General Investing and Economics Discussion - No Politics

[Lotta Booze]

 

[dtm1997]

 

[dtm1997]

Full disclosure: I intended to buy Dogecoin today because it's hilarious and 2 cents, but I couldn't because these crypto trading apps aren't licensed in NY State yet.

 

[Deleted member 2897]

I'd take this with a grain of salt, but why not.

If there’s probable cause, they find these communications. If this person had no evidence of this, they themselves should be prosecuted. There’s a lot of despicable behavior all around this story.

 

[CuseJacket]

 

[CuseJacket]

 

[CuseJacket]

My 18 year old daughter apparently has a Robinhood account. She tried to buy Nokia today and couldn’t. I didn’t even know Nokia was still in business. She doesn’t know anything about investing. She had no idea you have to pay taxes on all these transactions. LOL. These people are going to lose their ***.

So invest in Intuit (TurboTax)?

Pretty good chart regardless.

 

[dtm1997]

OMG! THE QUESTIONS!

 

[wrmathis]

 

[RonJohn]

Did anyone try to trade any of the affected stocks today? Does anyone know what the brokerage firms actually restricted? New coverage is extremely sloppy. Even news coverage of the market, which is usually simply factual. I have seen statements that firms restricted purchase of stocks, but then descriptions of those "restrictions" appear to be striciter margin requirements and restricting shorts. The descriptions or "purchasing" were limiting to closing, not allowing opening. I see it very different if the firms were restricting options, margin trading, and short selling on extremely volatile stocks. The firms could potentially not be able to collect margins and/or recover stocks if the stocks tank or increase exponentially. However, that is not the same as prohibiting purchase of stock.

 

[jpilgrim6]

Robinhood specifically prevented people from buying ~10 stocks on their platform. They did allow you to sell though. Which is important because Robinhood is where the majority of the people buying those 10 stocks did it.

By only allowing people to sell, the price can only go down. Which benefits the hedge funds that have shorts on the ~10 stocks that were affected. The hedge funds that are responsible for funding Robinhood....

And yes, I tried buying 2 of the stocks that were prevented

 

[CuseJacket]

Another doppelganger

 

[LibertyTurns]

If everyone is prevented from buying a specific stock, who do the sellers owning that specific stock sell to? This is fubar.

 

[dtm1997]

If everyone is prevented from buying a specific stock, who do the sellers owning that specific stock sell to? This is fubar.

To the hedge funds that are covering their short positions and have accounts with institutional brokers, not retail brokers.

 

[RonJohn]

If everyone is prevented from buying a specific stock, who do the sellers owning that specific stock sell to? This is fubar.

Like I said earlier, the reporting is not very good. Apparently from what @jpilgrim6 said, Robinhood prevented purchasing. From what I can gather, which isn't much, from reports some firms like TD Ameritrade restricted margin purchases, shorts, and options because they were concerned with the volatility of the stock. So from what I understand, someone with a TD Ameritrade account with cash holdings could purchase the stock if they wanted to. They were just prevented from using riskier types of purchases.

 

[RonJohn]

To the hedge funds that are covering their short positions and have accounts with institutional brokers, not retail brokers.

If those guys shorted at $17-$19 and didn't get out at around $40, I doubt they are getting out at $194. From a business perspective, GameStop isn't worth anything near $13 billion. Unless forced, at this point those hedge funds would probably be smarter to hold on until the current furor dies down.

 

[dtm1997]

If those guys shorted at $17-$19 and didn't get out at around $40, I doubt they are getting out at $194. From a business perspective, GameStop isn't worth anything near $13 billion. Unless forced, at this point those hedge funds would probably be smarter to hold on until the current furor dies down.

What if they had enough access to put their shorts back on when it went north of $200 or $300 or $400 and covered today below $200?

I'd take this with a grain of salt, but why not.

 

[RonJohn]

What if they had enough access to put their shorts back on when it went north of $200 or $300 or $400 and covered today below $200?

I think the whole thing is rife with misinformation. Even the actual financial news organizations are not doing a good job of actual reporting.

It appears that the people that started the run on Reddit made out like bandits. IF the hedge funds shorted again at $300 or $400, then they made out like bandits too. Some in both groups probably acted illegally. The people that followed the Reddit train lost, or are going to lose lots of money.

 

[Lotta Booze]

Did anyone try to trade any of the affected stocks today? Does anyone know what the brokerage firms actually restricted? New coverage is extremely sloppy. Even news coverage of the market, which is usually simply factual. I have seen statements that firms restricted purchase of stocks, but then descriptions of those "restrictions" appear to be striciter margin requirements and restricting shorts. The descriptions or "purchasing" were limiting to closing, not allowing opening. I see it very different if the firms were restricting options, margin trading, and short selling on extremely volatile stocks. The firms could potentially not be able to collect margins and/or recover stocks if the stocks tank or increase exponentially. However, that is not the same as prohibiting purchase of stock.

Below is what Robinhood showed this morning

I heard options trading were shut down earlier this week. I was able to pick up some shares through Fidelity though.

 

[dtm1997]

I think the whole thing is rife with misinformation. Even the actual financial news organizations are not doing a good job of actual reporting.

It appears that the people that started the run on Reddit made out like bandits. IF the hedge funds shorted again at $300 or $400, then they made out like bandits too. Some in both groups probably acted illegally. The people that followed the Reddit train lost, or are going to lose lots of money.

Who knows? I gave you a plausible example. Just enjoy the chaos.