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Nothing about robinhood disabling the buyside players but not the sellside?

by secondcoming 5y ago

MattGaiser 5y ago
Didn't a bunch of brokers do that?
- real-dino 5y ago
  A bunch did, a bunch didn't. T212 did in the UK and they have been closed to new accounts since the incident. https://www.reddit.com/r/Superstonk/comments/mowzjk/the_broker_preparation_guide/ https://www.reddit.com/r/Superstonk/comments/mowzjk/the_brok... has a list of brokers, who restricted trades and their clearing houses.
Sander_Marechal 5y ago
I think that's a separate complaint that's being looked in to
paulgb 5y ago
I maintain that that was the right thing to do, given the situation they were in (and not excusing them for not avoiding getting into that situation) The way I see it, if I own a stock and want to sell it, my broker’s duty in that situation should be exclusively to me. Even if they don’t have the ability to let other customers enter a position, they shouldn’t block the exit gates for me in a naive attempt to maintain balance of buy and sell orders. If it could be shown that they did this intentionally to manipulate the market, of course they should be fined for it. But if the truth is in line with the official statement at the time, I don’t see wrongdoing.
- McDyver 5y ago
  You should be able to sell it, yes. But who are you selling it to, if Robinhood is preventing you (and your peers) from buying?
  - paulgb 5y ago
    People who use less-crappy brokers, via exchanges. Or market makers, if they are willing to beat the best current offer on the exchanges.
    - freshhawk 5y ago
      So a smaller pool of people than those people + people on robinhood. So nice convenient price pressure is applied. Which I think is the OPs point.
      - paulgb 5y ago
        Convenient for whom? If the implication is that they were trying to manipulate the market, I agree they should be in trouble, I just don’t think that’s the case. I’d note that the other choice they could have made — blocking selling when it was not necessary — would also have the appearance of market manipulation (in the other direction).
  - thaumasiotes 5y ago
    People who aren't on Robinhood.
- randomcarbloke 5y ago
  it was absolutely the right thing to do, they would've been massively over-exposed, somehow it's painted as villainous and underhanded. If they had lots of deposits and went under surely people would've been less than impressed and asking why they didn't take action sooner.
  - namdnay 5y ago
    it was the right thing to do on the moment, but what was wrong was: a) cutting corners and ending up in that position b) not being completely transparent about what was happening
    - jimmydorry 5y ago
      c) changing story multiple times in an attempt to save face. The CEO claimed they had no liquidity issues at all, then claimed they didn’t have enough money to meet margin requirements. Since then, we have found out that the DTCC that asked for more collateral recanted prior to market open but RH still discontinued retail buying anyway. Like an IT outages reflects poorly on a tech company, not being able to manage your books reflects poorly on a financial company.
    - gruez 5y ago
      >a) cutting corners and ending up in that position What corners were cut? That they didn't prepare for a unprecedented buy wave in meme stocks along with a massive increase in deposit requirements?
      - namdnay 5y ago
        Opening (and pushing) call options to a broad userbase without first ensuring they had the capital reserves and the access to additional funding to top-up those reserves it's a bit easy for robinhood to say "fuck the old banks, we don't need to be part of their network, and we're going to open complex derivative trading to everyone", and then as soon as everyone starts buying massive amounts of call options, suddenly realising that they need massive collateral and they don't have any partners to rely on
namdnay 5y ago
If you're getting margin calls on your exposure to a certain stock, it makes sense to allow people to sell (thus reducing your exposure) rather than buy

Nothing about robinhood disabling the buyside players but not the sellside?

MattGaiser 5y ago

Didn't a bunch of brokers do that?

real-dino 5y ago
A bunch did, a bunch didn't. T212 did in the UK and they have been closed to new accounts since the incident. https://www.reddit.com/r/Superstonk/comments/mowzjk/the_broker_preparation_guide/ https://www.reddit.com/r/Superstonk/comments/mowzjk/the_brok... has a list of brokers, who restricted trades and their clearing houses.

Sander_Marechal 5y ago

I think that's a separate complaint that's being looked in to

paulgb 5y ago

I maintain that that was the right thing to do, given the situation they were in (and not excusing them for not avoiding getting into that situation) The way I see it, if I own a stock and want to sell it, my broker’s duty in that situation should be exclusively to me. Even if they don’t have the ability to let other customers enter a position, they shouldn’t block the exit gates for me in a naive attempt to maintain balance of buy and sell orders. If it could be shown that they did this intentionally to manipulate the market, of course they should be fined for it. But if the truth is in line with the official statement at the time, I don’t see wrongdoing.

McDyver 5y ago
You should be able to sell it, yes. But who are you selling it to, if Robinhood is preventing you (and your peers) from buying?
- paulgb 5y ago
  People who use less-crappy brokers, via exchanges. Or market makers, if they are willing to beat the best current offer on the exchanges.
  - freshhawk 5y ago
    So a smaller pool of people than those people + people on robinhood. So nice convenient price pressure is applied. Which I think is the OPs point.
    - paulgb 5y ago
      Convenient for whom? If the implication is that they were trying to manipulate the market, I agree they should be in trouble, I just don’t think that’s the case. I’d note that the other choice they could have made — blocking selling when it was not necessary — would also have the appearance of market manipulation (in the other direction).
- thaumasiotes 5y ago
  People who aren't on Robinhood.
randomcarbloke 5y ago
it was absolutely the right thing to do, they would've been massively over-exposed, somehow it's painted as villainous and underhanded. If they had lots of deposits and went under surely people would've been less than impressed and asking why they didn't take action sooner.
- namdnay 5y ago
  it was the right thing to do on the moment, but what was wrong was: a) cutting corners and ending up in that position b) not being completely transparent about what was happening
  - jimmydorry 5y ago
    c) changing story multiple times in an attempt to save face. The CEO claimed they had no liquidity issues at all, then claimed they didn’t have enough money to meet margin requirements. Since then, we have found out that the DTCC that asked for more collateral recanted prior to market open but RH still discontinued retail buying anyway. Like an IT outages reflects poorly on a tech company, not being able to manage your books reflects poorly on a financial company.
  - gruez 5y ago
    >a) cutting corners and ending up in that position What corners were cut? That they didn't prepare for a unprecedented buy wave in meme stocks along with a massive increase in deposit requirements?
    - namdnay 5y ago
      Opening (and pushing) call options to a broad userbase without first ensuring they had the capital reserves and the access to additional funding to top-up those reserves it's a bit easy for robinhood to say "fuck the old banks, we don't need to be part of their network, and we're going to open complex derivative trading to everyone", and then as soon as everyone starts buying massive amounts of call options, suddenly realising that they need massive collateral and they don't have any partners to rely on

namdnay 5y ago

If you're getting margin calls on your exposure to a certain stock, it makes sense to allow people to sell (thus reducing your exposure) rather than buy