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

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

#801

Post by jariel »

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…

"Can someone help me understand Robinhood's POV? This just seems so outrageous"

You are a mall owner and 25 000 people are stampeding through your mall causing a ruckus which will in the end create no value for anyone.

This is speculative mania with no basis in any kind of market reality, people are actively acting against the best interests of the participants, especially the companies themselves.

The lack of understanding here is what is 'shocking'.

BlackBerry, Robin Hood, Citadel, NASDAQ - nobody wants to be part of this.

It's ridiculous that people think they are somehow 'doing good' or even have some kind of inalienable right to own shares in a company on whatever terms.

This is a 'market riot' nobody wants to be involved but the rioters.

CFOs are all very nervous right now and I wouldn't doubt if some of the target companies have asked for protection.

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

#802

Post by sitzkrieg »

beachwood23 wrote: post #673
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…

I don't think this was Robinhood's choice. Robinhood doesn't actually execute any trades. They sell user's trade orders to Citadel, a trade executor. Citadel then buys the shares on the market, and sells them to Robinhood for a slight markup. It's how Robinhood offers trades for $0 fees. You pay pennies more per share, but don't have to spend $5 per trade. Citadel, and other trade executors, are refusing to buy share…

in futures, your refusing to execute an order for risk management is not illegal. as well as slamming you out of stupid positions. i can only hope equities execution houses are as coherent

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

#803

Post by cameldrv »

centimeter wrote: post #781
beachwood23 wrote: post #673

Earlier quoted context omitted.

I don't think this was Robinhood's choice. Robinhood doesn't actually execute any trades. They sell user's trade orders to Citadel, a trade executor. Citadel then buys the shares on the market, and sells them to Robinhood for a slight markup. It's how Robinhood offers trades for $0 fees. You pay pennies more per share, but don't have to spend $5 per trade. Citadel, and other trade executors, are refusing to buy share…

> You pay pennies more per share To clarify: you will never pay more than market price (i.e. you will never have to pay more than the best order sitting on the book). Citadel or whoever will only internalize your order if they're willing to offer you a better price than market price. Otherwise RH is obligated to match your order with the best price currently available. They are willing to do this because they would p…

This is theoretically true, but there have been numerous SEC enforcement actions based on this not happening.

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

#804

Post by deeeeplearning »

JumpCrisscross wrote: post #725
beachwood23 wrote: post #673

Earlier quoted context omitted.

I don't think this was Robinhood's choice. Robinhood doesn't actually execute any trades. They sell user's trade orders to Citadel, a trade executor. Citadel then buys the shares on the market, and sells them to Robinhood for a slight markup. It's how Robinhood offers trades for $0 fees. You pay pennies more per share, but don't have to spend $5 per trade. Citadel, and other trade executors, are refusing to buy share…

> Citadel also bailed out Melvin fund for their short position in GME. So, Citadel has an interest in not letting the price go up any further. Citadel bailed out Melvin Capital. Not its position. Melvin doesn't have a short position anymore. Melvin made a stupid bet. Citadel bailed them out. Private sector bailouts aren't free: Citadel got its pound of flesh. Even if they bought the entire portfolio, that portfolio n…

>Melvin doesn't have a short position anymore.

That's not at all verified. Short interest is still well over 100% of float. The only thing you are going off is a poorly sourced CNBC report with wishy washy language from Plotkin.

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

#805

Post by simias »

beagle3 wrote: post #678
simias wrote: post #575

Earlier quoted context omitted.

While what you say is plausible, can't it also simply be that they saw a gigantic portion of their userbase making these incredibly risky bets and they were worried that it'd end up blowing in their face?

A broker is nit your friend who refuses to buy junk food for you because he suspects you’ll be sick. A broker is yiur fiduciary/agent; their discretion at refusing your order should be limited to well defined circumstances, and I would be surprised if this is one of them. (I would not be surprised if the EULA lets them do what they want, but I would be surprised if it would actually be found legal in court —- though…

It's not what I was trying to say, of course they're not your friend, I'm not that naive. But on the other hand if many of their users go bankrupt because of poor trades that could backfire against Robinhood themselves, directly or indirectly (for instance by motivating new regulations).

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

#806

Post by kchr »

rcxdude wrote: post #447
Lasher wrote: post #279

Mods on WSB are catching a lot of flack for closing a thread asking for alternative brokers (no idea why) and for commenting in another sticky not to go and write bad reviews for the brokers limiting trades. I fear they are about to get a harsh lesson in what happens when the mob you are leading turns against you.

I get the impression the mods on WSB aren't really leading the whole thing, just trying to moderate a particularly hard to moderate community.

Same here. They are probably just trying to stay neutral and not steer a mob towards specific brokers.

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

#808

Post by azemetre »

snarf21 wrote: post #347
vincentmarle wrote: post #99

Earlier quoted context omitted.

> They could face lawsuits from investors in Melvin and other hedge funds Wait until Robinhood sees the class action lawsuit

Class action lawsuits never tend to work out that well for the little guy. Lawyers get rich and the Goliath pays essentially a fine.

Class action lawsuits are about people punishing companies because the government won't levy a harsh enough penalty. I never took part in a class action because I wanted "a payday," I take part in them because I want the company punished.

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

#809

Post by gmm1990 »

nickysielicki wrote: post #636
gmm1990 wrote: post #594

Earlier quoted context omitted.

I'm pretty happy they are doing it. This is really in the best interest of the average Robinhood user trying to buy GME right now. Maybe they shouldn't completely ban it, but there should be at least very extreme warnings about why its a terrible idea to buy.

Dude it's my fuckin' money. I don't need or want protection. Maybe I want to buy a couple hundred dollars of meme stonks solely because it's funny. Is that not allowed?

It’s their fucking trading platform if they want to defend people from investing in a Ponzi scheme is that not allowed.

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

#810

Post by Red_Leaves_Flyy »

beachwood23 wrote: post #673
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…

I don't think this was Robinhood's choice. Robinhood doesn't actually execute any trades. They sell user's trade orders to Citadel, a trade executor. Citadel then buys the shares on the market, and sells them to Robinhood for a slight markup. It's how Robinhood offers trades for $0 fees. You pay pennies more per share, but don't have to spend $5 per trade. Citadel, and other trade executors, are refusing to buy share…

The loss is provably infinite, the fine should be too.
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