How is banning people from buying stock with the express purpose of prevent the price of that stock from going up in any way, shape, or form legal?
Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
811–820 of 1001 posts
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#812I am the only one who finds this understandable? Sure short selling sounds weird and dodgy. But how is this different from shilling penny stocks in year 2000? People on Internet forums find stocks that are easy to move for whatever reason; generate hype and price hike and then watch gullable speculators pile in while the core group of manipulators exit their positions.
It's a short squeeze, not a pump and dump, as you describe.
In a short squeeze, the hedge funds that hold the shorts will be the ones who lose money. Although, to be fair, some gullable speculators probably will too, but the point is to make money off the hedge funds' poor trade.
The SEC can step in for pump and dump schemes, no reason for Robinhood to have taken the initiative (AFAIK).
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#813Earlier quoted context omitted.
Were the market shutdowns manual or automatic handbrakes? I know there are breaks when specific thresholds are hit that are pre-determined.
There are different layers here. Baked into the exchanges (NYSE, Nasdaq) are circuit breakers which halt all trading on certain volatility conditions. The intent is to stabilize prices. This is not what happened here. What happened here is a broker (Robinhood) decided to not accept certain kinds of orders. It wasn't a market shutdown, it was a specific manipulation to stop the purchase but _not_ the sale of an instru…
I was referring to what happened yesterday by NYSE, not what Robinhood did today.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#814Do they limit only on margin buys or even cash buys? Because with TD Ameritrade, they only limit with margin buys.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#815Can 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…
There are a couple of charitable explanations for Robinhood acting this way.
One is that most Robinhood users probably under-estimate how quickly they can sell if the price turns around quickly. There might not be enough willing buyers for all of the Robhinhood users who might be looking to get out at the same time.
Another thing is that I'm not a lawyer, but they could be worried that if the SCC finds the discussions on Reddit constitute a conspiracy to manipulate the market, and it's primarily being executed through their platform, and they're aware of the conspiracy and take no action...
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#816Earlier 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…
I wonder... couldn't people do this over and over again?
how long can citadel and/or other entities hold?
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#817Can 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…
The way to make money in a bubble like this is to sell right before the pop. At some point the word will go out that it’s over—“we won”—and everyone will rush to sell their GME and take profits. It’s not possible for all those people to succeed. Broker apps like Robinhood will be absolutely overwhelmed with sell orders, many of which will run into technical problems and/or no counter parties. A lot of people are goin…
>When the crisis hit, the firms got the blame, not their customers. Companies learned that helping their customers shoot themselves in the foot can come back to bite them, even if it was all legal and what customers wanted at the time.
Maybe it wasn't intended, but this comes across as particularly harsh victim-blaming.
Yes, the firms got some blame (and a bailout), the customers lost their homes.
Edit: I now see the retraction/clarification you just posted to another commenter. Cheers.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#8181. RobinHood get their money from Citadel.
2. The price was not driven by the little people but by Citadel following the trend.
3. Now Citadel want to realize some gains an instructed RobinHood that th silliness needs to stop.
4. Citadel go on the other side of the trade and sell short, as there are no more buyers.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#819During today's short ladder immediately after Robinhood removed the ability to buy shares...
• There was 443k shares sold in a single batch at $120 at 11:24:36 AM EST. • There was 347k shares sold in a single batch at $140 at 11:19:09 AM EST.
Someone took a total loss of $300M from the price an hour prior OR that is a $100M short sale.
Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop
#820Can 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…
The way to make money in a bubble like this is to sell right before the pop. At some point the word will go out that it’s over—“we won”—and everyone will rush to sell their GME and take profits. It’s not possible for all those people to succeed. Broker apps like Robinhood will be absolutely overwhelmed with sell orders, many of which will run into technical problems and/or no counter parties. A lot of people are goin…
>People buying in late will have the most to lose and maybe the least understanding of what is going on. I mean, this story was a “breaking news” red banner on WashingtonPost.com yesterday. Not everyone buying GME today understands the social movement /r/wsb angle.
Actually that is impossible. This is a short squeeze. If you forget to sell your share then the short sellers are fucked because they still have to buy yours.