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AOC considering hearing over RobinhoodApp decision to block purchasers of GME

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Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#61

Post by N1H1L »

adoxyz wrote: post #37
newacct583 wrote: post #29

Earlier quoted context omitted.

Yes, but... they're both wrong. The trades that Robinhood blocked were objectively bad trades, and the people they stopped from buying would almost certainly have lost all that money. Now, I agree that there's a good first principles argument (and also a bad populist one) that people should be allowed to trade their own money into scams if they want. But the idea of proving damages here based on the idea that GME was…

This is a bad take. There's millions of bad trades you can make. Should Robinhood block all of those as well?

Also how do you quantify a bad trade? How much lost money? I trade on Robinhood too (not GME though), and just two weeks back I lost money on Nio stock.

Is that a bad trade? Should Robinhood have stopped me from buying that stock?

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#62

Post by paulgb »

akvadrako wrote: post #60
paulgb wrote: post #28

The ironic thing is that the end result of this will probably be a ban on payment for order flow which will destroy the commission-free trading model. We’ll go back to paying $5/trade or whatever and everyone (except HFT) will ostensibly be happy.

It's not $5 a trade. Look at IBKR rates; most US trades are well under a dollar.

It looks like on their pro product $1 is the minimum, so most retail trades would be $1 but not well under that. Their “lite” offering is free but subsidized by PFOF.

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#63

Post by N1H1L »

floor2 wrote: post #53

I know everyone is excited to bring out their pitchforks, but let's take a moment to consider this from an objective position. Imagine a broker knowingly profits from executing trades that are part of a market manipulation- the SEC can and does come after them with huge fines. Usually it's years later in the unwinding of some shady hedge fund or corrupt sovereign wealth fund or pump&dump operation. In this case, it's…

I agree with Robinhood's fears on principle. What however riles up people (legitimately IMO) is that larger funds making equally suspect trades are basically let off with a slap on the wrist.

A strong argument could be made that Tesla's stocks last year have been pumped up irrationally by funds last year too, and if a market correction comes the funds behind it will face zero to minimal consequences. Same in 2008.

At the end of the day, the differential rules for individual traders and big funds riles people up.

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#64

Post by kllrnohj »

bordercases wrote: post #24
purple_ferret wrote: post #11

You get what you pay for with a 'free' app

Trade execution was locked on TD Ameritrade (and I think Interactive Brokers?) as well.

It was not. Margins & shorts were locked on TD Ameritrade, but you can still buy.

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#65

Post by piva00 »

floor2 wrote: post #53

I know everyone is excited to bring out their pitchforks, but let's take a moment to consider this from an objective position. Imagine a broker knowingly profits from executing trades that are part of a market manipulation- the SEC can and does come after them with huge fines. Usually it's years later in the unwinding of some shady hedge fund or corrupt sovereign wealth fund or pump&dump operation. In this case, it's…

How could they be liable though? This is a black swan, there were no risk models predicting this, Robinhood probably didn't have a policy for market manipulation done in a decentralised and diffuse way, probably because it was never done.

It's really hard to objectively defend Robinhood, it's not their job to be the gatekeeper for millions of small fish trading some peanuts. It's quite patronising.

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#66

Post by piva00 »

kortilla wrote: post #44

I hope she doesn’t get involved much. Her inquiries are less about fact finding and more about owning the corps because capitalism is bad. This will just become a stupid political grandstanding forum.

Objectively speaking, capitalism is quite bad for a lot of people. Might be one of the best systems we've ever came up with, it's still quite bad and needs some fixing.

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#67

Post by philosopher1234 »

kortilla wrote: post #40
philosopher1234 wrote: post #10

Earlier quoted context omitted.

AOC is such a firebrand. I love it. Not a lot of politicians who give me the sense that they're actually fighting for me.

How does that tweet make you think she is fighting for you and not just for publicity?

Why would it make me think any different? She's right.

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#68

Post by koheripbal »

npmaile wrote: post #23
s_dev wrote: post #3

The fact that Ted Cruz and AOC completely agree on this shows you how unprecedented this all is.

This has happened before, and is a great litmus test for something that is either very bad or very good.

More importantly, neither heads of the party agree. It's more like the extremists vs the centrists.

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#69

Post by koheripbal »

philosopher1234 wrote: post #10
krapp wrote: post #8

Earlier quoted context omitted.

About that... https://twitter.com/AOC/status/1354848253729234944

AOC is such a firebrand. I love it. Not a lot of politicians who give me the sense that they're actually fighting for me.

She reminds me of Trump in his early primary days.

Lots of zingers on Twitter - no experience - no compromise.

Re: AOC considering hearing over RobinhoodApp decision to block purchasers of GME

#70

Post by akvadrako »

paulgb wrote: post #62
akvadrako wrote: post #60

Earlier quoted context omitted.

It's not $5 a trade. Look at IBKR rates; most US trades are well under a dollar.

It looks like on their pro product $1 is the minimum , so most retail trades would be $1 but not well under that. Their “lite” offering is free but subsidized by PFOF.

Look here: https://www.interactivebrokers.com/en/index.php?f=1590&p=sto...

USD 0.0035 / share, min $0.35 / trade.

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