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

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

#161

Post by llampx »

jsjsbdkj wrote: post #39
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.

WSB has basically recreated a "boiler room", which is an ages old scam where a small group of insiders would encourage people to buy stock, drive them value up, and then the insiders dump the stock. The key insight here is that for every person selling the stock and making millions, somoene has to be buying. There's a narrative about short squeezes forcing a small number of hedge funds to buy stock, but in practice m…

This is categorically false.

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

#162

Post by dcolkitt »

function_seven wrote: post #92
dcolkitt wrote: post #79

Earlier quoted context omitted.

Robinhood is a free service. The customers don’t pay anything. If the order internalizers decide to stop paying them for their order flow, then they have to route to the exchanges. which charge fees. Trading is still ongoing at the exchanges. It’s just the free platforms, where it’s shut down. If someone wanted guaranteed access to the exchange, then they shouldn’t have used a free broker. Are you saying that Robinho…

Yes. They should be forced to provide the service they promised. It’s not my fault their business model is failing for a particular ticker on a particular day. If they can’t, then some advance notice is needed. Making this decision instantly without giving customers time to move their holdings elsewhere is not okay. That being said, I’m surprised people are still using them for day trading. They don’t have a great tr…

> They should be forced to provide the service they promised

Read the TOS. This was never promised.

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

#163

Post by dreamcompiler »

The endgame here is fascinating to me.

The people who got in early will suffer least when GSE finally crashes and burns. But the poor suckers who bought it at $150 are going to be in big trouble. They're all trying to stay strong and hold long because that's the way to make the hedge funds suffer, but the smarter ones will figure out that their only chance to not lose their shirts is to be in the earliest 5% of scabs to get out, and then it's going to be a bloodbath when everybody gets trampled running for the exit door.

Meanwhile a couple of hedge funds go under while the rest just call it Tuesday.

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

#164

Post by minikites »

bidirectional wrote: post #122
minikites wrote: post #104

Earlier quoted context omitted.

>the market has rightfully taught them a lesson Has it? What leads you to believe that THIS is the time investment firms will stop being reckless?

Where did I say that? They've been taught a lesson via losing a lot of money, and now they know will be a lot of eyeballs on any future trades of a similar nature.

How is that a lesson? What consequences have they endured that will affect their future behavior? "Eyeballs" is not a lesson.

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

#165

Post by ignoramous »

TheAlchemist wrote: post #103
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.…

Exactly. Just take a look at the shareholders and count how many shares those institutional have: https://money.cnn.com/quote/shareholders/shareholders.html?s... It's Wall Street vs Wall Street - redditors were just the catalyst, and will be left holding the bag.

What's surprising is all the concern for redditors here and elsewhere; whilst the overwhelming vibe from r/wsb is this meme resulting in squeeze is strictly personal and not at all business for most that are holding on.

The rest (presumably greedy) are either making money or losing money because they're either riding up with the market or down. That's a feature of the zero-sum game that the financial system has been reduced to both the benefit and the detriment of the greed that's on all sides of the table.

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

#166

Post by llampx »

tartoran wrote: post #150
ignoramous wrote: post #120

Earlier quoted context omitted.

> What WSB crowd is doing is market manipulation. Shorting GME more than number stocks exist is not market manipulation? HFT isn't? Bailing out greed isn't? Why is this notion of market manipulation such a narrow one-way street?

And they stop the manipulation by more manipulation? Why isn’t the trade blocked entirely for those stocks? Having the ability to sell seems like an inviting open door towards a specific outcome. I closed my RH account today

Exactly. Good on you. I am with Tastyworks and IB, but IB seems to be playing shenanigans with GME today as well.

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

#167

Post by dagw »

bjourne wrote: post #35

So you're telling me that by buying GameStop stock, I can help screw over hedge fund managers? I have not bought a single stock in my whole life, but I'm in. How do I start?

I can help screw over hedge fund managers?

As long as you are cool with your actions making a bunch of different hedge fund mangers richer at the same time.

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

#168

Post by duxup »

llampx wrote: post #134
ghaff wrote: post #58

Earlier quoted context omitted.

So they're going to show Wall Street who's boss by gambling away their grocery money? (Some will make out but I suspect the vast majority will lose big--money at least some can't really afford to lose.) I have trouble conjuring up a lot of sympathy but that's almost certainly uncharitable as I'm sure there will be stories of serious individual loss.

Very paternalistic to assume that people are gambling away their grocery money and should be stopped now that the short squeeze has become much, much more likely. Meanwhile ANY other security also has the chance to go to 0, but RH doesn't stop you from buying.

I don't think he's arguing FOR stopping the trades. I think he's worried about the folks participating financial well being.

We worry about that (people's retirement savings and so on) anytime we see market corrections, a given company go under, and etc... it's not an unusual concern.

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

#169

Post by swiley »

aynyc wrote: post #158
swiley wrote: post #73

Earlier quoted context omitted.

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.

This really wouldn't be the first time Robinhood changed their software to prevent it's users from doing exceptionally stupid things with margin.

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

#170

Post by dahdum »

nabla9 wrote: post #63
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.

If you buy stock with the purpose of pushing the price up so that other people will buy it, that’s market manipulation. What WSB crowd is doing is market manipulation. That's illegal. WSB is doing everything openly and even celebrating it. Getting mad when openly breaking the law is not rational response. https://www.law.cornell.edu/uscode/text/15/78i Brokers like Robinhood are reacting because they want too keep SEC…

That seems to be the minority view among pundits and analysts, and disregards the large amount of funds jumping into the fray to squeeze the shorts.

Trading against shorts instead of fundamentals isn't market manipulation.

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