151–160 of 216 posts
Really disappointed at HN's recent stance on both crypto and GME. Far too many calls for regulation and control. This is not the free market proponents platform I used to know.
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They didn't change the rules of the game. The volatility and risk changed, thus the collateral requirements changed. Note: I am not a financial professional. I'm not sure if anyone from wsb should be prosecuted; but I will say that if another hedge fund had tried to do what wsb did, it would have been clearly and unambiguously illegal market manipulation. I do think it is quite likely there were some financial profes…
If they required 100% collateral, why did that mean Robinhood stopped trades? Why couldn't they allow trades with 100% settled funds?
Typically this collateral is small, like 3% because most stocks aren’t volatile and buyers almost always pay up.
But when a stock gets incredibly volatile, there is a risk that buyers of $480 shares may refuse to pay when the price is $90 two days later. Especially when the buyers are a bunch of new retail investors who just opened accounts.
You could buy GME from most brokers because they didn’t have the GME volume Robinhood had, and they had more collateral, so the 100% collateral requirements for GME were manageable.
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Not quite right. There's the DTC (which carries out 95% of the trades), then there's clearing houses (sometimes a seperate entity, sometimes part of the broker: the larger ones all do their own clearing. e.g. Robinhood has their own clearing house), then there's the brokers, then the traders. The DTC said 'we need 100% collateral on these trades' (probably because they viewed there being a significant risk that someo…
> The DTC said 'we need 100% collateral on these trades' (probably because they viewed there being a significant risk that someone, somewhere, would not be able to pay up for the trades they're making in a big way This sounds like nonsense to me. After all the job of the Clearing House is to make sure the cash is balanced correctly after the transactions. Or realistically speaking a never ending chain of transactions…
That’s a perfect storm for nonpayment issues.
It's interesting watching /r/wallstreetbets oscillate between "We did nothing wrong!" to "Well okay, some people were doing some things that were wrong, but hopefully no one will notice." https://www.reddit.com/r/wallstreetbets/comments/lj8djx/day_... (I don't personally believe that anyone did anything that should be prosecuted here, but what I believe is irrelevant to courts.) There is one thing that (in my un-humb…
The elephant in the room that I don't see much discussion about is the use of options by small retail accounts. There are piles of rules around trading in accounts But then those same guys are allowed to trade options. An option has a 100x built in leverage. A simple solution to this problem is to require the underlying amount of margin or cash in the account to purchase the option. ie. If you want to buy a $3 option…
>Yes, this effectively puts options out of reach to small investors, but... maybe that's a good thing. What a fantastic way to ensure that only The Right People (TM) can make money off of anything else other than trading shares.
To be fair though, this is why the regulators exist. And they've got their post government careers to worry about so they will have to do something behind this supposed calamity. But don't worry, like the owner who crams their cat into a brightly colored sweater, they're doing it to protect you.
What about Musk making tweets about bitcoin whilst his company has a large investment. Isn't that market manipulation or maybe does not apply to rogue billionaires.
All company assets need to be auditable, ie an auditor can physically verify their presence. There is no way to do this with Bitcoin, which is a huge problem for public companies buying it.
It's interesting watching /r/wallstreetbets oscillate between "We did nothing wrong!" to "Well okay, some people were doing some things that were wrong, but hopefully no one will notice." https://www.reddit.com/r/wallstreetbets/comments/lj8djx/day_... (I don't personally believe that anyone did anything that should be prosecuted here, but what I believe is irrelevant to courts.) There is one thing that (in my un-humb…
They didn't change the rules of the game. The volatility and risk changed, thus the collateral requirements changed. Note: I am not a financial professional. I'm not sure if anyone from wsb should be prosecuted; but I will say that if another hedge fund had tried to do what wsb did, it would have been clearly and unambiguously illegal market manipulation. I do think it is quite likely there were some financial profes…
Older RoaringKitty YT spreadsheet videos (before he became all about GME and before much of anyone watched his streams) are interesting to watch for a person casually interested in finance. They are very nerdy in discussing his approach to investing, tools etc. and don't present any clear recipes. He had/probably still has a biggish public portfolio of stocks and seemed to base it on financial analysis applying the v…
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Important to rehash in political theater? No, it's not important.
Then where is the right place for that?
Within the SEC or at a performing arts center, depending on what level of scrutiny, the discussion of the topic is to be given. A congressional hearing is the equivalent of a discussion between a beat cop and hostile witness at a coffee shop.