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Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

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Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#461

Post by joncrane »

djrogers wrote: post #446
EGreg wrote: post #435

Earlier quoted context omitted.

Hey, crowd, you are not allowed to buy up the stock like that! Someone is gonna get hurt on the way down! “Here let us help you” — closes down exchanges, panic sell — “isn’t that all better?” People with their money stuck and unable to cash out... so much better eh? I smell a huge class action lawsuit

Well, to be fair - they are at least allowing sales, just not purchases.

How convenient that people are now "allowed" to close their positions, now that the number of counterparties to that trade is dramatically reduced...

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#462

Post by jaywalk »

tiahura wrote: post #381
rvz wrote: post #172

Earlier quoted context omitted.

Yes. You can now see the true extent of their tricks and possible ways of shaking the WSB traders. Obviously these large guys are using their influence and connections to drive FUD, lies and fake news to frame their enemy / target (/r/WSB) to give in and sell. Even the stock brokers are in on it. All of this to protect the losses of the irresponsible and the greediest of hedge-funds and short-sellers. Best part? They…

Am I the only one who see's parallels between the above paranoia and "the election was stolen and they're not even hiding it?"

In order for it to be paranoia, it has to be irrational. So I'd say you're the only one who even sees it as paranoia in the first place. Because the evidence that it's happening is literally right in front of your face.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#464

Post by IG_Semmelweiss »

rory wrote: post #134
metalliqaz wrote: post #52

Earlier quoted context omitted.

Robinhood allows free trades. With all the new customers loging in and just buying a few stocks, they have to acquire lots of new shares. When this is all over, a lot of retail investors are going to be left holding the bag, and will likely not be continuing customers.

Are buyers of these stocks really exposed to more downside risk than the buyers of the way OTM options they sell to retail investors freely?

Only those that got in late and then chose to sell at a lower price than cost.

However, and here is the problem - when the price does come down (likely after the shorts capitulate) , it will literally be a stampede to finally get out. It is unknown how sell orders will be processed... if at all at that point. So the later you get in the more likely you are to be burned, in the disordely unwinding scenario.

Early adopters will be ok. Holders and latecomers will not.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#465

Post by Traster »

CivBase wrote: post #276
tim333 wrote: post #158

Earlier quoted context omitted.

From Schawb “It is not uncommon for us to place restrictions on some transactions in certain securities in the interest of helping mitigate risk for our clients,” from Massachusetts secretary of the commonwealth “It is very clear to anyone looking at the numbers that the whole marketplace is being manipulated here,” he said. I imagine Robinhood's thinking is similar

> "It is very clear to anyone looking at the numbers that the whole marketplace is being manipulated here" I don't get this. I didn't know anything about short selling a few days ago and maybe now is a bad time to learn... but my understanding is that short selling is only legal because it disincentivizes bubbles caused by artificial overestimation of a company. Investors took it too far and short sold over 100% of t…

I'm not an expert but it seems to me that this whole 100% thing is a total red herring. If I (A) have 50 shares in GME, I let you (B) borrow them and short sell them to person (C), person (C) now owns them, you (B) can borrow them from person (C) and short sell them to person (D). Suddenly you've short sold the same stock twice.The only issue for you is that you now need to buy back 100 stock to pay off what you've borrowed, which you could do buying the stock from person (D), giving it back to person (C), buying them frmo person (C) and giving it back to person (A).

The only issue comes if someone notices that you've done this, pushes the price up to the point where you have to exit your position because your broker won't let you hold this short position that you can't afford to pay for. At that point you must exit, which drives the price up even further because you're creating demand for the stock.

What's important to notice about this is that the second you're no longer short the stock, no one has any incentive to hold the stock. So it'll return to $20 and all those super smart boys on WSB who were holding out for $2000 have thousands of shares of a worthless retail stock that they probably bought on margin and are going to lose everything.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#466

Post by MrMan »

esyir wrote: post #406
TheRealDunkirk wrote: post #87

Earlier quoted context omitted.

> the powers that rule USA don't realize that soon the only tool left to common people is violence? What's even more concerning to me is that, to platforms looking for an excuse, your comment could be painted as trying to "incite" violence, and used as a justification to ban you.

Private platforms, can't do shit about them, yada yada yada. That's bullshit. The principle, and thus the the right to free speech is the fundamental value of a free country. Hiding behind the "they're a private company, they can do what they want" is nonsense when the vast majority of communication flows through them. I'm wondering though what happens if section 230 was modified to only allow for filtering and remov…

Pump and dump schemes being regulated being framed as a free speech issue? I don't know if it is productive to make this about free speech. The purpose of life isn't just to emit speech, and indeed the purpose of WSB is for people to exhort other people to action and that action is to buy and sell certain stocks, so that a subset of participants can profit and other people lose their capital. "Speech" is not the central issue or the most interesting one to me about this case, it is rather more interesting to see how mobs can be formed and influenced to take action.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#469

Post by alexggordon »

snowwrestler wrote: post #36

Brokers are worried about their legal exposure at this point. They could face lawsuits from investors in Melvin and other hedge funds, who will allege that the brokers knew they were facilitating intentional financial harm. It doesn’t matter if these are likely to fail; they are expensive lawsuits to defend against and therefore may result in settlements. And they could face class action litigation from trial lawyers…

"Intentional financial harm" is not illegal, otherwise shorting stocks would be illegal. There is also no court precedence for normal market maneuvers that happen to have a significantly negative outlook on a company. Imagine if Gamestop sued TD Ameritrade for facilitating short market orders for Goldman Sachs? It would be a joke. Same thing for if Melvin sues--they over exposed themselves and paid for it.

There's nothing here that's illegal. Insider Trading, Pump and dump schemes, etc all require coordinated distribution or communication of false and/or non-public information. What's happening with GME is happening in the public, in full view of everyone, with a goal of exploiting a hedge fund that overexposed itself through a short squeeze. Short squeezes are legal, and have a large storied history over the last couple decades.

Re: Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

#470

Post by georgeecollins »

bko wrote: post #136
speeder wrote: post #9

This sort of stuff will put people more and more on edge, there is the deplatforming going on, people asserted their power financially, and now getting that removed too, the powers that rule USA don't realize that soon the only tool left to common people is violence? Even more with some irresponsible newspapers blaming the whole thing on GamerGate and Alt-Right, effectively pushing away people that previously could b…

> the powers that rule USA don't realize that soon the only tool left to common people is violence? Do you honestly believe this? Somehow we'll go from not being able to buy certain stocks to violence? Banning collecting rain water on your own property didn't do it. Abject failure of politicians keeping drinking water clean didn't do it? Not being able to buy cheese from unpasteurized milk didn't do it. Can't grow a…

>> Let's be real. This is small potatoes.

Agree. It is not like there aren't half a dozen apps that let you trade stocks commission free on your phone. Some may require you to have $500-$1k to invest, but seriously if you don't have that you should invest in a different way then treading individual stocks.

That said, I have no idea why Robin Hood should ban the trading of GME and I wish they wouldn't.

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