An Update on Market Volatility • Hacker News Board

Re: An Update on Market Volatility

#31

Post by EpicEng » Thu, Jan 28, 2021, 9:52 PM UTC

systemvoltage wrote: post #12

cowllin wrote: post #4

Too little too late as far as brand reputation. Feels like #DeleteUber on steroids.

Mark my words - Robinhood is going to be fine and it will have negligible impact. They have a strong product and better than anyone else in the market as a mobile app.

>They have a strong product and better than anyone else in the market as a mobile app. reply

Guess you've never heard of ThinkOrSwim. RH is a toy. It's fine for most purposes, but not much more than fine. They consistently fill orders at a sub-optimal price and the amount of downtime is a joke.

This hurts them and I think you're wrong about their future. They're helping to screw over the very people who have made them successful. We'll see what the actual fallout is given their relationship to Citadel and Citadel's relationship with Melvin Cap.

Re: An Update on Market Volatility

#32

Post by zug_zug » Thu, Jan 28, 2021, 9:52 PM UTC

miguelrochefort wrote: post #6

"As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment." Can anyone translate that? It seems to be referring to: * https://en.wikipedia.org/wiki/Net_capital_rule * https://en.wikipedia.org/wiki/Automated_clearing_house

Yeah, as a completely disinterested party, I'm entirely unclear as to what legal obligations a middleman like robinhood could be under to prevent them from allowing parties to buy/sell stock on their platform. I think they owe a much greater burden of transparency if they want to convince the neutral, educated who don't have a personal stake in the issue that they didn't manipulate the market (illegally?).

Re: An Update on Market Volatility

#33

Post by 2bitencryption » Thu, Jan 28, 2021, 9:52 PM UTC

gmaster1440 wrote: post #7

We're in a bubble that's being used instrumentally in a game of chicken between average joe with RH account and hedge funds on their short positions. There's more to gain from this because of the social aspect (social change and reform), but also more to lose (bubble bursting on the average citizen that has more to lose personally than a fund). I'm obviously not cheering for the funds here, but I do worry for people…

I can't help but facepalm that people are genuinely encouraging one another to buy a stock that is so obviously overvalued, and then hold it at that price as long as possible...

there are not many guarantees in trading, but that is a guarantee to lose money. and because it's under the guise of "sticking it to the man" people have become even less rational about their money.

so when the stock eventually corrects to where it belongs for a dying retailer selling physical media in the digital age... I can only imagine the millions "surprised pikachu face" that will ensue

Re: An Update on Market Volatility

#34

Post by totalZero » Thu, Jan 28, 2021, 9:52 PM UTC

miguelrochefort wrote: post #6

"As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment." Can anyone translate that? It seems to be referring to: * https://en.wikipedia.org/wiki/Net_capital_rule * https://en.wikipedia.org/wiki/Automated_clearing_house

> SEC net capital obligations

They have to meet certain governmental guidelines on deposits vs asset price risk.

> clearinghouse deposits

Clearing members have to deposit money into clearinghouses as insurance in case a firm goes under.

Re: An Update on Market Volatility

#35

Post by Jtsummers » Thu, Jan 28, 2021, 9:52 PM UTC

DiabloD3 wrote: post #21

systemvoltage wrote: post #12

Earlier quoted context omitted.

Mark my words - Robinhood is going to be fine and it will have negligible impact. They have a strong product and better than anyone else in the market as a mobile app.

How are they going to deal with the fact half of their reviews on Google Play are 1 star, and their average is now 1.x star? Google isn't going to bend over backwards for them to delete legitimate user reviews.

Android isn't the largest share of smart phone users in the US, and it's still 5 stars on the iOS app store.

Re: An Update on Market Volatility

#36

Post by legitster » Thu, Jan 28, 2021, 9:52 PM UTC

awillen wrote: post #25

I don't understand how they can blame capital requirements and potentially having to cover customers' losses (that was Interactive Brokers) for stopping purchases of the stock. Unless you're talking about buying on margin, there's no risk that you'd have to absorb any loss for someone who just buys a share of the stock through you with their own cash.

>Unless you're talking about buying on margin

I can assure you, there was a lot of margin purchases happening.

Re: An Update on Market Volatility

#37

Post by benzofuran » Thu, Jan 28, 2021, 9:53 PM UTC

The class action lawsuits out of this are going to be amazing to watch. Once the announcement was made, how many sales were done in response, which has now blown everything even further into unknown territory?

Re: An Update on Market Volatility

#38

Post by mssundaram » Thu, Jan 28, 2021, 9:53 PM UTC

firebaze wrote: post #28

Just stay away from robinhood. Use a serious broker. Even if you - privileged as you are - think you can deal with that. Others may not see as far, and be scammed.

Recommendation for a serious broker?

Re: An Update on Market Volatility

#39

Post by School-Cotton » Thu, Jan 28, 2021, 9:53 PM UTC

systemvoltage wrote: post #12

cowllin wrote: post #4

Too little too late as far as brand reputation. Feels like #DeleteUber on steroids.

Mark my words - Robinhood is going to be fine and it will have negligible impact. They have a strong product and better than anyone else in the market as a mobile app.

Do they have any sort of moat, though? What stops Fidelity or Schwab from hiring 10 iPhone devs and making their app just as fun and easy to use?

Re: An Update on Market Volatility

#40

Post by EpicEng » Thu, Jan 28, 2021, 9:53 PM UTC

probe wrote: post #9

This was an awful PR response. I actually buy the reasoning behind it - but putting out a corporate speak like this instead of trying to emotionally relate to upset users? Smh

>I actually buy the reasoning behind it - but putting out a corporate speak like this instead of trying to emotionally relate to upset users? Smh

Their reasoning makes no sense. If someone isn't buying on margin, who are they protecting exactly? Citadel and Melvin Capital, that's who. The funds weren't "protected", were they?