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Statement of SEC Regarding Recent Market Volatility

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351–360 of 906 posts

Re: Statement of SEC Regarding Recent Market Volatility

#351
post #75

There’s a long history of similar occurrences that follow along a common line: whatever appears to support individual investors will be the path taken by politicians and regulatory bodies. Right now it appears that the public wants to be able to trade on their terms because there is this narrative that the little guy is finally sticking it to the big bad hedge funds. In reality there is probably very little truth to…

> In reality there is probably very little truth to this.

The whole premise of your argument is based on ‘probably’

Re: Statement of SEC Regarding Recent Market Volatility

#352

"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…

"Abusive or manipulative trading activity that is prohibited by the federal securities laws." Is that aimed at "professional hedge funds" or self-proclaimed "autists" in an internet forum?

It is aimed at the people who shut down buying GME, then tried to create a downward trend at unusual low volumes to try to scare the wallstreet bets crowed into abandoning their positions in GME to allow short positions to recoup their gigantic losses.

It failed mind you. The shorts are still bleeding and the GME hold is continuing though just at a slightly reduced price.

Retail investors who have bought GME can afford to wait out the antics of hedge funds, but those funds are on borrowed time to try to turn the loss of a century into some kind of win, or they are done for good. Ask yourself, who do you think is trailing the borders of legality? A teen who goes “hmm GME at 100$? Sure why not, I’ll take 10” or the hedgefond manager calling all his friends to stop trading because his fund is going bankrupt on a stupid bet he made that he would have gotten away with if it wasn’t for those meddling kids.

Re: Statement of SEC Regarding Recent Market Volatility

#353

Earlier quoted context omitted.

Many just want to screw the hedge funds, finally it's their blood in the water.

I don't get this. I can't imagine the professional investor class is still blindly following their shorts. They're all out by now, aren't they? If the "little guys" are making money I tend to think it's coming from other little guys.

Why would you short when you can buy a put option?

Re: Statement of SEC Regarding Recent Market Volatility

#354

Earlier quoted context omitted.

You may want to check what happened to certain brokers on Jan 15th 2015 before you start chucking accusations out. It’s clear you don’t understand how these brokers work and how they interface with the broader market.

Why would you post that without including information about the event and brokers you are referencing. You're not really adding to the information content on this site. I assume you were talking about this event: https://www.leaprate.com/forex/liquidity/algo-traders-worsen...

Because if people are going to start playing these games they need to do the bare minimum of research. Their money is literally on the line.

Re: Statement of SEC Regarding Recent Market Volatility

#355

Earlier quoted context omitted.

You can get more the 100% without naked shorts, sure, but is that legal?, does SEC allow that?, nobody is concerned that if there is a short squeeze there is no chance in hell to close out? (like we are seeing here) The point I tried to make was - this short was done to drive price down to zero (it can do that with that large of a position) in collusion with negative media reports from friends... That is manipulation…

The same director noted that the SI%, according to their way of calculating*, is actually at 55% (still very high). And like the poster below stated, one cannot really know the difference between a borrowed and "ordinary" stock . Webull came out and clearly stated that their clearinghouse had issues with putting up collateral for the tickers and thus had to shut them down [0]. And while Robinhood has not come out dir…

> And while Robinhood has not come out directly

So you were speculating on robinhood reason.

> The same director noted that the SI%, according to their way of calculation, is actually at 55%

Thanks, I'll check that out, weird since there are contradicting stories likely due to that short positions are not disclosed.

Re: Statement of SEC Regarding Recent Market Volatility

#356
post #75

There’s a long history of similar occurrences that follow along a common line: whatever appears to support individual investors will be the path taken by politicians and regulatory bodies. Right now it appears that the public wants to be able to trade on their terms because there is this narrative that the little guy is finally sticking it to the big bad hedge funds. In reality there is probably very little truth to…

Re: Subtleties. I disagree. I think a big part of why this whole thing is fascinating is the depth. Yesterday morning, financial press were blathering generalities pinning WSB as market manipulators and calling for regulation to stop them. That is, stop retail investors trading at a scale that moves markets. IE, the stuff that insiders get away with regularly. Between yesterday afternoon and now, millions of people h…

Yesterday premarket when Robinhood announced the cessation of trading in these ultra volatile stocks, was there a deep analysis of what led them to that decision? A measured consideration of why they might do that?

Of course not. Immediately a false narrative was created that citadel forced them to do it under threat that they would stop their order flow. Had any politician or public figure merely suggested we let the CEO of Robinhood explain the decision, they would’ve been dragged by the Twitter mob. Just look at how Steve Cohen, Lee Cooperman and John Fortt were shamed for raising what I believed to be perfectly legitimate questions. But nobody is interested in legitimate questions when it’s hive mind mob rule which is what always takes hold in a bubble. In fact the vilification of naysayers is one of the tell tale signs of a speculative bubble.

To answer the last question who are the speculators here, shorts or wsbers? Both. But what I’m talking about are the speculators who are simply buying this up with the expectation they will make huge gains like deep fucking value. They can say all they want about how they don’t care about potential losses and this is something bigger. Total nonsense. Let’s see who gets blamed and who plays the victim if we get a crash.

It’s an interesting world when Mark Cuban and chamath palyhapitia can be portrayed as champions of the little guy when they have made billions of dollars at their expense. Chamath takes a SPAC public every Tuesday. Who do we think are buying these up? Warren Buffett? Didn’t Cuban make his fortune selling a worthless business to Yahoo? These guys are using this entire thing to build their own popularity.

Re: Statement of SEC Regarding Recent Market Volatility

#357
post #329

Earlier quoted context omitted.

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 h…

The narrative doesn't matter. It's a PR problem. Lots of people wanted to buy GME, then RH suddenly cut them off, offered no reasonable explanation, and then their CEO went on the news to just spew some content-free noise. Sure, there were reasons behind this ban, perhaps good reasons - but they weren't explained by RH, and RH to this moment didn't even admit to the cause of the problem.

Sounds like solid ground for loss of user trust to me.

See also: https://news.ycombinator.com/item?id=25957097.

Re: Statement of SEC Regarding Recent Market Volatility

#358

Earlier quoted context omitted.

Many just want to screw the hedge funds, finally it's their blood in the water.

Of course! Many are living hand-to-mouth in dismal conditions and unable to afford basic necessary expenses, while they see robber barons making a killing by putting thousands of already-poor people out of work. Hating the hedge funds is rational, for many.

Irrational, but understandable.

Re: Statement of SEC Regarding Recent Market Volatility

#359

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…

Hey, it's not market manipulation when you're an academic or part of the oligarchy of experts with invested positions. These people are to be cherished and flaunted on news media to state their "unbiased" opinion of market movements. It's manipulation when you're an average joe telling other average joes to stick it to a firm that's trying to bankrupt another company that's struggling through the pandemic.

Re: Statement of SEC Regarding Recent Market Volatility

#360
post #345
post #184

Earlier quoted context omitted.

Shorting more stock than what actually exists is not really that different from shorting less stock than what actually exist. Imagine you short 50% of the outstanding shares. Now there are 50% more long positions than outstanding shares. It's not substantially different from having 100% or 150% more long positions than outstanding shares.

You could stipulate, though, that the outstanding short position mustn't exceed the net position, or equivalently that the total long positions can't exceed twice the net position. Why not? (This would require new regulation, but not be impossible, I think.) If the total long or short positions exceed the underlying economics by a lot, you create all sort of weird incentives for manipulation, as can be seen in the CD…

You could stipulate whatever you wanted, but there is nothing special about that threshold in particular.

I fully agree that derivatives can create all sort of problems in many cases, including when the nominal amount of the positions is much higher than the actual amount of the underlying.

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