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So basically they’re gonna figure out how to game the system for the institutional investors. I never thought that those “superstonks” folks would be proven rig

by ok_dad 4y ago

So basically they’re gonna figure out how to game the system for the institutional investors. I never thought that those “superstonks” folks would be proven right that the system is rigged, but there it is in plain text.

bdonlan 4y ago
Do you want to elaborate on which specific changes listed in the article are, in your opinion, beneficial to institutional investors at the expense of retail investors, and how?
- kcl 4y ago
  I don't know where this method of argumentation came from, but it's obnoxious and I'm over it. There are even soyjaks for this. Either you don't know and you're being lazy (I don't think this is the case), or you do know and you've generated an asymmetric work request for op that you could've answered and that left unanswered by him casts doubt on his argument. If you have a case to make, make it, instead of this nonsense DoS attack. This is not a defense of op's position.
  - sumy23 4y ago
    Your outrage is unwarranted. The proposed changes are: 1) Limiting PFOF because it creates possible conflicts of interest. 2) Limiting "gamification" of trading via engagement prompts. 3) Adding sub-penny prices to exchanges to harmonize them with market makers. This is to encourage more orders to be sent to exchanges instead of market makers. How are any of these things capitulating to institutional investors?
  - Hasu 4y ago
    Which "argument method", asking questions to gain a further understanding of a position both for yourself and the person you're asking? I'm pretty sure that it came from Socrates.
    - Redoubts 4y ago
      the socratic method gets pretty close to trolling, if you try a little bit.
      - Hasu 4y ago
        Socrates is famous for trolling Athens so hard they made him drink poison.
- Izkata 4y ago
  The article: > The U.S. House Committee on Financial Services on Friday called for the SEC, along with other regulators, to do more to protect the markets from similar events. read more > The impetus for change came from the so-called "Reddit rally" of January 2021, in which GameStop Corp (GME.N) and other "meme stocks" popular on social media surged to extreme highs on buying from investors trading heavily through Robinhood (HOOD.O) and other commission-free retail brokerages. > The intense volatility led to big losses for hedge funds that had bet against the meme stocks. They don't like that the general populace was able to damage hedge funds, so they're making changes to stop it. I don't really know the changes technically, but the intent is right there.
  - sumy23 4y ago
    That's just color commentary from the author of this piece. If you read the rest of the article, the specific changes proposed by the SEC are outlined.
    - somenewaccount1 4y ago
      No, they are not. It just outlines potential things they could examine. None of which are practical, and none of which are likely to move forward. Payment for order flow isn't actually the problem, large institutions not having, or willing ,to part with the margin collateral was. PFOF is just the gas they put in front to hide the real issue, and it's a real good one because removing it also hurts retail investors, making it unlikely to change much. In the end, They will likely just put some rules in requiring these apps to more 'carefully educate thier customers on the risk of PFOF', basically continuing to protect the institution while insulting little retail investors as being too stupid for not reading the TOS carefully enough. You don't have to agree with me, time will tell.
lupire 4y ago
The focus of the article is PFOF, which is what the "hedges" use and exactly what Superstonkers protest about Robinhood. Meme stocks are HODLs; they don't need Robinhood. This SEC action is about exploitative promotion of day trading -- WSB gambling, not MOASS.
hn_throwaway_99 4y ago
"In plain text"??? Please highlight which of the 3 proposals you think will benefit institutional investors: 1. Banning payment for order flow. Basically all of r/wallstreetbets agrees with this, too. 2. Anti "gamification" of stock trading. I've commented on this a million times, but the fact that Robinhood graphs have no labels on their y-axis means those graphs are totally meaningless and only there to act like slot machine lights. If retail traders have the same trading options as before, but with real actual information instead of whizbang blinking lights, I don't see how this is a negative. 3. Competition issues because of dominant market makers. That proposal is 100% a benefit to small retail traders at the expense of huge market makers, which goes directly against your thesis.
- adrr 4y ago
  Banning pay for flow is negative to retail investors. Once they get rid of that, it will be the end of Robinhood and the other brokerage firms will return to pay to trade model. Also you get price improvements when trading with the market makers compared to the exchanges. Market Makers want retail trades because they have less exposure to hedge funds that maybe operating with more information on the directionality of the stock than the market makers. Market makers just want to scrape pennies on the bid ask spread.
rvz 4y ago
> I never thought that those “superstonks” folks would be proven right that the system is rigged, but there it is in plain text. It always has been and it is made for the institutions to rarely lose and be ahead with the smart money over retail traders.
- WJW 4y ago
  "The institutions" typically employ hundreds to thousands of highly talented professionals who get access to sophisticated training and bespoke software tooling. Retail traders often have a day job besides investing, which necessarily limits the time they can spend studying the markets. Tbh this is like putting up the neighborhood poker players against WSOP champions. They might win in the short term but only through luck. Any retail trader getting into any but the most risk-averse type of index investing (ie the type of trade where they are aligned with the wider market anyway) is kidding themselves they can beat people who have at least a 100x advantage compared to them.
- astrange 4y ago
  If I was a retail trader I would simply not buy high PE stocks expecting to make a profit in the next year. It’s not hard to beat them though - just don’t trade. Hold for 30 years in your 401k and you’re good.

by ok_dad 4y ago

bdonlan 4y ago

Do you want to elaborate on which specific changes listed in the article are, in your opinion, beneficial to institutional investors at the expense of retail investors, and how?

kcl 4y ago
I don't know where this method of argumentation came from, but it's obnoxious and I'm over it. There are even soyjaks for this. Either you don't know and you're being lazy (I don't think this is the case), or you do know and you've generated an asymmetric work request for op that you could've answered and that left unanswered by him casts doubt on his argument. If you have a case to make, make it, instead of this nonsense DoS attack. This is not a defense of op's position.
- sumy23 4y ago
  Your outrage is unwarranted. The proposed changes are: 1) Limiting PFOF because it creates possible conflicts of interest. 2) Limiting "gamification" of trading via engagement prompts. 3) Adding sub-penny prices to exchanges to harmonize them with market makers. This is to encourage more orders to be sent to exchanges instead of market makers. How are any of these things capitulating to institutional investors?
- Hasu 4y ago
  Which "argument method", asking questions to gain a further understanding of a position both for yourself and the person you're asking? I'm pretty sure that it came from Socrates.
  - Redoubts 4y ago
    the socratic method gets pretty close to trolling, if you try a little bit.
    - Hasu 4y ago
      Socrates is famous for trolling Athens so hard they made him drink poison.
Izkata 4y ago
The article: > The U.S. House Committee on Financial Services on Friday called for the SEC, along with other regulators, to do more to protect the markets from similar events. read more > The impetus for change came from the so-called "Reddit rally" of January 2021, in which GameStop Corp (GME.N) and other "meme stocks" popular on social media surged to extreme highs on buying from investors trading heavily through Robinhood (HOOD.O) and other commission-free retail brokerages. > The intense volatility led to big losses for hedge funds that had bet against the meme stocks. They don't like that the general populace was able to damage hedge funds, so they're making changes to stop it. I don't really know the changes technically, but the intent is right there.
- sumy23 4y ago
  That's just color commentary from the author of this piece. If you read the rest of the article, the specific changes proposed by the SEC are outlined.
  - somenewaccount1 4y ago
    No, they are not. It just outlines potential things they could examine. None of which are practical, and none of which are likely to move forward. Payment for order flow isn't actually the problem, large institutions not having, or willing ,to part with the margin collateral was. PFOF is just the gas they put in front to hide the real issue, and it's a real good one because removing it also hurts retail investors, making it unlikely to change much. In the end, They will likely just put some rules in requiring these apps to more 'carefully educate thier customers on the risk of PFOF', basically continuing to protect the institution while insulting little retail investors as being too stupid for not reading the TOS carefully enough. You don't have to agree with me, time will tell.

lupire 4y ago

The focus of the article is PFOF, which is what the "hedges" use and exactly what Superstonkers protest about Robinhood. Meme stocks are HODLs; they don't need Robinhood. This SEC action is about exploitative promotion of day trading -- WSB gambling, not MOASS.

hn_throwaway_99 4y ago

"In plain text"??? Please highlight which of the 3 proposals you think will benefit institutional investors: 1. Banning payment for order flow. Basically all of r/wallstreetbets agrees with this, too. 2. Anti "gamification" of stock trading. I've commented on this a million times, but the fact that Robinhood graphs have no labels on their y-axis means those graphs are totally meaningless and only there to act like slot machine lights. If retail traders have the same trading options as before, but with real actual information instead of whizbang blinking lights, I don't see how this is a negative. 3. Competition issues because of dominant market makers. That proposal is 100% a benefit to small retail traders at the expense of huge market makers, which goes directly against your thesis.

adrr 4y ago
Banning pay for flow is negative to retail investors. Once they get rid of that, it will be the end of Robinhood and the other brokerage firms will return to pay to trade model. Also you get price improvements when trading with the market makers compared to the exchanges. Market Makers want retail trades because they have less exposure to hedge funds that maybe operating with more information on the directionality of the stock than the market makers. Market makers just want to scrape pennies on the bid ask spread.

rvz 4y ago

> I never thought that those “superstonks” folks would be proven right that the system is rigged, but there it is in plain text. It always has been and it is made for the institutions to rarely lose and be ahead with the smart money over retail traders.

WJW 4y ago
"The institutions" typically employ hundreds to thousands of highly talented professionals who get access to sophisticated training and bespoke software tooling. Retail traders often have a day job besides investing, which necessarily limits the time they can spend studying the markets. Tbh this is like putting up the neighborhood poker players against WSOP champions. They might win in the short term but only through luck. Any retail trader getting into any but the most risk-averse type of index investing (ie the type of trade where they are aligned with the wider market anyway) is kidding themselves they can beat people who have at least a 100x advantage compared to them.
astrange 4y ago
If I was a retail trader I would simply not buy high PE stocks expecting to make a profit in the next year. It’s not hard to beat them though - just don’t trade. Hold for 30 years in your 401k and you’re good.