Robinhood is automatically initiating GME sell orders on users' behalf • Hacker News Board

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#141

Post by mikestew » Thu, Jan 28, 2021, 9:21 PM UTC

simonsaidit wrote: post #108

mikestew wrote: post #98

Yeah, 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.

You think a lack of volume from retail traders on Robinhood is the cause of the drop? To put it mildly, that's a little naive.

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#142

Post by runako » Thu, Jan 28, 2021, 9:22 PM UTC

woah wrote: post #133

The idiotic takes on this GME situation are beyond belief. What did people think was going to happen? GME goes to a million and everyone becomes a millionaire?

> What did people think was going to happen?

That brokerages would remain neutral and allow buy and sell orders of listed stocks like they do on other days. It's totally fair to acknowledge a sudden and unpublished rule change at the market open that foreseeably led to big price swings.

At a minimum, the SEC needs to step in and describe the exact circumstances when brokerages are allowed to unilaterally halt sales of securities. Markets where people don't understand the rules are worse than casinos.

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#143

Post by wyre » Thu, Jan 28, 2021, 9:22 PM UTC

guerrilla wrote: post #86

almost_usual wrote: post #71

Earlier quoted context omitted.

> Who would remmain using them after this? Most users who don’t know anything about WSB probably

Who's that? It's been headline news for at least three days.

Trump still has millions of supporters after years of negative headlines.

Idk who is still going to use RH but I know they exist.

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#144

Post by f430 » Thu, Jan 28, 2021, 9:22 PM UTC

mikestew wrote: post #98

Yeah, 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…

Market manipulation is still market manipulation whether you write them in tiny font letters or buried under a pile of legal verbosity.

Spirit of the law is always considered in situations like this when it isn't explicitly made clear (like on the splash screen) will always fall under scrutiny and rejected at the jury level.

You can sign away your life but it doesn't make it legal because there are fundamental laws that pertain to human rights in the West as such are security laws.

RH broke the trust and if what we are hearing is true, they may have colluded with the conflict of interest parties that took massive short positions before pressuring RH to halt trades may lead to actual jail times for the people involved.

In the past the Obama administration has been soft on wallstreet but the Biden administration has signaled they are willing to play big government. Especially as politicized as the whole GME/WSB has gotten, there's zero chance they will pass up on the opportunity to win the popular support.

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#145

Post by toolz » Thu, Jan 28, 2021, 9:23 PM UTC

stickfigure wrote: post #113

simonsaidit wrote: post #108

Earlier quoted context omitted.

The difference here is they prevented people from starting new positions while still allowing closing them .. effectivly being the cause of the drop.

> cause of the drop Not sure I understand this perspective. GME was a balloon floating around in a needle shop.

You don't understand how disallowing people to buy into a stock causes the price to drop, or you disagree that disallowing the purchase of a stock causes the price to drop? From my perspective it seems rather straight forward that if you artificially limit demand and not supply, you'll almost always see price drop.

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#146

Post by sauwan » Thu, Jan 28, 2021, 9:23 PM UTC

avree wrote: post #13

He was margin called. This is literally how margin works, has nothing to do with GME or the Robinhood furor.

Maybe. Would he have been margin called without their earlier action?

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#147

Post by bilbo0s » Thu, Jan 28, 2021, 9:23 PM UTC

tibbon wrote: post #112

mikestew wrote: post #98

Yeah, 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…

I honestly didn't read the agreements on Robinhood. Before you call me stupid or irresponsible, I'm going to say practically no one reads these agreements, and even fewer understand them. The NYT a few days ago had an opinion piece on how no one reads the TOS for things like this. A very choice line: > A 2012 Carnegie Mellon study found that the average American would have to devote 76 work days just to read over tec…

Here's the thing though, it's always been this way with margin agreements. Even before tech cos with impenetrable ToS agreements.

I'm beginning to wonder if the people who rushed into this "war" really ever knew what they were getting themselves into? Especially the ones who bought on margin. It's such a risk, and obvious loss in this situation, that I can't imagine any non-suicidal financial actor doing it?

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#148

Post by SamBam » Thu, Jan 28, 2021, 9:23 PM UTC

Animats wrote: post #137

woah wrote: post #133

The idiotic takes on this GME situation are beyond belief. What did people think was going to happen? GME goes to a million and everyone becomes a millionaire?

Hey, it worked for Bitcoin. I never expected that. I thought Bitcoin was overpriced at US$20.

I think the Bitcoin example was exactly what the investors were thinking. A stock that magically always goes up and everybody gets rich.

With a real stock, somebody has to be left holding the bag at the end. (Probably with BitCoin as well, but that's a separate discussion.)

My understanding was that, with the short squeeze, for a certain number of those stocks the buyer would be the hedge funds. But it seems like at this point there must be way more stocks that the buyers have bought than the hedge funds have shorted, no?

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#149

Post by southeastern » Thu, Jan 28, 2021, 9:24 PM UTC

mikestew wrote: post #98

Yeah, 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…

>Difference is, I didn't run to Reddit to display my ignorance to the world.

Erm isn't the point of communities like Reddit to discuss? The implication that there's a certain class of people who are suited to stocks and a certain class that isn't is exactly why people are so impassioned about this right now.

Re: Robinhood is automatically initiating GME sell orders on users' behalf

#150

Post by ineedasername » Thu, Jan 28, 2021, 9:24 PM UTC

we placed it to mitigate the risk on your account

Wow, that's pretty awful since liquidating the position may actually put the user at a net loss, which wouldn't avoid risk: It would actually "instantiate" the potential risk of having to sell the stock after falling below the purchase price.

Why not give users the opportunity to provide more collateral for their margin?