91–100 of 906 posts
Most of the retail investors couldn't buy specific stocks on most exchanges for some time (tastytrade, ib, rh etc). I wouldn't call that "resilient".
In summary, just a vague "we are watching" statement.
It's a giant government body that overseas a very large tender market of money, they can't just make rash decisions. They need to review, see how it plays out in the longer term, and see how the government is going to want to adjust.
I don't think technically anything (minus the robinhood/other people restricting buying, and even that who knows) that's going on is really "wrong-doing" on the surface. Everything seems to be by the book.
So they'll need to dig deep into the stock and find evidence and provide that evidence to the body that reviews stuff.
You probably won't hear of any changes for months if not years if at all.
"The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities. In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity." This shoul…
It specifies trading activity . I read this as a warning to WSB, not their brokerages.
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>Could be? It's an open, publicly-documented market manipulation event. Strange question, what's the bar for market manipulation? For example if a company took out debt to buy their own stock in order to drive up the price would that count?
If the company were to issue a statement that they believed their actions would raise the share price, then yes. https://www.law.cornell.edu/uscode/text/15/78i
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I can't find any documentation that a short squeeze is illegal. Can you?
It's in the SEC rules. "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." From https://www.sec.gov/investor/pubs/regsho.htm . It's an open question whether this case is more of a natural occurrence or "a scheme to manipulate", given that it's all randos who found a Schelling point and are now hyping…
People keep saying that the hedge funds 'knew what they were getting into', and are therefore fair game. But they could well have thought that they were protected by this regulation. It's unlucky for them that they got squeezed by loveable retail investors rather than another hedge fund that the SEC would have no qualms about prosecuting.
In the debate between the free market vs regulation, the worst possible outcome is to have people thinking they are protected by regulation when they in fact aren't.
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It’s aimed at both, presumably. It’s not like hedge funds have never gotten in trouble for abusive trading practices.
This. It's clear that everyone should be lawyering up depending on what positions they had when they started pumping this idea to the masses. That said, I'm a big believer in "a fool and his money". If there are hedge funds or retail investors out there who, perhaps, didn't understand all the risks of what they were doing, protecting them from their folly only causes more problems in the future. As horrible as this s…
Regulated entities who have access to tools or information not available to retail investors, or who applied financial pressure to manipulate access to the markets, or did not disclose conflicts of interest...that seems like a much easier case to make.
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The big traders probably have friends in high places, so I suspect they're going after WSB and not wall street who caused the issues in the first place.
There is no "probably." It is well-known that people leave their civil servant jobs at regulatory industries, after putting in their time, and bring their know-how and connections to big banks and hedge funds in return for cushy salaries.
What are the odds of a flash crash in the next week as a result of this activity? The system of banks and market makers and clearing houses is a always way more coupled than the the owners let on... history shows they don't know how to risk manage these sorts of situations.
From a distance, this is all a storm in a teacup. It's a small handful of stocks, and every single one in S&P500 is waaaay bigger, in terms of trading volumes and market cap. Anything can happen, but in finance terms, this is tiny so far.
What are the odds of a flash crash in the next week as a result of this activity? The system of banks and market makers and clearing houses is a always way more coupled than the the owners let on... history shows they don't know how to risk manage these sorts of situations.
Newest from the front lines, Freetrade (UK trading app) just blocked buy orders for US stocks... but they explicitly pin it on "a sudden and unexpected decision by our FX provider, and their bank"[0]. In another statement, they also express their deep unhappiness about it[1]. Assuming they're being honest - and I see no reason to doubt it - it's refreshing, compared to Robin Hood's communications, and more importantl…
Nota bene: I do hold some Nokia stocks, but it is from (Nasdaq) Helsinki and not from NYSE and it was already in my possesion waay before these brouhaha. I don't hold any other stocks that were affected, including stocks for GameStop.