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Roaring Kitty to testify on GameStop alongside hedge fund managers

reuters.com

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Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#191

Post by yskchu »

derangedHorse wrote: post #101
thefounder wrote: post #87

Earlier quoted context omitted.

So in the end it can be done when the right people make profit

Or rather because the trades could be done internally (Fidelity could sell off the stock they own) EDIT: It seems my assumption was incorrect. This link posted by grandmczeb shows that RH needed more capital by a downstream dependency to ensure those trades: https://archive.is/GFtf2

Actually you were right, Fidelity did sell off all the stock they owned.

https://www.wsj.com/articles/fidelity-cashes-in-most-of-game...

https://www.bloomberg.com/news/newsletters/2021-02-11/why-ga...

They owned 13% of the company; now they own only 87 shares; they sold 9.3 million shares in 1 month.

So, during the Robinhood GME debacle, Fidelity could sidestep the issue, since they wanted to sell their own GME shares anyway, and also managed to look good in the process (no GME buying restrictions compared to Robinhood etc); win win for them

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#192

Post by bsanr2 »

ivalm wrote: post #179
bsanr2 wrote: post #175

Earlier quoted context omitted.

My first contact with the stock market was learning about some stock that had ballooned 1200% and crashed the next day. This was in 1999 or 2000.

GME went up more than %10000 (100x) in 5 months. The geometric difference between GME and some 10x stock is the same as difference between 10x and no growth .

Weekly moves. GME, VW, and the one I'm talking about are all comparable in that sense.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#193

Post by ramblerman »

codecamper wrote: post #135

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…

> But then those same guys are allowed to trade options.

You act as if they are allowed to so symmetrically. I'm pretty sure they can only *buy* options, in which case there is no "extra" risk outside of what they paid up front.

Why would you hinder that from a false risk/margin perspective, if not but just to block the little guy.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#194

Post by sitzkrieg »

codecamper wrote: post #135

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…

options trading are already heavily tiered based on risk and exposure at every major retail brokerage

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#195

Post by puranjay »

estaseuropano wrote: post #64
puranjay wrote: post #45

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.

HN is about hacker news, there are various viewpoints. Not everyone has to believe in the long-disproven invisible hand. I think crypto is a dangerous destabilising factor. If not reigned in, it will come crashing down on all of us when it begins to destroy the public finances of (first) smaller countries and enables he usual suspects to evade all taxes, store value in non-localisable assets, etc.

Crypto is breaking the financial establishment and ruining Wall Street's never ending party. DeFi is bringing the same synthetic assets that Wall Street creates out of thin air to everyone. If you're not bullish on crypto, you haven't studied it closely enough.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#196

Post by puranjay »

javagram wrote: post #120
heidar wrote: post #70

Earlier quoted context omitted.

I’m not sure I follow. People/governments can use crypto and continue paying taxes, I don’t see the connection here.

One of the main features of crypto is that it enables tax evasion. No need to worry about carrying suitcases of cash, gold or jewels onto an airliner anymore and getting caught when you want to move money across a border without a recorded transaction. Supposedly that’s one reason it’s big in China since miners can generate coins to move wealth outside of the country more easily than moving their Chinese fiat.

People owning their own money outside of autocratic state control is now a bad thing?

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#197

Post by ivalm »

bsanr2 wrote: post #192
ivalm wrote: post #179

Earlier quoted context omitted.

GME went up more than %10000 (100x) in 5 months. The geometric difference between GME and some 10x stock is the same as difference between 10x and no growth .

Weekly moves. GME, VW, and the one I'm talking about are all comparable in that sense.

No, you’re wrong even in this narrow sense. GME had a weekly move from $61 to $483, or 8x. $VW went $201 to $1005 (actually split over two trading weeks, in a single trading week it was $324 to $1005). So between 3 and 5x. The weed stocks are even less.

But the thing is what makes GME an especially big risk is not any weekly move, it is the repeated weekly moves. It is the 100x growth in a stock that has essentially no chance of justifying its valuation. This was not the case with your other examples.

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#198

Post by perl4ever »

onedognight wrote: post #89
jimminy wrote: post #77

Earlier quoted context omitted.

> “The bottom line is that clients are still able to trade in GME, but we’ve put some restrictions on certain types of transactions in the interest of helping mitigate risk for our clients,” Schwab said Wednesday in a statement.[0] They very much did 3 weeks ago. Not to the same degree as the smaller brokerages, but they still put limitations on margin trading, and restrictions on options. [0] https://www.thinkadviso…

RH kept you from buying GME; Schwab did not. This is a huge difference.

I think people may be mislead because they are looking back at the published restrictions, but those don't reflect immediately prior, when things were going nuts and brokers, not just Robinhood, were doing stuff without notifying customers.

TDA is a subsidiary of Schwab and was blocking some purchases for some period of time during the week, before they put out a statement that said they "will not prevent clients from making basic buy and sell transactions".

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#199

Post by sumedh »

ivalm wrote: post #183
sumedh wrote: post #83

Earlier quoted context omitted.

> There is nothing surprising here. Then why disable buying and not selling, if things were volatile the exchange could have stepped in and stop the trading. There was really no reason for DTCC to increase the margin to 100%.

They disabled buying because they need to put up collateral on buys, not on sells (on sells you just pledge the shares you hold). They increased collateral because if a bunch of people buy and go bust by the time settlement time hits (because of GME price collapse) then dtcc would be on a huge hook.

> They increased collateral because if a bunch of people buy and go bust by the time settlement time hits

No that is not true, there are many people who have the money in the account to buy, the broker can lock that money so the question of buyer not paying does not arise.

So the hedge funds are free to do anything yet the little guy who has the money cannot even participate. Do you understand why people think its a rigged system?

Re: Roaring Kitty to testify on GameStop alongside hedge fund managers

#200

Post by sumedh »

Supermancho wrote: post #160
sumedh wrote: post #90

Earlier quoted context omitted.

Then where is the right place for that?

> Then where is the right place for that? (rehash in political theater) 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.

> Within the SEC

2008 should have demonstrated that SEC is virtually powerless to take on the big guys.

The purpose of a congressional hearing is to create awareness.

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