WallStreetBets vs WallStreet: It's not about the money anymore • Hacker News Board

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#421

Post by paulddraper » Thu, Jan 28, 2021, 4:29 PM UTC

kibwen wrote: post #413

paulddraper wrote: post #259

Earlier quoted context omitted.

They're so disconnected that losing billions doesn't matter? The problem is bigger than originally conceived then.

Its nice that more people are coming to this realization, though I'll admit that it's a bit funny that this, of all events, is what's making people realize that extreme wealth disparity is a problem. The existence of billionaires isn't even good for the free market, let alone free society. In order for a market to be rational, the threat of losing money has to actually mean something, which it doesn't for the ultra-r…

Eh. The problem isn't that billions or billionaires exist at all. I see no issue with that.

The problem is systems that resist merit. You make terrible investment decisions with the portfolio but it doesn't matter? (I think it will matter FWIW.)

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#422

Post by ryanmercer » Thu, Jan 28, 2021, 4:30 PM UTC

The whole thing is incredibly annoying.

I'm a moderator of /r/silverbugs and we've been getting slammed all morning with either accounts from either /r/wallstreetbets or accounts trying to make them look bad, with dozens of brand spanking new or barely used accounts spamming to buy various silver related stocks/funds.

I've banned more accounts this morning than I have in 2 years and, it really does appear that they are starting to have some impact on the price of silver with their attempts to pump stuff like SLV.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#423

Post by [deleted] » Thu, Jan 28, 2021, 4:35 PM UTC

boringg wrote: post #201

rcxdude wrote: post #82

Earlier quoted context omitted.

And perhaps money found a new weapon in populist anger.

I just hope it doesn't get co-opted by the "alt-right" or other political groups. Also get ready for the 100+ opinion pieces on every media platform about this so everyone can get their ad dollars.

[deleted]

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#424

Post by 52-6F-62 » Thu, Jan 28, 2021, 4:37 PM UTC

function_seven wrote: post #416

52-6F-62 wrote: post #400

Earlier quoted context omitted.

I'm saying the oil is not labelled 10-40W, but is actually 2-cycle motor oil and they put it in their car anyway. I'm an outsider, but that's how this appears to me. They weren't lied to, they misjudged—and mainly because of a lack of understanding. Traditionally, acting without understanding but still a high degree of confidence was called hubris. And it appears the institutional traders expressed hubris when they o…

That's more reasonable. However, the lawnmower or the Tercel are machines that have inherent limitations. RH's decision here isn't an inherent limitation of their platform. It's an active decision they made. One they did not have to. Also, what RH has done isn't harming just their own customers, but the entire market. People using Questrade or E-trade are finding that they have fewer buyers for their shares. If RH is…

I think you've got a point there, if I'm reading you correctly:

If Robinhood (et al—sorry RH you're the de facto stand-in now) can't meet the standard of keeping up with the ... other cars in the race... then they shouldn't be allowed to enter. In that case, the analogy helps since most races have minimum qualifier rounds before you're allowed to enter.

I've got no arguments there. But that's the kind of thing RH [et al] were founded to confront or change, wasn't it? Or were they just circumventing previous regulation about market interfaces? This is where we get into the weeds and me out of my depth.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#425

Post by nfriedly » Thu, Jan 28, 2021, 4:40 PM UTC

Traster wrote: post #369

nfriedly wrote: post #66

Earlier quoted context omitted.

Institutional investors were betting that GameStop (GME)'s stock price would fall, redditors were betting that it would rise. So far the redditors are winning. Early on, the bets had some basis in reality, but now it's become more of a speculation game. Yesterday, two of the big institutional investors decided to fold, effectively loosing 100% of their investments. Edit: or, potentially more. The same thing has start…

>Yesterday, two of the big institutional investors decided to fold, effectively loosing 100% of their investments. They can lose much more than the total value they initially invested into the shorts, since they have to buy back at several multiples of the price of the stock at the point they bought and they had heavy borrow costs too. That's why the hedge funds are at risk of going bankrupt - because they aren't onl…

You're correct.

The 100% number came from a video that someone at Citron Capital posted. I can't find the actual video, but it's quoted at https://www.bloomberg.com/news/articles/2021-01-27/melvin-ca...

However, I'm not sure about Melvin - they may well have lost more than 100%.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#426

Post by arcturus17 » Thu, Jan 28, 2021, 4:42 PM UTC

isatty wrote: post #272

arcturus17 wrote: post #233

Earlier quoted context omitted.

It is mostly about the money, but it is also very much about memes, chicken tenders and fucking with the establishment. What these journalists got wrong or are lying about is wsb being mainly an anti-establishment movement.

Sorry, no. Memes and chicken tenders, sure, but WSB doesn’t push any agenda. Pro or against. Stop misguiding people.

We must not be reading the same subreddit then. There are many, many references of fucking with people or "sticking it to the man", and there have been for years.

Whether that constitutes "pushing an agenda" (your words, not mine) is up for debate. For example, do political anarchists "push an agenda"? Maybe not, maybe that's an oxymoron in a sense (the agenda is that there's no agenda) - but they are certainly "anti-establishment" (my words).

What makes you an authority on wsb or on anything else to be able to mandate that I "stop misguiding people", anyway?

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#427

Post by dcolkitt » Thu, Jan 28, 2021, 4:42 PM UTC

chollida1 wrote: post #403

dcolkitt wrote: post #366

Earlier quoted context omitted.

GME has been trading at $2 spreads. SPY trades at $0.01 spreads.

Fully aware I’m in the industry. I stand by what I said:) You said something that was flagrantly wrong, I’m just trying to help correct you.

I’m in the industry too.

Average PnL per share traded for a firm doing okay is about $0.001. A decent size firm might do 4% of ADV. Tape A trades about 1.5 billion shares per day. That’s 21 million annual trading revenue.

GME traded 1 billion shares in the past week. PnL per share has been averaging close to $0.40. At 6% ADV (HFT market share spikes during volatile periods), that’s 24 million in revenue.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#428

Post by arcturus17 » Thu, Jan 28, 2021, 4:43 PM UTC

function_seven wrote: post #271

arcturus17 wrote: post #171

Earlier quoted context omitted.

Should, as in ethically? Surely not legally.

I say legally. A broker-dealer should be required to either give advanced notice of a suspension like this, or have a clearly upfront volatility metric that triggers it. (No, a TOS statement like, "We reserve the right to suspend trading at our discretion " is not a clear rule. It's a weasel clause) Users would then know, in advance, if a particular ticker will be restricted. Either through specific advanced notice,…

Again, is this based on any real legal foundations, or on what you think the law should be?

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#429

Post by function_seven » Thu, Jan 28, 2021, 4:48 PM UTC

arcturus17 wrote: post #428

function_seven wrote: post #271

Earlier quoted context omitted.

I say legally. A broker-dealer should be required to either give advanced notice of a suspension like this, or have a clearly upfront volatility metric that triggers it. (No, a TOS statement like, "We reserve the right to suspend trading at our discretion " is not a clear rule. It's a weasel clause) Users would then know, in advance, if a particular ticker will be restricted. Either through specific advanced notice,…

Again, is this based on any real legal foundations, or on what you think the law should be?

What I think the law should be. I'm not qualified to say if there is a legal violation here (whether criminal, regulatory, or civil).

I said in another comment that my thoughts on this are in the "ought" category, not the "is" one.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#430

Post by bvirb » Thu, Jan 28, 2021, 4:49 PM UTC

snowwrestler wrote: post #326

dahdum wrote: post #118

Earlier quoted context omitted.

In this case people buying stock weren't hoping on a greater fool to sell it to later. By a large margin, more shares were sold short by a handful of hedge funds than even exist. As the price rises the expectation was/is they are forced to buy back to cover at any price . It's entirely possible a majority of retail investors make a killing and a few large funds get liquidated. At least it was until the coordinated ac…

These two thoughts are incompatible: - “We’re going to put these hedge funds into bankruptcy” - “These hedge funds will buy all our stocks at inflated prices” If the hedge funds can buy all the stock, they’re not at risk of going bankrupt. And if they are at risk of going bankrupt, they can’t buy all the stock at inflated prices. A lot of retail investors are going to lose money when this bubble pops. /r/wsb has not…

Interestingly I think they're not entirely incompatible. If the funds can't cover their positions they will attempt to get money from somewhere. This could be loans or selling ownership of the fund, probably to other funds as it looks like has already happened with some. Effectively being forced to put more money in.

Fundamentally the funds made an extremely risky bet and the market is (or was at one point) seemingly reasonably and expectedly betting against it with a short squeeze. The new part is the social hype driving the squeeze via an army of retail investors.

Agree some retail investors are inevitably going to be left with a net loss here, which will suck. But it was (and may still be) a reasonable play when viewing the market as a gambling platform (which the funds were doing by over-shorting).

My hope is that the people claiming to be cashing out their 401k on GME are partaking in anonymous internet hyperbole to fuel the hype and the vast majority are gambling with a few bucks they can afford to gamble with because they can't do anything else right now.