limit their risk. If you have less than $25k in a trading account for example, a brokerage is mandated by law to not allow day trading (that is entering and exiting the same position on the same day). Do you know what happens if you do? You are labeled a pattern day trader and you can only exit positions. Actually the fact that they were letting people exit trades was a big clue to me that this was risk mitigation while this collusion with citadel narrative was making the rounds.
- mancerayder 6y ago
  The motivation is one thing, the end result is that it created a slanted playing field where one party was blocked from buying, but not selling, and the other party (the losing short side) could do either unrestricted. Not only that, but it was pre emptive. We can talk all day about GME, but the handful of other names like BB hadn't even reached that point. There was simply a risk of a short squeeze and we slanted the field here, too, enough time for the losing side to mitigate their risk. Conspiracy or no, the end result is so far from your day trading 25K minimum example. Your example is a rule that already existed going in, rather than a rule that changed temporarily to convenience one side for a day.