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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

#661

Post by victor106 »

zarkov99 wrote: post #57

Sure. Robinhood got a call from someone very powerful in their circle, politely asking them to stop the amateur plebes from interfering with their professional market manipulation. We are taking about people commanding titanic amounts of capital and (indirect) regulatory power. Robinhood then had the choice, do we make enemies out of these people or do we just screw, er, I mean protect, our customers? Unburdened by a…

It didn’t make much sense to me yesterday when Chamath and others were saying the system was rigged against the small investors. It totally does today. These actions are nothing but The powerful signaling to the small investors whose turf they encroached on.

I just shutdown my Robinhood (they have the audacity to use that name while stealing from the poor) account

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

#662

Post by 015a »

sokoloff wrote: post #13
bradleyjg wrote: post #3

If they were just blocking margin trading or trades with unlimited risk that would be one thing. But this smacks of either paternalism or trying to manipulate the market. I hope they lose a lot of customers (or product depending on your POV).

It's absolutely paternalism, IMO. I'm less sure whether I think it's a good thing or not (because I think people buying new positions in GME at this point are unlikely to end up happy about that in mid-Feb.) I'm all for "let 'em play" in general but this is not going to end well for a lot of folks...

When Melvin Capital sold a metric ton of naked shorts on GameStop, no one was there to tell them it wouldn't end up well. It was certainly a risk, but not really a bad one going on fundamentals. They just failed to predict the mob mentality of retail investors.

Of course, those retail investors who got in on Thursday, Friday, or Monday; that seemed like a bad purchase. So bad that Melvin double-downed on their naked short position. There's no way the stock could go up. The fundamentals aren't there. But it did. A lot. And those retail investors made a ton of money.

So, we're at today, where you're saying that it would be a bad time to invest because it won't end well. You, and to some degree Robinhood, are making a prediction on the stock market. You may be right; you may be wrong; but you're definitely not certainly right or certainly wrong. You're making the same mistake anyone who tries to pick stocks does; you're just doing it in reverse.

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

#663

Post by darkwizard42 »

kgwgk wrote: post #631

https://twitter.com/AOC/status/1354833285386543105 "Committee investigators should examine any retail services freezing stock purchases [...] especially those allowing sales, but freezing purchases." Apparently she would prefer that people were blocked from selling their holdings.

No, I think she would prefer that exchanges didn't restrict purely in an effort to "protect" retail investors and nakedly do the bidding to protect larger institutional investors who are getting squeezed.

A brokerage NOT allowing buys, sells, margins, options on a security is well within their right to do so. It's only when they start to take positions that limit an investor's ability to manage their own risk that it gets a little fishy...

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

#664

Post by whywhywhywhy »

ClumsyPilot wrote: post #115

I am in Uk, and Trading 212 has not allowed any purchases since yesterday. Freetrade is the only platform that was still allowing trades. I thibk i will stick by them, despite them taking saubscribtuon payments

Had an AMC buy go through today on Freetrade too.

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

#665

Post by verganileonardo »

ehsankia wrote: post #642
Dem_Boys wrote: post #38

This whole Game Stop situation has made the power of the rich so obvious and disgusting. They temporarily shut down the market, banned the discord server, and are now preventing people from buying stocks on the most popular app used by small time investors. All of these moves hurt the small time investor trying to cash in on the next bitcoin-like bubble. This just creates more division, more disgust, and more of a cl…

Were the market shutdowns manual or automatic handbrakes? I know there are breaks when specific thresholds are hit that are pre-determined.

As far as I know, they were automatic handbrakes based on excessive volatility. A feature designed to prevent chaos and people from over buying/selling due to panic.

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

#666

Post by PartiallyTyped »

gmm1990 wrote: post #594
bradleyjg wrote: post #3

If they were just blocking margin trading or trades with unlimited risk that would be one thing. But this smacks of either paternalism or trying to manipulate the market. I hope they lose a lot of customers (or product depending on your POV).

I'm pretty happy they are doing it. This is really in the best interest of the average Robinhood user trying to buy GME right now. Maybe they shouldn't completely ban it, but there should be at least very extreme warnings about why its a terrible idea to buy.

It's not about making money, it's about sending a message, and we can send a message with our money. Not their business how we burn it.

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

#667

Post by JumpCrisscross »

marricks wrote: post #632
JumpCrisscross wrote: post #385

Earlier quoted context omitted.

> Can someone help me understand Robinhood's POV? Robinhood is a margin-lending options-trading broker. If a customer falls down on a trade, it is ultimately liable. If a retail customer loses money and makes a FINRA complaint that Robinhood induced them to buy through its gameified interface, it is liable. Risk and compliance likely made this call. Also, Robinhood makes its revenue from market makers. They are the c…

> What I can guarantee is nobody shorting GameStop got Robinhood to pull the plug. Not sure how you could possibly gaurantee that. Also given that Robinhood edit got a huge chunk of cash from a shorter makes that pretty weird to "guarantee"[1] [1] https://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%2... , https://news.ycombinator.com/item?id=25945258

> given that Robinhood got 40% of their revenue from a shorter

I'm seeing one tweet from Adam Hackney claiming this [1]. Do we have a real source?

[1] https://twitter.com/mindmeld_me/status/1354807424998281217

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

#668

Post by hntrader »

fairity wrote: post #654
amai wrote: post #611

"Robinhood got about 40% of their revenues from one of the hedge funds that just took a dive on Gamestop. Highly recommend an investigation. This smells like collusion to protect the rich insiders." https://twitter.com/mindmeld_me/status/1354807424998281217

Is there a source for the 40% figure? It seems to allude that the fund in question is Citadel.

Yeah it must be, they gave funds to Melvin Capital which took a beating on GME, and make money off Robinhood's customer flow.

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

#670

Post by ummonk »

wyldfire wrote: post #26

Can someone help me understand Robinhood's POV? This just seems so outrageous that there must be some sane rationale that I'm not seeing. Why do Robinhood, Reddit, Discord, etc feel like they have to respond to this? Whether the investments being made are responsible or not, it doesn't seem like it should be their place to intervene. If the hedge funds over-shorted GME and WSB recognized that and traded against that…

Their customers aren't their users - it's the institutions paying them for order flow.
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