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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

#31

Post by MattGaiser »

stingraycharles wrote: post #15
pjc50 wrote: post #12

Earlier quoted context omitted.

The collateral requirement was imposed because of the incredibly high chance of the stock simply collapsing again. Trading halts in response to massive movements aren't unusual either.

Was a change in collateral requirement something that was known / codified in some agreement, or was it an ad-hoc decision?

> How a clearinghouse judges these risks, and therefore when it makes demands for more upfront funds, is typically formulaic. Margins can be based on equations such as value-at-risk. Exactly how the formula works, and who is responsible for losses in what order, are important elements. In the case of National Securities Clearing Corp., losses would be covered by the defaulting member’s funds before the clearinghouse’s own funds or other members’ funds would be used.

https://www.wsj.com/articles/how-clearing-demands-grounded-t...

WSJ says that it is formulaic.

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

#32

Post by chrisco255 »

sumedh wrote: post #13
dehrmann wrote: post #6

I realize this is just grandstanding by congress, but it feels like there are more important things to be working on right now.

> but it feels like there are more important things to be working on right now. Institutions abusing the system is not important?

It's quite laughable considering how much of Congress abuses the systems.

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

#33

Post by C19is20 »

dagmx wrote: post #17
tape_measure wrote: post #2

RoaringKitty is also known as DeepFuckingValue. This name is probably more well known to the general public, but Reuters does not mention it.

Outside of WSB memes, how well known is DFV as a monicker vs roaring kitty. To the regular person, both are not household names. To anyone who is really invested in the story, they'd know both. The very small niche of people who know one but not the other isn't worth Reuters having to include profanity (not that I object to profanity).

Assterisks for the pudes- D*pFuckingV*lue works.

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

#34

Post by chrisco255 »

ivalm wrote: post #18
emteycz wrote: post #8

Why is the central offender - Depository Trust & Clearing Corporation - not going to be there?

Because there were no offenders. DTCC raising collateral requirements on an ultravoltile stock with a high chance of price collapse is just... a reasonable thing to do?

Do they have a prepublished volatility-collateral chart that applies for this and all similar scenarios or was this an adhoc rule change made arbitrarily this one time? Can you show another volatile time where similar action was taken?

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

#35

Post by [deleted] »

C19is20 wrote: post #33
dagmx wrote: post #17

Earlier quoted context omitted.

Outside of WSB memes, how well known is DFV as a monicker vs roaring kitty. To the regular person, both are not household names. To anyone who is really invested in the story, they'd know both. The very small niche of people who know one but not the other isn't worth Reuters having to include profanity (not that I object to profanity).

Assterisks for the pudes- D*pFuckingV*lue works.

[deleted]

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

#36

Post by voiper1 »

csours wrote: post #25
sillysaurusx wrote: post #10

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…

If they required 100% collateral, why did that mean Robinhood stopped trades? Why couldn't they allow trades with 100% settled funds?

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

#37

Post by 1f60c »

dagmx wrote: post #17
tape_measure wrote: post #2

RoaringKitty is also known as DeepFuckingValue. This name is probably more well known to the general public, but Reuters does not mention it.

Outside of WSB memes, how well known is DFV as a monicker vs roaring kitty. To the regular person, both are not household names. To anyone who is really invested in the story, they'd know both. The very small niche of people who know one but not the other isn't worth Reuters having to include profanity (not that I object to profanity).

I had heard about DFV but not Roaring Kitty.

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

#39

Post by DavidSJ »

voiper1 wrote: post #36
csours wrote: post #25

Earlier quoted context omitted.

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?

I think the requirements were calculated at the brokerage level and not the individual customer level.

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

#40

Post by jimminy »

katbyte wrote: post #23
pjc50 wrote: post #12

Earlier quoted context omitted.

The collateral requirement was imposed because of the incredibly high chance of the stock simply collapsing again. Trading halts in response to massive movements aren't unusual either.

I've only been sorta paying attention so i could be wrong but trades were not suspended or halted? only buying was prevented, and only for some brokerages?

> Only buying was prevented, and only for some brokerages?

The first part of that has been a common bit of misinformation. Opening new positions (either by attempting to buy shares of the stock, or entering into a new short position) is what was prevented. Closing positions (selling for owners of shares, or in the case of short obligations buying shares) was still allowed as closing reduces credit risk for the broker.

The brokerages that did restrict, were smaller firms and did so to maintain liquidity for all assets, instead of allowing a vast amount of their capital to be consolidated largely into a few assets, due to the increased capital cost of clearing.

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