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Matt Levine lays out pretty clearly what happened and liquidity requirements is a lot closer than your assumed conspiracy: https://www.bloomberg.com/opinion/art

Matt Levine lays out pretty clearly what happened and liquidity requirements is a lot closer than your assumed conspiracy: https://www.bloomberg.com/opinion/articles/2021-01-29/reddit-traders-on-robinhood-are-on-both-sides-of-gamestop https://www.bloomberg.com/opinion/articles/2021-01-29/reddit...

dvt 6y ago
It feels like you're poisoning the well here. There's no conspiracy; there's a clear conflict of interest. Obviously, I don't know for a fact if RH acted on that conflict of interest, but it seems crazy to me that people are willing to give financial institutions the benefit of the doubt after 2008. I'm personally not.
- creddit 6y ago
  > It feels like you're poisoning the well here. How do you mean? I don't quite understand in this context. RH wasn't the only broker to suspend trading in GME et al. Are all of the other brokers as equally beholden to Citadel? EDIT: I'd be more happy to believe in the possibility of a conspiracy at the DTCC level, but even then the logic seems fairly sound for collateral issues here.
- jcranmer 6y ago
  So we should discount the evidence given by many independent actors that the issue behind Thursday's restriction of trades (that occurred on several independent retail platforms!) was a mundane issue regarding risk in clearance in favor of the hypothesis that RH was colluding^H^H^H^H^H^H^H^H taking the sword for other financial institutions, because... some financial people lied a decade ago? There's a perfectly rational explanation for what happened yesterday that is backed up with an understanding of how the financial system actually not works, not the pretense that is usually pretended by the public, and that doesn't involve a nefarious scheme to manipulate the market. Don't let your desire to vilify Robinhood and the financial system in general blind yourself from evidence to the contrary.
  - dvt 6y ago
    > that occurred on several independent retail platforms Let's be fair: it only occurred on zero-commission platforms (Fidelity had no problems, for example) that sell their order flows to hedge funds -- some of which specialize in shorting. Is it really likely that they just all experienced "liquidity issues" at the same time and had to block just the buying of $AMC and $GME at the same time?
    - jcranmer 6y ago
      Yes. They all use the same underlying vendor to clear their actual trades, and that vendor raised the necessary collateral for all of its clients (the platforms) at the same time.
      - dvt 6y ago
        All platforms that blocked trading (sorry, I mean blocked buying) use different clearinghouses (WeBull is Apex, RH is Clearing by Robinhood, TD Ameritrade is TD Ameritrade Clearing), so I'm not sure if I buy this.
        jcranmer 6y ago
        When I say "clearing house", I mean DTCC. I'm not entirely sure what specific role it plays because I honestly don't care about that level of financial detail, but I do know that it's basically the entity that everything ultimately routes through.
        tptacek 6y ago
        I'm not an authority on any of this stuff but I believe you've confused clearing brokers with clearinghouses.
      - maest 6y ago
        Nit: RH is self clearing, most other retail brokerages use Apex. Both Apex and RH had the same collateral issues though.
cccc4all 6y ago
Classic shill article. The bottom line is this, GME is STILL shorted over 100%. That means, the short seller has to buy at ANY price. All you have to do is simply buy at current price and hold. The item you're buying may be GME stock, but now it also has an attached buyer that is contractually obligated to buy at ANY price. That is the premium people are paying for GME stock. Shill articles like this are mouth pieces for billionaire vulture short sellers, trying to FUD the market and get people to sell GME stock. All people have to do is HOLD the stock and the price that short sellers have to buy it back will go up.
- majormajor 6y ago
  > All you have to do is simply buy at current price and hold. The item you're buying may be GME stock, but now it also has an attached buyer that is contractually obligated to buy at ANY price. That is the premium people are paying for GME stock. If you buy high and hold, they can't buy from you. So even if they buy at a high price from someone else... which is great for that someone else, sure... what are you getting out of it? If you bought earlier and are trying to sell now, the answer is obvious, but then... that's a VERY different game than the one people claim to be playing.
- zozbot234 6y ago
  > All people have to do is HODL the stock Fixed that for you. The underlying problem with that plan is that "all people" will never manage to HODL a stock that keeps rising. Sooner or later a few lucky HODLers will take their gains, and then the whole scheme will end. It's a bubble, no different than the previous bear raid was. The truth is most likely in the middle.
  - cccc4all 6y ago
    Look at the math, the stock is shorted over 100%. Around 120% last time I checked. Who has 120% of stocks to sell back to billionaire short sellers? The billionaire vulture short sellers created this mess. Now, they are the one's that have to pay the price.
    - 6y ago

dvt 6y ago

It feels like you're poisoning the well here. There's no conspiracy; there's a clear conflict of interest. Obviously, I don't know for a fact if RH acted on that conflict of interest, but it seems crazy to me that people are willing to give financial institutions the benefit of the doubt after 2008. I'm personally not.

creddit 6y ago
> It feels like you're poisoning the well here. How do you mean? I don't quite understand in this context. RH wasn't the only broker to suspend trading in GME et al. Are all of the other brokers as equally beholden to Citadel? EDIT: I'd be more happy to believe in the possibility of a conspiracy at the DTCC level, but even then the logic seems fairly sound for collateral issues here.
jcranmer 6y ago
So we should discount the evidence given by many independent actors that the issue behind Thursday's restriction of trades (that occurred on several independent retail platforms!) was a mundane issue regarding risk in clearance in favor of the hypothesis that RH was colluding^H^H^H^H^H^H^H^H taking the sword for other financial institutions, because... some financial people lied a decade ago? There's a perfectly rational explanation for what happened yesterday that is backed up with an understanding of how the financial system actually not works, not the pretense that is usually pretended by the public, and that doesn't involve a nefarious scheme to manipulate the market. Don't let your desire to vilify Robinhood and the financial system in general blind yourself from evidence to the contrary.
- dvt 6y ago
  > that occurred on several independent retail platforms Let's be fair: it only occurred on zero-commission platforms (Fidelity had no problems, for example) that sell their order flows to hedge funds -- some of which specialize in shorting. Is it really likely that they just all experienced "liquidity issues" at the same time and had to block just the buying of $AMC and $GME at the same time?
  - jcranmer 6y ago
    Yes. They all use the same underlying vendor to clear their actual trades, and that vendor raised the necessary collateral for all of its clients (the platforms) at the same time.
    - dvt 6y ago
      All platforms that blocked trading (sorry, I mean blocked buying) use different clearinghouses (WeBull is Apex, RH is Clearing by Robinhood, TD Ameritrade is TD Ameritrade Clearing), so I'm not sure if I buy this.
      - jcranmer 6y ago
        When I say "clearing house", I mean DTCC. I'm not entirely sure what specific role it plays because I honestly don't care about that level of financial detail, but I do know that it's basically the entity that everything ultimately routes through.
      - tptacek 6y ago
        I'm not an authority on any of this stuff but I believe you've confused clearing brokers with clearinghouses.
    - maest 6y ago
      Nit: RH is self clearing, most other retail brokerages use Apex. Both Apex and RH had the same collateral issues though.

cccc4all 6y ago

Classic shill article. The bottom line is this, GME is STILL shorted over 100%. That means, the short seller has to buy at ANY price. All you have to do is simply buy at current price and hold. The item you're buying may be GME stock, but now it also has an attached buyer that is contractually obligated to buy at ANY price. That is the premium people are paying for GME stock. Shill articles like this are mouth pieces for billionaire vulture short sellers, trying to FUD the market and get people to sell GME stock. All people have to do is HOLD the stock and the price that short sellers have to buy it back will go up.

majormajor 6y ago
> All you have to do is simply buy at current price and hold. The item you're buying may be GME stock, but now it also has an attached buyer that is contractually obligated to buy at ANY price. That is the premium people are paying for GME stock. If you buy high and hold, they can't buy from you. So even if they buy at a high price from someone else... which is great for that someone else, sure... what are you getting out of it? If you bought earlier and are trying to sell now, the answer is obvious, but then... that's a VERY different game than the one people claim to be playing.
zozbot234 6y ago
> All people have to do is HODL the stock Fixed that for you. The underlying problem with that plan is that "all people" will never manage to HODL a stock that keeps rising. Sooner or later a few lucky HODLers will take their gains, and then the whole scheme will end. It's a bubble, no different than the previous bear raid was. The truth is most likely in the middle.
- cccc4all 6y ago
  Look at the math, the stock is shorted over 100%. Around 120% last time I checked. Who has 120% of stocks to sell back to billionaire short sellers? The billionaire vulture short sellers created this mess. Now, they are the one's that have to pay the price.
  - 6y ago