Discord bans r/WallStreetBets server, subreddit went private for a while • Hacker News Board

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#911

Post by that_guy_iain » Thu, Jan 28, 2021, 1:28 PM UTC

Yizahi wrote: post #909

jug wrote: post #777

It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingly easy to cause an absolute catastrophy in the order of billion losses for them. I heard Melvin Capital may even have gone bankrupt? And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. Seriously. It's that eas…

Why do you separate users of /r/wsb from traders and hedge funds, as if those are different people? My guess is that majority of users there are traders and employees of such funds, simply using yet another talking space.

> Why do you separate users of /r/wsb from traders and hedge funds, as if those are different people? My guess is that majority of users there are traders and employees of such funds, simply using yet another talking space.

Because the subreddit is famous for just losing money and lots of people just not knowing what they're doing. I'm sure there are a few traders on that reddit but I suspect it's like a professional programmer joining a dev bootcamp community. A whole bunch of people who are just learning and are doing crazy things. (I did crazy things when I was learning, hell, I sometimes do crazy things now)

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#912

Post by Person5478 » Thu, Jan 28, 2021, 1:28 PM UTC

mywacaday wrote: post #794

Jonnax wrote: post #741

Earlier quoted context omitted.

Where does discord say it's for free discussion? In two clicks I found their community guidelines on their website: https://discord.com/guidelines Second rule: "Do not organize, promote, or coordinate servers around hate speech. It’s unacceptable to attack a person or a community based on attributes such as their race, ethnicity, national origin, sex, gender, sexual orientation, religious affiliation, or disabilities…

I saw a comment on WSB that said they have bots that remove all swear words etc but some people use unicode etc to write the words anyway. I don't know if its true but where is the line for a ban if a genuine effort is being made to moderate?

The worst part about this observation is that this is the very reason being given for why twitter isn't getting kicked off of AWS. Because they're putting in a good faith effort to moderate, it's just "hard".

This is just about power and money, the chances that many of these HNers aren't losing money due to the actions of /wsb is low. I have no doubt many of the posters trying to defend the move are being a bit disingenuous. Not all for sure, but certainly some of them.

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#913

Post by SuoDuanDao » Thu, Jan 28, 2021, 1:28 PM UTC

Yizahi wrote: post #909

jug wrote: post #777

It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingly easy to cause an absolute catastrophy in the order of billion losses for them. I heard Melvin Capital may even have gone bankrupt? And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. Seriously. It's that eas…

Why do you separate users of /r/wsb from traders and hedge funds, as if those are different people? My guess is that majority of users there are traders and employees of such funds, simply using yet another talking space.

WSB is an open space[1], accessible to ordinary retail investors. The majority of the money may be from large funds, but the majority of discussion is from working schmos who day trade as a hobby. That's very different from the closed environment we associate with high finance.

[1]theoretically, in practise I'll predict it's about to be Septembered into oblivion

edit: formatting

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#914

Post by bcruddy » Thu, Jan 28, 2021, 1:29 PM UTC

bko wrote: post #869

WanderPanda wrote: post #862

Earlier quoted context omitted.

Why is the solution always to either shut something down or to regulate? Why is educating people to act more responsibly never ever considered an option?

I'm not arguing that shutting down or regulating is the best solution, but it is the most likely outcome. How would one go about educating people? There's been a lot of ink spilled on this story and it seems to have captured the public's imagination. Not all of the reporting is accurate, but all the major media outlets get out the point that this is essentially reckless market manipulation by a group of loosely bande…

How is borrowing then selling 140% of the available shares legal? How is that not market manipulation?

This is the market at work. This was taken too far and the market has a method for correcting this behavior and we're seeing it now. The difference is retail is going to win AND there's no backroom deal to be made to stop the bleeding.

We NEED financial reform but we need to look at what allowed this situation in the first place, not ways to silence what are effectively the whistle blowers.

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#915

Post by davewritescode » Thu, Jan 28, 2021, 1:31 PM UTC

jariel wrote: post #826

jug wrote: post #777

It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingly easy to cause an absolute catastrophy in the order of billion losses for them. I heard Melvin Capital may even have gone bankrupt? And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. Seriously. It's that eas…

I'm sorry but this is a possibly irresponsible take for at least a few reasons. The populism on this issue is completely out of touch with reality. 1) As the stock pops due to irrational upwards pressure - the hedges funds might lose a bit, but in reality a lot of 'regular people' will be left holding the bag. When the stock inevitably crashes, those 'regular people' will lose a lot and it will probably be a more mea…

What about all the people who lost jobs at GameStop when the board got pissed the stock was in the toilet? You have a case of a hedge fund that was playing games to manipulate the price of a stock downward for a quick 400% profit the last few years with what appears to be no hedge on the other side of the bet. They could've bough calls to offset potential losses but they didn't because that wouldn't have meant such impressive gains.

People who should've known better got caught with their pants down and I have absolutely no sympathy for hedge funds.

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#916

Post by baybal2 » Thu, Jan 28, 2021, 1:31 PM UTC

bko wrote: post #832

jug wrote: post #777

It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingly easy to cause an absolute catastrophy in the order of billion losses for them. I heard Melvin Capital may even have gone bankrupt? And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. Seriously. It's that eas…

> And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. A lot of the people involved aren't just buying and holding. They're specifically buying/selling short dated out of the money options in order to move the price. Some understand the market microstructure and the various levers they have to make the price move using what is effectively leverage. > Seriously. It's t…

> Ideally finance is meant to be about allocation of capital. If a market is allocating capital to a dying company just because meme, then the market isn't serving its purpose.

Do you believe in it's right to give power to somebody, whether it will be a government, private party, or a class to rule over allocation of capital, and decide whose capital allocation is good, and whose capital allocation is bad?

There is a country that tried, they name to it was USSR.

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#917

Post by spacemanmatt » Thu, Jan 28, 2021, 1:32 PM UTC

comeonseriously wrote: post #876

WanderPanda wrote: post #862

Earlier quoted context omitted.

Why is the solution always to either shut something down or to regulate? Why is educating people to act more responsibly never ever considered an option?

Arguably, because we don't put people into office who are able and/or willing to require people to act responsibly. If we chose our politicians more carefully, we'd see better results. But we don't, so we get what we choose.

For everyone willing to talk about "key leverage points in the social graph" it's weird how they won't call those people leaders.

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#918

Post by fractionalhare » Thu, Jan 28, 2021, 1:32 PM UTC

oneeyedpigeon wrote: post #904

fractionalhare wrote: post #895

Earlier quoted context omitted.

No single fund deliberately pushed short interest over 100%. Short interest increasing over 100% is something that happens organically when many firms want to short the same thing. No collusion required. Someone buys a stock from a short seller and sells it short themselves. I will add that short interest > 100% is a very common risk measure that firms with a short position actively track.

I don't know how to verify this, but I've heard one source claim that firms continued to short once it was already over 100%. Even if that's not strictly collusion, it sounds — to my admittedly untrained ear — like a position that the system should want to avoid.

I think it's reasonable for people to want to limit that. The trouble is that you would need to require brokers to prevent short selling stocks that have been already been borrowed and short sold. Aside from tracking a tree of stock ownership changes at the brokerage level, this would de facto create two similar but different assets for every equity: those which are "clean" (have never been sold short, or the short position is closed) wnd those which are "dirty" (have been sold short at some point and the position is not closed).

This is trickier than it might sound, because you are in some sense restricting the rights and capabilities of some subset of the shares. That has valuation implications.

I am not saying it can't be done or even that it's undesirable; just that the mechanics of this are nontrivial to enforce.

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#919

Post by Person5478 » Thu, Jan 28, 2021, 1:32 PM UTC

Traster wrote: post #730

_v7gu wrote: post #725

Earlier quoted context omitted.

Thousands of such online communities, and you only throw out the ones that threaten your hedge fund?

By your standard every newspaper, every TV channel, every website that refuses to publish my views is censoring me. It's an absurd standard to call censorship. Discord has made no attempt to stop anyone saying anything, they're just chosen not to lend these people their megaphone.

and it just "happened to be" done after the short fiasco. Or is your argument that they weren't using dirty words until after the fiasco started?

That they can is not being argued, that they did it now is the issue.

In the same vein, no one would argue that a male manager shouldn't be able to schedule a female employee on their shifts. But when that male manager asks for a date and is refused, the action takes on an entirely different tone.

Re: Discord bans r/WallStreetBets server, subreddit went private for a while

#920

Post by andrepd » Thu, Jan 28, 2021, 1:33 PM UTC

bko wrote: post #832

jug wrote: post #777

It does feel like a watershed moment regarding hedge funds. This is the first time netizens capitalize on hedge fund short favorites and it has been surprisingly easy to cause an absolute catastrophy in the order of billion losses for them. I heard Melvin Capital may even have gone bankrupt? And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. Seriously. It's that eas…

> And how to do it? You get people to invest in a stock that is expected by the industry to go belly up. A lot of the people involved aren't just buying and holding. They're specifically buying/selling short dated out of the money options in order to move the price. Some understand the market microstructure and the various levers they have to make the price move using what is effectively leverage. > Seriously. It's t…

> Ideally finance is meant to be about allocation of capital

What does it matter what it is "ideally", if it was never that in practice? Ideally communism is a stateless moneyless classless society, let's get working on dissolving the state then?