WallStreetBets vs WallStreet: It's not about the money anymore • Hacker News Board

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#151

Post by valvar » Thu, Jan 28, 2021, 3:18 PM UTC

EForEndeavour wrote: post #53

tenaciousDaniel wrote: post #8

As someone who is not very educated in finance, I'm curious how to interpret today's events. Is nasdaq/robinhood/everyone else transparently manipulating the market on behalf of hedge funds? Or are these standard mechanisms in place for preventing the stock market from swinging wildly out of control? I don't know if it's standard to completely block trading on one or more stocks.

I'm also quite ignorant of investing and also contract law, but technically, Robinhood's recent disabling of buying new options or shares [1] falls under their terms of service [2]: You agree that, without notice, _Robinhood may terminate these Terms and Conditions, or suspend your access to the Service or the Content, with or without cause at any time and effective immediately._ [...] Robinhood shall not be liable t…

I am not a lawyer, but I assume that they would not get in trouble for contract breach but rather for market manipulation.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#152

Post by dalbasal » Thu, Jan 28, 2021, 3:18 PM UTC

bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

>> this insistence on viewing 'Wall Street' as a monolithic entity.

That's not a fair statement. "Wall Street" isn't viewed as a monolithic entity. It's viewed as an entity, or industry. In fairness, Wall Street is even more insular than other industries that we happily refer to as a group: Petrogas, real estate developers, silicon valley, etc.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#153

Post by Ozzie_osman » Thu, Jan 28, 2021, 3:18 PM UTC

Here's a question. How much of the investors in funds like Melvin are actually wealthy family offices and high-net worth folk, and how much are pension funds, endowments, etc?

Because if it's the latter, then the losers here aren't billionaires and Wall Street.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#154

Post by lifeslogit » Thu, Jan 28, 2021, 3:18 PM UTC

dcolkitt wrote: post #51

bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

> high frequency traders are probably making a bundle. I've heard from a former colleague at a major HFT firm, that they hit their entire revenue target for the year, just in the past week.

That is very interesting to hear! I imagined that this was the perfect storm for HFT. Lots of retail investors using default exchange routing settings via brokers like Robinhood and ETrade that sell their order flow. Meanwhile these retail investors are buying small amounts of very volatile equities! Lots of opportunity to rack up lots of pennies.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#155

Post by boringg » Thu, Jan 28, 2021, 3:18 PM UTC

bluecalm wrote: post #111

koolba wrote: post #78

Earlier quoted context omitted.

All those institutions are interconnected. A large hit to one player can cascade to the wider market as they're forced to sell off other positions to put up additional capital. That could cause additional sell-offs for more leveraged players. And so on... The phrase " too big to fail " exists for a reason and it's smaller than you think.

Forcing big leveraged players to sell is fantastic for everyone else. There will be a lot of cheap stocks to pick up for everyone else.

Assuming that you are in cash or another asset class that isn't being sold off.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#156

Post by snowwrestler » Thu, Jan 28, 2021, 3:18 PM UTC

bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

Right now it looks like retail investors stuck it to Wall Street and made some money because GME is still over $400/share this morning. Everyone holding GME can look at their app and feel great.

But not everyone is going to be able to sell it at $400... or even $100 in some cases. It will be interesting to see how everyone feels after the sell off.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#157

Post by doytch » Thu, Jan 28, 2021, 3:18 PM UTC

kasey_junk wrote: post #116

fireeyed wrote: post #76

Earlier quoted context omitted.

Don't you think the honchos at Robinhood got the call from the man last night ? Its a coordinated ban of serfs from buying up AMC GME BB. Its got too hot for them.

No I don’t. I think the market makers/internalizers who are normally on the other side of retail trades want no part of the irrationality around these symbols so they pulled their orders. There is no one on the other side of the book so Robinhood can’t execute. It’s standard market dynamics that anyone whose traded before understands. That a bunch of new retail traders are about to learn an expensive lesson on execut…

The market makers are making _bank_ right now off of the premiums. They're the last people to request a halt.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#158

Post by aynyc » Thu, Jan 28, 2021, 3:18 PM UTC

swiley wrote: post #73

itake wrote: post #36

Earlier quoted context omitted.

I didn't see a failure on Schwab until I hit "confirm" yesterday. My understanding is TD Ameritrade is only blocking the purchase of stock on margin. If you have the cash, you're allowed to make the purchase.

Oh well that's reasonable. If I were a brokerage you bet your ass I wouldn't lend you money to buy GME.

Why should broker allow margin trading at all? If it's about risk, then who's the decider/calculator of the risk? I think this is the reason why there is a distrust from the next generation.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#159

Post by duxup » Thu, Jan 28, 2021, 3:18 PM UTC

dx87 wrote: post #128

duxup wrote: post #93

Earlier quoted context omitted.

Are we talking about cutting your own nose off to spite someone else's face?

Is that any different to taking a day off work to go to a protest? Both situations have you losing money in order to bring issues to light. Same with union workers going on strike.

Except if I were to protest it is focused on that one employer / hits them.

Meanwhile this financial system is hardly just a monolithic monster and plenty of big institutions will make money too.

I think the populist ideas / results around this are all weirdly misguided.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#160

Post by blake1 » Thu, Jan 28, 2021, 3:19 PM UTC

I think it is about the money. It will definitely be about the debts, which were unwittingly taken on by everyone who bought on margin at these levels. The price will collapse.

The other bad assumption in this article is thinking the hedge funds are on one side of this. Some hedge funds made fortunes in the short squeeze.