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

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

#321

Post by thebean11 » Thu, Jan 28, 2021, 3:39 PM UTC

duxup wrote: post #216

function_seven wrote: post #92

Earlier quoted context omitted.

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…

> It’s not my fault their business model is failing "You" (well not you but you get what i'm saying) picked the service... If folks are capable of investing directly in stocks they should be expected to understand the ramifications of picking a free service like Robinhood. They ESPECIALLY should with all this populist banter going around...

> a free service like Robinhood

And pretty much every other broker on the planet who made trading stocks free?

How is a user, no matter how "capable", supposed to predict this?

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

#322

Post by salmon-salmon » Thu, Jan 28, 2021, 3:39 PM UTC

dcolkitt wrote: post #162

function_seven wrote: post #92

Earlier quoted context omitted.

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.

This is exactly why people don't like Wall Street. It's smart to pay attention to the TOS pragmatically to protect yourself, but the TOS has absolutely no ethical relevance. To people with a well-adjusted ethical compass, a trading platform blocking trades is a violation of their social contract.

You should be aware that if you're citing the TOS in any context other than a court case, most people are going to like you less as a result.

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

#323

Post by erikpukinskis » Thu, Jan 28, 2021, 3:39 PM UTC

duxup wrote: post #93

ryandward wrote: post #68

Earlier quoted context omitted.

Nobody is gambling money away. The sentiment is that they are knowingly _throwing_ it away to send a message.

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

My partner and I were so entertained by reading WSB last night we bought a share at $350.

I don’t particularly care if it goes to $10 tomorrow. I don’t expect to make money here. It’ll be fun to watch for a few days, maybe weeks.

We just felt a lot of solidarity with the sentiment over there, and are happy to make a small contribution to the squeeze.

It feels kind of like contributing to a Kickstarter with low chance of success.

But you know, there’s a nonzero chance it goes to $1000 before the shorts can wiggle out. That’s what makes it exciting.

In general, since watching what they did to Tesla I have no sympathy for shorts.

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

#324

Post by bluecalm » Thu, Jan 28, 2021, 3:39 PM UTC

boringg wrote: post #155

bluecalm wrote: post #111

Earlier quoted context omitted.

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.

No need for that assumption. Equities going down is not a problem for reasonable investors. You just buy more for cheaper prices according to your schedule and wait. You still own the % of your companies. It's not worth less just because you can't temporarily sell it. It would be like saying that price of your house is fluctuating from 0 to 500k depending if there is a potential buyer today or not.

Stock market crash is only a big problem for leveraged over commited entities, very small inconvenience for people beyond accumulation phase (as they may need to sell very small % of assets in coming months) and huge opportunity for everyone else.

Stocks crashing is fantastic for a little guy. It's the same with real estate prices and it's the reason entrenched players do everything to prevent it.

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

#325

Post by Clubber » Thu, Jan 28, 2021, 3:40 PM UTC

pjc50 wrote: post #290

Clubber wrote: post #100

Earlier quoted context omitted.

The only way things will change, I'm convinced, is for everybody to vote out the incumbent every time. Occupy Wall Street didn't work, riots and looting wealthy areas didn't work, raiding the capitol building didn't work. The corruption is dug in. Voting out the incumbent breaks all these decades long (multi-generational?) relationships with the elites. They will probably reform the relationships to a degree the firs…

The lesson from Trump is that blindly going against the incumbent may simply replace them with somebody less competent and more corrupt.

So then we just have to live with a police state and a corrupt government that redistributes wealth up? I mean I don't see an alternative. We're in a really bad place.

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

#326

Post by snowwrestler » Thu, Jan 28, 2021, 3:40 PM UTC

dahdum wrote: post #118

jsjsbdkj wrote: post #39

Earlier quoted context omitted.

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…

In this case people buying stock weren't hoping on a greater fool to sell it to later. By a large margin, more shares were sold short by a handful of hedge funds than even exist. As the price rises the expectation was/is they are forced to buy back to cover at any price . It's entirely possible a majority of retail investors make a killing and a few large funds get liquidated. At least it was until the coordinated ac…

These two thoughts are incompatible:

- “We’re going to put these hedge funds into bankruptcy”

- “These hedge funds will buy all our stocks at inflated prices”

If the hedge funds can buy all the stock, they’re not at risk of going bankrupt.

And if they are at risk of going bankrupt, they can’t buy all the stock at inflated prices.

A lot of retail investors are going to lose money when this bubble pops. /r/wsb has not invented a new way for everyone to get free money.

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

#327

Post by dathinab » Thu, Jan 28, 2021, 3:40 PM UTC

fairity wrote: post #183

I'm really confused why the general public is enraged at the brokerages' decision to stop new buy orders for GME. It's very clear that retail is going to lose their shirts in the end of all of this. By blocking new buy orders, the brokerage is effectively protecting its naive clientele. This isn't some government conspiracy. This is a firm trying its best to operate in the best interest of its clients.

I think the large majority of the cliente is fully aware that they will lose out on this long term.

So it's not about protecting the client.

If it would be about protecting your clients it would be like your care (=a utility) not allowing you to drive into the mountains for a hike (=user action) because the weather is bad (=makes action risky).

I think no one would say that this is ok or acceptable, but if the utility is a broker and the action is buying stock on a high risk it is ok?

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

#328

Post by UncleMeat » Thu, Jan 28, 2021, 3:40 PM UTC

joss82 wrote: post #40

jonplackett wrote: post #6

I’m seeing so much news about this but don’t understand what’s happening. Can someone do a recap?

It's quite simple really: 1. Big hedge fund bet against GameStop stock (shorted up to 140% of the stock, it's called naked short and everybody thought it was illegal since 2008 but that's another story) 2. Lot of small-to-medium investors coordinated over Reddit to take the opposite "bet" en masse (basically buying a lot of GameStop shares) so that the price will go up and "big hedge fund" lose a lot of money. => The…

This isn't a naked short.

A naked short is when you short a stock without first borrowing it. It is not the same thing as having shorts past 100% of outstanding shares, since a single share can be lent multiple times.

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

#329

Post by mediaman » Thu, Jan 28, 2021, 3:40 PM UTC

philip1209 wrote: post #246

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.…

A lens to look at this through is - "why is short selling allowed?" Advocates cite increased "liquidity." But, does society really benefit? Short-selling really just lets trading firms extract value from the failure of others. In that sense - professional trading firms that participate in short-selling could be grouped into a monolithic "Wall Street" in the sense that they are extracting value without a benefit for s…

Most advocates argue that short-sellers help find the accurate price of a security, in service of the broader market goal of capital allocation. People who argue that markets should be long-only wind up advocating for frauds and failures to be mispriced in the market.

Liquidity is not usually the primary benefit. That’s usually the argument for high frequency trading firms.

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

#330

Post by dragonwriter » Thu, Jan 28, 2021, 3:41 PM UTC

function_seven wrote: post #291

risyachka wrote: post #222

Earlier quoted context omitted.

It's not just RH. I am paying for Interactive Brokers, they also stopped buy transactions.

Oh wow. I've always thought IB to be the most "bare metal" trading platform available to regular people. If they're denying buy orders, then where does a plebe go to get direct access to the market?

> where does a plebe go to get direct access to the market?

If you have direct access to the market, you go directly to the market (i.e., have a seat on the exchange.) Also, you very much aren't a plebe in that case.