Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop • Hacker News Board

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#51

Post by janmo » Thu, Jan 28, 2021, 1:57 PM UTC

wyldfire wrote: post #26

Can someone help me understand Robinhood's POV? This just seems so outrageous that there must be some sane rationale that I'm not seeing. Why do Robinhood, Reddit, Discord, etc feel like they have to respond to this? Whether the investments being made are responsible or not, it doesn't seem like it should be their place to intervene. If the hedge funds over-shorted GME and WSB recognized that and traded against that…

It is likely that they have lend out the $GME shares to a hedge fund that went short, if this hedge fund goes bankrupt and the stock price continues to rise they will be in serious trouble.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#52

Post by metalliqaz » Thu, Jan 28, 2021, 1:57 PM UTC

wyldfire wrote: post #26

Can someone help me understand Robinhood's POV? This just seems so outrageous that there must be some sane rationale that I'm not seeing. Why do Robinhood, Reddit, Discord, etc feel like they have to respond to this? Whether the investments being made are responsible or not, it doesn't seem like it should be their place to intervene. If the hedge funds over-shorted GME and WSB recognized that and traded against that…

Robinhood allows free trades. With all the new customers loging in and just buying a few stocks, they have to acquire lots of new shares. When this is all over, a lot of retail investors are going to be left holding the bag, and will likely not be continuing customers.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#53

Post by Schweigi » Thu, Jan 28, 2021, 1:57 PM UTC

rvnx wrote: post #7

Interactive Brokers now blocking purchase call and put options (even to institutional investors!) on $GME, you can only close a position. On the other side, Robinhood is asking for account to be funded with cash to execute the calls at expiration, or else they will liquidate your position :|

I just tested it with IBKR and was able to create a call buy order (exp 1/29, $500 strike) for a single contract.

Info: Market was closed so the order wasn’t executed but it was accepted by the order system before i cancelled it.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#54

Post by noncoml » Thu, Jan 28, 2021, 1:58 PM UTC

sokoloff wrote: post #13

bradleyjg wrote: post #3

If they were just blocking margin trading or trades with unlimited risk that would be one thing. But this smacks of either paternalism or trying to manipulate the market. I hope they lose a lot of customers (or product depending on your POV).

It's absolutely paternalism, IMO. I'm less sure whether I think it's a good thing or not (because I think people buying new positions in GME at this point are unlikely to end up happy about that in mid-Feb.) I'm all for "let 'em play" in general but this is not going to end well for a lot of folks...

Why are you so quick to assume that people don’t know what they are doing?

Is it so hard to believe that at this point buying GME is more about activism than making profit?

“When you ain't got nothing, you got nothing to lose”

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#55

Post by dd36 » Thu, Jan 28, 2021, 1:59 PM UTC

speeder wrote: post #9

This sort of stuff will put people more and more on edge, there is the deplatforming going on, people asserted their power financially, and now getting that removed too, the powers that rule USA don't realize that soon the only tool left to common people is violence? Even more with some irresponsible newspapers blaming the whole thing on GamerGate and Alt-Right, effectively pushing away people that previously could b…

Pump and dump isn’t legal.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#56

Post by alex_c » Thu, Jan 28, 2021, 1:59 PM UTC

Big if true (have to take everything with a grain of salt nowadays).

Can anyone with more knowledge than me comment on what Robinhood's exposure is in all this? My understanding is they do not have any direct financial exposure, only reputational risk (and of course downsides from their users potentially losing a lot of money, but that should be part of the game). Is that correct?

And does blocking specific trades today open them up to future liability?

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#57

Post by zarkov99 » Thu, Jan 28, 2021, 1:59 PM UTC

Sure. Robinhood got a call from someone very powerful in their circle, politely asking them to stop the amateur plebes from interfering with their professional market manipulation. We are taking about people commanding titanic amounts of capital and (indirect) regulatory power. Robinhood then had the choice, do we make enemies out of these people or do we just screw, er, I mean protect, our customers? Unburdened by a moral compass or fear of retribution, the RH leadership made the obvious choice.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#58

Post by kasey_junk » Thu, Jan 28, 2021, 1:59 PM UTC

I don’t have a data feed available to verify but it’s at least possible there is no one on the other side of the order book for these symbols so Robinhood can’t execute any more buy orders.

Judging this as a policy decision from a 1 sentence tweet and some screen shots seems premature.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#59

Post by AnHonestComment » Thu, Jan 28, 2021, 2:00 PM UTC

TheHypnotist wrote: post #43

wyldfire wrote: post #26

Can someone help me understand Robinhood's POV? This just seems so outrageous that there must be some sane rationale that I'm not seeing. Why do Robinhood, Reddit, Discord, etc feel like they have to respond to this? Whether the investments being made are responsible or not, it doesn't seem like it should be their place to intervene. If the hedge funds over-shorted GME and WSB recognized that and traded against that…

This is just a guess, but I imagine the hedge funds that own shares of these platforms are pulling some strings. That's a bit conspiratorial, but is it really that unbelievable?

It’s not unbelievable, but it does sound like a breach of fiduciary duties to side with investors against your clients.

Is what RH doing legal for a brokerage?

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#60

Post by lordnacho » Thu, Jan 28, 2021, 2:00 PM UTC

This will just incense the WSB crowd more, surely? The cat is out of the bag, people can organize a group purchase of stock if they feel like it. On one platform or another.