4 ms·

If they had blocked selling and it later came out that they didn't need to, people who had wanted to sell would be understandably pissed as well. It's a damned-

by paulgb 6y ago

If they had blocked selling and it later came out that they didn't need to, people who had wanted to sell would be understandably pissed as well. It's a damned-if-you-do, damned-if-you-don't situation. I think they chose the least-bad of the two paths, because even if they blocked their own customers from selling, customers holding GME at other firms would be able to sell. Would you want to be with a brokerage who blocked you from selling when they could have allowed it?

CivBase 6y ago
I absolutely would prefer that and I don't even own GME. Anything else is blatant market manipulation, whether or not it's intended. IMO, it should be illegal to facilitate only selling or only buying. Brokers should be forced to offer both or neither.
- shakezula 6y ago
  Absolutely. Just imagine the inverse scenario here where they had a conflict of interest in a long position and turned off selling. Turning off both is fine if they’re not able to legally handle new buys. But just turning off buys is also pretty freaking sus.
- tonfa 6y ago
  You could still buy if you were short (close your position). And allegedly there's many more shorts than long positions.
- gruez 6y ago
  >IMO, it should be illegal to facilitate only selling or only buying. Brokers should be forced to offer both or neither. Just because you shut down trading at one brokerage doesn't mean the price is frozen. It could still drop like a rock, and you'd still end up with a bunch of pissed off customers saying that they couldn't exit in time.
  - CivBase 6y ago
    Yeah, but at least you as a broker wouldn't have a hand in the price change. If they piss off their customers who wanted to sell, that's just how it is. That will give them an incentive to keep both options open instead of restricting traders to only buying or only selling when it suits them.
    - gruez 6y ago
      >Yeah, but at least you as a broker wouldn't have a hand in the price change. If they piss off their customers who wanted to sell, that's just how it is No, the price change occurred when new money couldn't flow into GME, due to deposit requirements. Stopping sells when there isn't any technical reason to do so is also an intervention, and arguably a bigger one. > That will give them an incentive to keep both options open instead of restricting traders to only buying or only selling when it suits them. And doing the reverse suits the HODLers, who would love nothing more than to prevent others from breaking rank and tanking the stock price, but sucks for everyone else who wants to get off the wild ride. On Thursday MUST asset management sold off its stake in GME. If people weren't allowed to get out, and it tanked further, I could easily imagine accusations that robinhood was doing it to the benefit of wall st firms, to eliminate competition for sells.
      - CivBase 6y ago
        I believe you're missing the big picture here. If a broker only allows purchases of a stock, they push the trajectory of that stock value up. If they only allow sales, they push the trajectory down. Brokers should not have the power to affect the trajectory of a stock. It is a conflict of interest for their business. Yes, it would absolutely suck for stock holders if sales were restricted while the price was decreasing. In addition to not being able to exclusively restrict buying or selling, brokers should also probably be made partially liable for losses incurred as a result of restrictions on sales. It should also be a huge hit to their brand when they are forced to lock down a stock because of liquidity issues. But at the end of the day, it is a conflict of interest for brokers to artificially affect stock values. What they did is not currently illegal (so far as I can tell), and it may not have even been their intent to manipulate the market, but there's no way around it. That is exactly what happened.
youeseh 6y ago
The order should have come from the SEC to block trading across the board. No buying and no selling until the current orders are settled and there's liquidity available for more trading.

by paulgb 6y ago

CivBase 6y ago

I absolutely would prefer that and I don't even own GME. Anything else is blatant market manipulation, whether or not it's intended. IMO, it should be illegal to facilitate only selling or only buying. Brokers should be forced to offer both or neither.

shakezula 6y ago
Absolutely. Just imagine the inverse scenario here where they had a conflict of interest in a long position and turned off selling. Turning off both is fine if they’re not able to legally handle new buys. But just turning off buys is also pretty freaking sus.
tonfa 6y ago
You could still buy if you were short (close your position). And allegedly there's many more shorts than long positions.
gruez 6y ago
>IMO, it should be illegal to facilitate only selling or only buying. Brokers should be forced to offer both or neither. Just because you shut down trading at one brokerage doesn't mean the price is frozen. It could still drop like a rock, and you'd still end up with a bunch of pissed off customers saying that they couldn't exit in time.
- CivBase 6y ago
  Yeah, but at least you as a broker wouldn't have a hand in the price change. If they piss off their customers who wanted to sell, that's just how it is. That will give them an incentive to keep both options open instead of restricting traders to only buying or only selling when it suits them.
  - gruez 6y ago
    >Yeah, but at least you as a broker wouldn't have a hand in the price change. If they piss off their customers who wanted to sell, that's just how it is No, the price change occurred when new money couldn't flow into GME, due to deposit requirements. Stopping sells when there isn't any technical reason to do so is also an intervention, and arguably a bigger one. > That will give them an incentive to keep both options open instead of restricting traders to only buying or only selling when it suits them. And doing the reverse suits the HODLers, who would love nothing more than to prevent others from breaking rank and tanking the stock price, but sucks for everyone else who wants to get off the wild ride. On Thursday MUST asset management sold off its stake in GME. If people weren't allowed to get out, and it tanked further, I could easily imagine accusations that robinhood was doing it to the benefit of wall st firms, to eliminate competition for sells.
    - CivBase 6y ago
      I believe you're missing the big picture here. If a broker only allows purchases of a stock, they push the trajectory of that stock value up. If they only allow sales, they push the trajectory down. Brokers should not have the power to affect the trajectory of a stock. It is a conflict of interest for their business. Yes, it would absolutely suck for stock holders if sales were restricted while the price was decreasing. In addition to not being able to exclusively restrict buying or selling, brokers should also probably be made partially liable for losses incurred as a result of restrictions on sales. It should also be a huge hit to their brand when they are forced to lock down a stock because of liquidity issues. But at the end of the day, it is a conflict of interest for brokers to artificially affect stock values. What they did is not currently illegal (so far as I can tell), and it may not have even been their intent to manipulate the market, but there's no way around it. That is exactly what happened.

youeseh 6y ago

The order should have come from the SEC to block trading across the board. No buying and no selling until the current orders are settled and there's liquidity available for more trading.