Statement of SEC Regarding Recent Market Volatility • Hacker News Board

Re: Statement of SEC Regarding Recent Market Volatility

#691

Post by sanderjd » Fri, Jan 29, 2021, 7:21 PM UTC

NoOneNew wrote: post #388

sanderjd wrote: post #368

Earlier quoted context omitted.

Here's what oh-so-many people are missing: the gigantic volume in these stocks is no longer coming from the WSB YOLO bros who know they'll lose money but think that's worth it to stick it to hedge funds. That may well be who was getting into the stock on Monday and Tuesday. But now it is people who saw the story on Good Morning America, having never previously heard of WSB or Robinhood, who don't care about hedge fun…

So it's WSB fault that the news outlets spun the narrative to confuse people? Sorry, but hasn't the news spinning and generally misconstruing news stories to the benefit of their advertisers and financiers agendas been the issue the past few years?

What about my comment seems to say that it is WSB's fault? I didn't comment on whose fault it is and I don't care, I just think pretty much everyone is acting like the only two parties involved are WSB memers and hedge funds. And maybe that was true for awhile. But it isn't now, there are lots of unsophisticated people who have bought into the frenzy and in a few months all the stories will be about how those people got screwed. Meanwhile, both the WSB folks and the hedge funds will be doing just fine.

Re: Statement of SEC Regarding Recent Market Volatility

#692

Post by dlubarov » Fri, Jan 29, 2021, 7:21 PM UTC

alexpotato wrote: post #303

klodolph wrote: post #245

Earlier quoted context omitted.

> 3. Too busy to use the very internet which some of them probably helped build to magically render learning materials to the screen in front of them at zero marginal cost. I will say that I’m not too busy for this at the moment, and getting to my very basic level of understanding has required me to sort through, at the very least, a fairly decent chunk of reference material and reading interpretations and explanatio…

So maybe I can help a little with the above: - prior the 1980s, when you bought a stock a physical stock certificate was passed back and forth between your broker and the broker selling the stock - as you can imagine, as trading volumes increased this became unmanageable. In fact, at one point, the exchanges would close every Wednesday just to give people time to catch up on all of the exchange of certificates - ever…

Thanks for the background info. Why can't the database be updated ~instantly though? Is it just because of legacy systems that handle settlement in periodic (daily?) batches?

Also, couldn't a broker eliminate this risk by just making assets "unavailable to trade" until they've been settled? Granted, I understand why brokers wouldn't want to do that under normal circumstances, but it seems like something they should be able to enable when liquidity becomes a problem.

To me, "Your cash can't be spent yet because the TSLA sale you just made hasn't settled" would seem a lot more understandable than "We're halting GME purchases".

Re: Statement of SEC Regarding Recent Market Volatility

#693

Post by Chris2048 » Fri, Jan 29, 2021, 7:21 PM UTC

btilly wrote: post #594

Chris2048 wrote: post #450

Earlier quoted context omitted.

> I remember the smugness with which Stephen Wolfram is routinely dismissed from having non-consensus views of physics The guy is disliked for taking too much credit for things, not for "having non-consensus views" - which is sort of the opposite problem.

He is disliked for different things by different people. See https://www.scientificamerican.com/article/physicists-critic... for scientists dismissing his theories of physics.

Maybe, but I was talking about ppl on HN

Re: Statement of SEC Regarding Recent Market Volatility

#694

Post by sanderjd » Fri, Jan 29, 2021, 7:22 PM UTC

whatshisface wrote: post #394

sanderjd wrote: post #368

Earlier quoted context omitted.

Here's what oh-so-many people are missing: the gigantic volume in these stocks is no longer coming from the WSB YOLO bros who know they'll lose money but think that's worth it to stick it to hedge funds. That may well be who was getting into the stock on Monday and Tuesday. But now it is people who saw the story on Good Morning America, having never previously heard of WSB or Robinhood, who don't care about hedge fun…

That's quite plausible, but where could we look to see if that was true?

The volume in the stock since this became the big news on Wednesday, and the performance of the Robinhood app in app stores.

Re: Statement of SEC Regarding Recent Market Volatility

#695

Post by sanderjd » Fri, Jan 29, 2021, 7:22 PM UTC

dzmien wrote: post #555

sanderjd wrote: post #368

Earlier quoted context omitted.

Here's what oh-so-many people are missing: the gigantic volume in these stocks is no longer coming from the WSB YOLO bros who know they'll lose money but think that's worth it to stick it to hedge funds. That may well be who was getting into the stock on Monday and Tuesday. But now it is people who saw the story on Good Morning America, having never previously heard of WSB or Robinhood, who don't care about hedge fun…

When you discover something like this on a nationally syndicated talk show, it is probably too late for you to get in on the action.

Yes exactly, but many people who discover things like this in mainstream media don't know that.

Re: Statement of SEC Regarding Recent Market Volatility

#696

Post by abakker » Fri, Jan 29, 2021, 7:24 PM UTC

novok wrote: post #664

mumblemumble wrote: post #601

Earlier quoted context omitted.

Point #3 doesn't seem consistent with the idea that this is just a "stay in your lane" attitude. "Lurk before you leap" might be a better phrase. You've got to do at least a little homework before you can understand a technical topic well enough to make sense of what you're reading. I am less familiar with finance, but I see this all the time when HN discusses legal matters. The conversation is almost pure noise, bec…

Or to quote another software saying, RTFM

Truly a motto to live by.

Re: Statement of SEC Regarding Recent Market Volatility

#697

Post by stjohnswarts » Fri, Jan 29, 2021, 7:26 PM UTC

josephorjoe wrote: post #144

malwarebytess wrote: post #119

Earlier quoted context omitted.

Robinhood says that they basically couldn't fulfil the buy orders because they ran out of money, or couldn't fulfil the orders without breaking the rest of the platform. I imagine whatever the reason there's going to be lawsuits.

Whatever else happens, Robinhood should not survive this. They clearly violated their customers' trust, so their customers should leave them. And I will be completely unsurprised if when the dust settles it turns out they acted illegally. Also, they suck at lying.

I don't agree. I think they provide a valuable service they should stay whole IF they can fix their capital issue and make their customers whole. You didn't forsee what was happening and neither did I because it was unprecedented. If not let them sink, someone will provide a similar service and learn from it. The SEC shouldn't be in the market of shutting down companies because a new phenomenon happened, let the market do that, unless something illegal has occurred.

Re: Statement of SEC Regarding Recent Market Volatility

#698

Post by sanderjd » Fri, Jan 29, 2021, 7:27 PM UTC

ummonk wrote: post #688

PaulDavisThe1st wrote: post #475

Earlier quoted context omitted.

... not to mention the few smarter hedge funds and mutual funds that quickly jumped in an out of this and made substantial gains, leaving everyone who thinks they are "holding the line" even more "on the line".

Ehh, the short ratio is still over 100%, and I guarantee you those aren't retail investors. So plenty of institutional investments to stick it to left.

You don't know when those shorts got in. The price is clearly too high now, so it makes sense that sophisticated investors (probably other hedge funds) would be entering short positions at the recent prices. And those recent entrants will not be squeezed unless the price goes up by another ludicrous amount, which it is less likely to do now that the initial surge of enthusiasm is running its course. So lots of retail traders who got into the frenzy late with normal stock purchases at these absurd prices will get screwed during the inevitable crash, while the recent shorters will make a killing.

Re: Statement of SEC Regarding Recent Market Volatility

#699

Post by mlthoughts2018 » Fri, Jan 29, 2021, 7:28 PM UTC

mgleason_3 wrote: post #670

dudeinjapan wrote: post #627

Earlier quoted context omitted.

Maybe not apples-to-apples, but... I worked on Lehman's Tokyo electronic trading desk in 2008. When we went bankrupt, it wasn't our clients, or even the exchanges which stopped our trading. It was our clearing banks. Interestingly, we weren't cutoff uniformly in all markets. NY desk was trading about 75% of regular volume for 4 days into the bankruptcy before someone (SEC?) told them to knock it off. There's a lot go…

“I’m as pissed as anyone that they shut off trading,” Robinhood did not halt trading or shut off trading. Robinhood prevented _buying_ Gamestop and only allowed selling. That’s entirely different. It can only do one thing - drive the price down which is market manipulation. It’s supposed to be illegal.

They did halt both buying and selling of net new positions. They did not halt adjustments of existing positions (calls & shorts).

This was actually a very fair, by-the-books standard trading halt. It just happened to benefit the short sellers who had been squeezed because they could easily find people willing to sell.

You definitely could still buy GME if you found some extremely random call option holder who needed to sell to cover their position. This would not be changing a net new position, just like selling to someone looking to cover a previous short, and this was never blocked - it’s just there was no volume for this, nobody owned calls and needed to sell.

Re: Statement of SEC Regarding Recent Market Volatility

#700

Post by twblalock » Fri, Jan 29, 2021, 7:28 PM UTC

mancerayder wrote: post #649

twblalock wrote: post #426

Earlier quoted context omitted.

The flood of articles about this topic hitting the front page, and the flood of comments on those articles full of conspiratorial thinking, have been surprising. Even during the election, the controversy following the election, and the Capitol riot, the front page didn't get taken over by a flood of articles. Something is different this time. It was not good. I hope it won't happen again. The moderators on this site…

Your criteria for moderating/censorship is that the post suggests a conspiracy? Are you not worried the scope might be wider than intended and the net cast snag ideas tagged as conspiracies that aren't or are later discovered to not be? Or is the criteria that it's a negative and implicates mainstream institutions? I'm asking an honest question in good faith because I'm nervous at people conflating fringe ideas and e…

There were quite a few stories about this on the front page (many of which were duplicates), and a frenzy of posters positing conspiracy theories in the comments to those posts -- stuff like accusing Robin Hood of being paid off by hedge funds, general conspiracies about market manipulation and rigging, and trolls posting WSB-style content.

If I want to see a flood of fake news and conspiracy theories there are plenty of other places to go. HN is not supposed to be the kind of site where that happens. Somehow the norms that prevented that from happening before on this site, even during times of extreme political controversy, have been broken.