Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop • Hacker News Board

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

#881

Post by zaltekk » Thu, Jan 28, 2021, 7:27 PM UTC

benji_is_me wrote: post #657

zaltekk wrote: post #561

Unfortunately the account deactivation story is quite poor. Under Settings > Account Information > Deactivate Account you're just sent to a customer service email form. They say it takes 1-3 business days to process. As a side note, you have to close out all of your positions and transfer out all of your money before you're allowed to close the account. This seems unusual to me from experiences with other brokers. Fr…

Robinhood does allow you to transfer holdings directly to another brokerage (for a $75 fee). https://robinhood.com/us/en/support/articles/transfer-stocks...

Ah, good find. There's no mention of this as a closing option in the app itself. That fee is a bit ridiculous, but it might be the best option if you have a real portfolio.

I can't find a history that shows when they added this, but it appears they at least added transfers in a few years ago:

https://www.reddit.com/r/RobinHood/comments/6tre6o/transfer_...

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

#882

Post by dang » Thu, Jan 28, 2021, 7:27 PM UTC

JackTally wrote: post #819

During 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.

(This comment was originally a reply to "Robinhood makes most of its money selling customer orders (2020)" https://news.ycombinator.com/item?id=25946626, but we've merged it into the main thread.)

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

#883

Post by dang » Thu, Jan 28, 2021, 7:28 PM UTC

gricardo99 wrote: post #873

Namely, should a brokerage—especially one like Robinhood that brands itself with an anti-Wall Street Everyman gloss—be selling its customers’ trades? What exactly is the point of this article, other than trying to stir up anti-Robinhood sentiment? Relying on PFOF/external execution is now a bad thing? Is the author advocating to do away with PFOF/external execution? What's the proposed alternative, because it seems l…

(This comment was originally a reply to "Robinhood makes most of its money selling customer orders (2020)" https://news.ycombinator.com/item?id=25946626, but we've merged it into the main thread.)

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

#884

Post by dv_dt » Thu, Jan 28, 2021, 7:30 PM UTC

avs733 wrote: post #563

Aunche wrote: post #555

Earlier quoted context omitted.

This narrative doesn't make any sense. Hedge funds aren't a monolithic entity. Some hedge funds lost billions of dollars on shorts. Redditors made millions of dollars. Where do you think the rest of the money went to? That's right, other, more powerful, hedge funds. BlackRock held 9.2 million shares as of a few weeks ago.

not having a RH account, can you trade there on leverage? I imagine if a huge number of retail traders are ending up leveraged to high hell, RH may have ended up in an uncanny financial position because of this.

I think the biggest thing RH offered that they may have been justified in curtailing is fractional stock buys and buys on margin. But to stop trading on buys outright is very strange.

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

#885

Post by toast0 » Thu, Jan 28, 2021, 7:31 PM UTC

missedthecue wrote: post #872

ryanSrich wrote: post #858

Earlier quoted context omitted.

I see little outrage about this. The outrage is about illegally manipulating the market in broad daylight by preventing retail investors from purchasing a stock. Is a user expected to tolerate illegal activity because the businesses customer demands it of them? If you have any doubt what Robinhood is doing is illegal (setting aside that it's clearly morally reprehensible), then I encourage you to read the suit that w…

"The outrage is about illegally manipulating the market in broad daylight by preventing retail investors from purchasing a stock. " There's a difference between preventing someone from buying a stock and telling them you're not going to assume the risk of making a market for them, which is what's going on here. You cannot force Citadel to make a market for your orders. They happen to result in the same situation, but…

> You cannot force Citadel to make a market for your orders.

That depends on the market maker contract Citadel has with the brokerage(s) and the exchange(s). Although, I don't think the contracts with exchanges are very tight; I don't know about the contracts with brokerages. IIRC, Nasdaq had (has?) a special order type for market makers who didn't want to actually make a market that would put in bid and ask at exactly the maximum contractually allowed spread away from last trade, and withdraw and replace them when any trades did occur; making it much harder to actually trade with the market maker.

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

#886

Post by imtringued » Thu, Jan 28, 2021, 7:32 PM UTC

gmm1990 wrote: post #594

bradleyjg wrote: post #3

If they were just blocking margin trading or trades with unlimited risk that would be one thing. But this smacks of either paternalism or trying to manipulate the market. I hope they lose a lot of customers (or product depending on your POV).

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.

It isn't. People buy it to laugh, not to make money.

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

#887

Post by sokoloff » Thu, Jan 28, 2021, 7:32 PM UTC

015a wrote: post #662

sokoloff wrote: post #13

Earlier quoted context omitted.

It's absolutely paternalism, IMO. I'm less sure whether I think it's a good thing or not (because I think people buying new positions in GME at this point are unlikely to end up happy about that in mid-Feb.) I'm all for "let 'em play" in general but this is not going to end well for a lot of folks...

When Melvin Capital sold a metric ton of naked shorts on GameStop, no one was there to tell them it wouldn't end up well. It was certainly a risk, but not really a bad one going on fundamentals. They just failed to predict the mob mentality of retail investors. Of course, those retail investors who got in on Thursday, Friday, or Monday; that seemed like a bad purchase. So bad that Melvin double-downed on their naked…

If I were running Robinhood, I'd be inclined to continue to allow trading*, but perhaps with a popup message with language that legal approved to suggest that people should be certain of what they were doing when creating new positions in high-vol securities and would have 100% margin requirements on high-vol securities now. So, I agree with you that I'd, on balance, prefer to see trading open in these names. I think people should do what they want with their money, even if I think it's stupid and likely to end badly.

At the same time, parabolic moves like this have never once in the history of markets been sustained over a long period of time. It's possible that this will be the first one ever, but I am indeed making a prediction that it will not be. You are correct that I might be wrong about that.

* - All this assumes that my clearing firm would continue clearing the orders, which is uncertain at the moment. If my clearing firm won't book the orders, I literally can't do anything except cajol, plead, or sue them.

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

#888

Post by lamp_book » Thu, Jan 28, 2021, 7:32 PM UTC

bytematic wrote: post #832

krelian wrote: post #323

Earlier quoted context omitted.

At least for GME the stock is still rising uncontrollably. If the WSB crowd who mainly uses Robinhood can't buy then who is pushing the price up?

People are flooding robinhood competitors

Most or many of RH's competitors have similar restrictions, however. Hints that the ratio of 'big money' going long was on the rise, and/or short sellers closing their positions. Also, foreign money potentially.

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

#889

Post by recursive » Thu, Jan 28, 2021, 7:32 PM UTC

gmm1990 wrote: post #587

throwaway4good wrote: post #569

I 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.

Yeah I don't understand why so many people are defending a ponzi scheme. Its in at least 90% of Robinhood users interest to not be able to buy GME right now.

When are all the noble protectors going to turn their attention to convenience stores and gas stations? They shamelessly sell lottery tickets every single day to unsuspecting bag holders. It's in at least 99% of their interest not to be able to buy those tickets.

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

#890

Post by treis » Thu, Jan 28, 2021, 7:33 PM UTC

chrisco255 wrote: post #848

treis wrote: post #391

Earlier quoted context omitted.

Stock market regulation stems largely from the experience of the Great Depression. So even if 99.99% of people lose all their money in lotteries we haven't seen an economic crisis caused by lotteries. We're not likely to see an economic crisis due to a Gamestop short squeeze, but it is a bit of a worrying sign.

And how much did that regulation help prevent the Great Recession and Global Financial Crisis of 2008?

There's a pretty direct line of causation from the rollback of some regulations and lack of enforcement of others to that. That crisis was a reminder of why we have these sorts of regulations and an example of why we should enforce them.