Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Statement of SEC Regarding Recent Market Volatility

sec.gov

Post reply on HN
Print view View original

321–330 of 906 posts

Re: Statement of SEC Regarding Recent Market Volatility

#321

Post by seabird »

klodolph wrote: post #245
jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

> 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. I will say that I’m not too busy for this at the moment, and getting to my very basic level of understanding has required me to sort through, at the very least, a fairly decent chunk of reference material and reading interpretations and explanatio…

Not an expert myself, but I've been interested in the field for a while.

The clearinghouse ultimately moves the security and money to their right place, and allows brokerages to let each side move on faith that everything will be right once the dust settles. On settlement risk, a key point is that there usually isn't a huge amount of risk. This is why DTCC is nearly imperceptible for retail players. In this case, the volume and short situation is so extreme that clearinghouses are getting antsy that there may not be enough of the securities available to actually make good in the end, so they're twisting arms at brokerages and requiring they have 100% of it on-hand so that there's no surprises when they go to officially give the buyer their security and the seller their money. This is obviously very expensive, which is why brokerages started limiting buying of volatile securities, have had to take out money to get 100% hedge on these trades, and why RH is allowing trading of volatile securities but only in volumes of 5.

Market makers buy stock for delta hedging because if they don't, they could get caught out and either deliver at a loss or not be able to deliver at all. Figuring out how much you need is a trick of the trade; if you or I knew what their strategy was, their position could be in danger.

Re: Statement of SEC Regarding Recent Market Volatility

#322

Post by hogFeast »

jaywalk wrote: post #256
hogFeast wrote: post #158

Earlier quoted context omitted.

You realise that all of this stuff has specific rules. There are specific rules about posting research, there are specific rules about media (newspapers and TV), there are specific rules about algorithms (I will answer your questions: no, no, no, no...the last question is...odd, if you know about sure-win algos then you must be very rich). And all of this stuff has happened before, it happened in 2000, lots of people…

I'm certainly no expert in the rules at play here, but I can't fathom how posting on a public forum and saying "let's all go buy $GME and screw these hedge fund guys!" would not be absolutely protected by the First Amendment. There's no fraud or anything like that, and you're not posting anything false or misleading about the company. If a bunch of people feel like it's a good idea and want to join in, then it is wha…

Because there is the first amendment...and there is securities fraud. You are saying: anything that anyone says at any time has no legal consequence because of the first amendment...no.

Misleading stuff is being posted on wsb. And some people are likely not being honest about what they are doing (i.e. telling people to buy when they are selling). This is how pump and dumps work. If you buy a stock worth $5 for $300...your only option is to sell to someone who knows nothing. That is what it is happening now.

The stuff about hedge funds only came later, it is funny that people are citing this now (as ever, financial markets and ex-post rationalisations...human reasoning is amazing). All this stuff about revolutions against bankers, and the wealthy, and politicans leaping onto it...lol. The funniest thing about this is that people who have the least knowledge believe they need protection the least...and when this blows up, they will still say it is rigged. Oh well. Plus ca change.

Re: Statement of SEC Regarding Recent Market Volatility

#323

Post by ryandrake »

klodolph wrote: post #245
jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

> 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. I will say that I’m not too busy for this at the moment, and getting to my very basic level of understanding has required me to sort through, at the very least, a fairly decent chunk of reference material and reading interpretations and explanatio…

Whenever I read about a topic that I don't know much about, part of me is always wondering if the writer is throwing all these exotic words and greek letters in there because they are really an essential to understanding the topic, or because they just want to over-complicate it to sound smart and blow their own horn.

On one hand we have Occam's Razor: "the simplest solution is almost always the best." On the other we have "For every complex problem there is an answer that is clear, simple, and wrong." How does one know which to apply?

Re: Statement of SEC Regarding Recent Market Volatility

#325

Post by jorblumesea »

tompccs wrote: post #212
jancsika wrote: post #121

A Moment in the Life of an HN Genius: 1. Reads a technical document outside their domain. 2. Feels dumb because they don't have a grasp on any of the concepts. 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. 4. Sees the word "manipulation" 5. Substitutes the laymen's definition of "manipulation"…

I am so sick of this 'stay in your lane' attitude. Time and time again, experts have been shown to have consensus opinions which are wildly off from reality. You can almost set your watch to how often an outsider will analyse a situation from first principles and make money off the 'experts', especially in the stock market. You're welcome to your opinion but this appeal to authority is seriously wearing thin. Pretty…

But there's really an entire class of people who have no clue what they're talking about weighing in on things that they clearly do not understand.

It's one thing to study this in your own time and make meaningful contributions. It's another to assume that simply because you have an opinion, it's somehow valid.

Re: Statement of SEC Regarding Recent Market Volatility

#326

Post by kenneth »

dkrich wrote: post #150
BoorishBears wrote: post #127

Earlier quoted context omitted.

It boggles the mind people think hedge funds can't profit off a mad rush like this...

I mean do people really believe Robinhood traders are moving billions of dollars of stock a day? Most admit that they aren’t selling and buying at higher and higher levels. That translates to very little cash to buy more. There is absolutely no way that these moves can be attributed to retail traders or short squeezes. The narrative that these are retailers causing every significant move higher and with every move th…

Let's say the average bet is 1-5k into this the average Robinhood user invests around 5k), it only takes 200k-1M buying in to move $1B into the stock. When you start with a $200M market cap on a heavily shorted stock, you easily end up where we are today

Re: Statement of SEC Regarding Recent Market Volatility

#327

Post by FabHK »

politician wrote: post #247
TeMPOraL wrote: post #220

Earlier quoted context omitted.

I think this "is allowed" for the same reason that I can borrow a book from you, sell it on Amazon, and when you ask for your book back, buy a copy of that same book on Amazon and give it to you - but in the meantime, the person who bought your book from me can lend it to yet another person, who does the same as me. In other words, this works simply because stocks can be sold and borrowed, and they don't carry proven…

Security ownership is the killer app for blockchain.

No. Way too little throughput (unless we slow down trading considerably, which is a good idea in itself, IMHO).

Re: Statement of SEC Regarding Recent Market Volatility

#328

Post by kd0amg »

tompccs wrote: post #257
sailingparrot wrote: post #230

Earlier quoted context omitted.

> Time and time again, experts have been shown to have consensus opinions which are wildly off from reality No, it's just that it's not interesting when an expert is right about their domain expertise so we don't talk about it. The issue is people getting skewed by this and then inferring that it must mean, on average, that their outsider opinion is as valid as experts, but really, it's not.

Of course, an outsider can't simply declare something to be true by dint of being an outsider. You need to reason it. Or, in the market, bet on it, and you'll see who wins out. But experts should be held to the same standard.

> Or, in the market, bet on it, and you'll see who wins out.

This is a fine way to settle debates about the health/viability of a publicly traded company, but it doesn't help much when the point of contention is a question of law.

Re: Statement of SEC Regarding Recent Market Volatility

#329

Post by gruez »

josephorjoe wrote: post #144
malwarebytess wrote: post #119

Earlier quoted context omitted.

Robinhood says that they basically couldn't fulfil the buy orders because they ran out of money, or couldn't fulfil the orders without breaking the rest of the platform. I imagine whatever the reason there's going to be lawsuits.

Whatever else happens, Robinhood should not survive this. They clearly violated their customers' trust, so their customers should leave them. And I will be completely unsurprised if when the dust settles it turns out they acted illegally. Also, they suck at lying.

>They clearly violated their customers' trust, so their customers should leave them.

They did? That might be the case according to the Popular Narrative (that the Hedge Funds phoned them and said "shut it down"), but reality is that they couldn't front the deposits for the customer's trades, due to the insane volatility. In that case it's less violating their customers' trust and more having a product that couldn't handle extreme circumstances well. They are a discount brokerage after all, some compromises had to be made.

Re: Statement of SEC Regarding Recent Market Volatility

#330

Post by Armisael16 »

nvarsj wrote: post #205
sidlls wrote: post #161

Earlier quoted context omitted.

That is pretty accurate even for many software and tech related discussions here (it’s a big field with lots of specialties).

Yes, it's a reductionist argument that can apply to literally anything. Let's just delete all user discussions on the internet, and only allow PhD granted experts to discuss things on panels where they must provide primary sources for everything. Or you could simply point out when someone is wrong, and explain why, assuming you are an expert. Then we all learn.

> Or you could simply point out when someone is wrong, and explain why, assuming you are an expert. Then we all learn.

That’s pretty rare in online discussion, especially the kind with voting. The most popular argument wins, not the most correct one.

Post reply on HN