This is probably legit, unlike delisting it. You are taking a loan from them with the understanding that they can (in some circumstances) liquidate your investment to lower their own risk. This absolutely seems like one of those circumstances.
Robinhood is automatically initiating GME sell orders on users' behalf
101–110 of 316 posts
Re: Robinhood is automatically initiating GME sell orders on users' behalf
#102Earlier quoted context omitted.
Citation?
It's in the logs, go see for yourself? GME purchases blocked this morning on apps where Citadel is the clearing house. SOMEONE proceeds to ladder short sell GME to cause a massive price dump. Users are margin called from previously profitable positions (without being able to provide buying pressure needed to fight against a ladder short sell) Shorts are able to unethically cover your position. Read into this... it's…
Citadel is not a clearing house...
Re: Robinhood is automatically initiating GME sell orders on users' behalf
#103Smelled like scam, is a scam. So glad I didn't fall into the robinhood trap, I was really close to. Edit: yes this comment isn't related to the linked article.
Fidelity and every other brokerage of which I have knowledge would let you do the same thing (get into a bad trade, and then liquidate your position when you exceed margin limits). This isn't a "Robinhood" thing, this is an "ignorant gamblers who shouldn't be allowed anywhere near a margin account" thing.
Re: Robinhood is automatically initiating GME sell orders on users' behalf
#104Earlier quoted context omitted.
That is entirely up to the broker. They make no guarantees to you that they'll underwrite your risk taking with no limits. If you don't want this to happen, go to a reputable broker and make sure you are not trading on margin. This is not rocket science, but does require a basic level of understanding.
I agree that this is the technically correct definition of how margin is typically utilized, and that investors should be prepared for this in the case of high volatility. The fact does remain, though, that the way the data is presenting itself seems to indicate that there was disingenuous behavior on the behalf of market makers and a number of hedge funds. To be seen, I guess.
I mean, assuming manipulative self-interested disingenuous behavior on the part of market makers and hedge funds on a daily basis is usually a safe bet. Also on the part of nearly anyone interacting with the stock market who has the power to do it. It's kind of the whole game. True, that may not be how they teach it to you in high school.
Re: Robinhood is automatically initiating GME sell orders on users' behalf
#105Are these users trading on margin?
100% they're on margin. Otherwise the broker would have no right to make trades on their behalf.
In contrast, once you're on margin you give them the right to liquidate any part of your portfolio, at any time, to cover your margin balance.
What they can't do is liquidate beyond the margin balance. Once they've covered the balance they would have to stop closing out your positions.
Re: Robinhood is automatically initiating GME sell orders on users' behalf
#106It is called a margin call. Nothing specific to Robinhood or to GME.
Re: Robinhood is automatically initiating GME sell orders on users' behalf
#107Yeah, brokerages will do that if the stock takes a big drop like it did today. Oh, did you not read that part of your margin agreement? According to thread, some are just now getting to that part. Those same folks shouldn't have been trading GME on margin. If it's any consolation, I've had Fidelity, IB, et. al., do the exact same thing when a trade turned sour. Difference is, I didn't run to Reddit to display my igno…
Are you sure you didn't just have a margin call up to the margin maintenance rather than get everything on margin liquidated immediately like here?
Re: Robinhood is automatically initiating GME sell orders on users' behalf
#108Yeah, brokerages will do that if the stock takes a big drop like it did today. Oh, did you not read that part of your margin agreement? According to thread, some are just now getting to that part. Those same folks shouldn't have been trading GME on margin. If it's any consolation, I've had Fidelity, IB, et. al., do the exact same thing when a trade turned sour. Difference is, I didn't run to Reddit to display my igno…
The difference here is they prevented people from starting new positions while still allowing closing them .. effectivly being the cause of the drop.
Re: Robinhood is automatically initiating GME sell orders on users' behalf
#109Browing the top of reddit right now is really reminiscent of /r/The_Donald, particularly the shift from a bunch of 'ironic' jokers to conspiracy theories and shouty chest beating and calls for upvotes. I'd treat anything like this with a huge pinch of salt.
Not just Reddit. It's here too. It's wild to see people being whipped into a frenzy in real time. I'm following the discussions a bit, lots of comments by people spreading conspiracy theories, comments asking for evidence are just downvoted, or met by the conspiracy theorist's favorite, "do your research", comments spreading disinformation like "citadel owns robinhood" with a tweet as the only source, people who have…
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Re: Robinhood is automatically initiating GME sell orders on users' behalf
#110Yeah, brokerages will do that if the stock takes a big drop like it did today. Oh, did you not read that part of your margin agreement? According to thread, some are just now getting to that part. Those same folks shouldn't have been trading GME on margin. If it's any consolation, I've had Fidelity, IB, et. al., do the exact same thing when a trade turned sour. Difference is, I didn't run to Reddit to display my igno…
Are you sure you didn't just have a margin call up to the margin maintenance rather than get everything on margin liquidated immediately like here?
You know, you might be right. Last time I had a margin call was a long time ago. Then again, I don't recall ever trading a stock on margin that swings 100% either direction in one day.
Speaking of margin calls, a brokerage usually gives you the courtesy call saying, "either you liquidate (or give us more money to cover), or we'll do it for you", but on GME I could see skipping that call given the volatility.