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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

#961

Post by devoutsalsa »

sltkr wrote: post #330
rswail wrote: post #159

As I understand it, the hedge funds had naked shorts. That's illegal. If they did, what is happening to them serves them right. Even if they didn't, a "short squeeze" is perfectly legal. If the short sellers think the stock is overpriced, and there's others that think its underpriced, then both sides are placing their bets and will deal with the result, either by making or losing a lot of money. This is not a "pump a…

> If the short sellers think the stock is overpriced, and there's others that think its underpriced, then both sides are placing their bets and will deal with the result, either by making or losing a lot of money. I don't think it's really a case of people disagreeing on the real value of GameStop stock. Framing it like this ignores important facts. This stock was trading around $4 in August, around $20 in the beginn…

A stock is worth what people will pay for it. That’s it. Sure, there are models you can use to come up with a seemingly reasonable valuation, but that’s just a tool you use to make a wild ass guess.

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

#962

Post by randmeerkat »

gorgoiler wrote: post #374

WSB reminds me of the heyday of LulzSec. As questionable as LulzSec / anon’s hacking was, it was also exciting to watch in real-time (10 years ago!) Of course they were caught and of course they turned out to be regular nobodies. Everything is normal and banal in the end. If WSB doesn’t turn out to be a regular ole pump and dump then I’d be very surprised. The only thing that’s weird about it is that not even the cur…

Now that’s a name I haven’t heard in a long time.

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

#963

Post by FabHK »

Can someone clarify whether RH blocks margin purchases (in other words, just refuses to lend people money to purchase those stocks), or blocks outright cash purchases?

The former would be entirely understandable and justifiable, the latter not so much.

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

#964

Post by hntrader »

devoutsalsa wrote: post #961
sltkr wrote: post #330

Earlier quoted context omitted.

> If the short sellers think the stock is overpriced, and there's others that think its underpriced, then both sides are placing their bets and will deal with the result, either by making or losing a lot of money. I don't think it's really a case of people disagreeing on the real value of GameStop stock. Framing it like this ignores important facts. This stock was trading around $4 in August, around $20 in the beginn…

A stock is worth what people will pay for it. That’s it. Sure, there are models you can use to come up with a seemingly reasonable valuation, but that’s just a tool you use to make a wild ass guess.

Exactly. I think gold is worthless because it's just a lump of metal that doesn't do anything useful. But apparently there's enough people that like shiny metal and therefore it's worth a lot. GME might just be an aesthetic purchase more than anything.

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

#965

Post by FabHK »

015a wrote: post #662
sokoloff wrote: post #13

Earlier quoted context omitted.

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…

> And those retail investors made a ton of money.

A few that got in early and have liquidated their position made a ton of money.

Those HODLers? They might have paper profits now, but long term not so sure.

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

#966

Post by FabHK »

FabHK wrote: post #963

Can someone clarify whether RH blocks margin purchases (in other words, just refuses to lend people money to purchase those stocks), or blocks outright cash purchases? The former would be entirely understandable and justifiable, the latter not so much.

Lol, seems to be a general restriction on buying. Wow.

https://blog.robinhood.com/news/2021/1/28/keeping-customers-...

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

#967

Post by jacobsenscott »

There are a handful on people on wsb manipulating a lot of people into buying worthless stock from each other, often on margin. It is such a classic con. I can't believe people are mad at RH for helping them not get conned.

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

#968

Post by gmethowaway »

MrMan wrote: post #633
rvnx wrote: post #7

Interactive Brokers now blocking purchase call and put options (even to institutional investors!) on $GME, you can only close a position. On the other side, Robinhood is asking for account to be funded with cash to execute the calls at expiration, or else they will liquidate your position :|

this is a risk management move for RH, nothing else

If it's just risk management, why IB doesn't allow to buy 1 GME stock on non margin account?

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

#969

Post by leonroy »

Schweigi wrote: post #53
rvnx wrote: post #7

Interactive Brokers now blocking purchase call and put options (even to institutional investors!) on $GME, you can only close a position. On the other side, Robinhood is asking for account to be funded with cash to execute the calls at expiration, or else they will liquidate your position :|

I just tested it with IBKR and was able to create a call buy order (exp 1/29, $500 strike) for a single contract. Info: Market was closed so the order wasn’t executed but it was accepted by the order system before i cancelled it.

Tested IBKR today - I was able to place a simple Limit order for GME stock which was good till close but when I refreshed to view my list of orders it shows as Cancelled.

Tried it twice, did the same thing each time.

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

#970

Post by f430 »

So the HF strategy is now to:

1. stop hemmorage

2. lose their edge in market (buying order flow from RH)

3. go to court & hopefully settle for less than their AUM.

All in all, this seems like a desperate move. Every securities lawyer is celebrating right now because they have a home run case.

Either way, Citadel is screwed but the HF managers probably decided its better to call it a day at -30% than over -100%.

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