General > General Technical Chat
Gamestop: Reddit vs. Wall St.
<< < (5/14) > >>
DrG:

--- Quote from: TimNJ on January 29, 2021, 06:54:36 am ---
--- Quote from: DrG on January 29, 2021, 03:06:36 am ---I watched an interview with RobinHood's CEO tonight and still can not figure out exactly why they halted buying. A lot of "requirements" lingo but nothing particularly coherent to me. BTW, I have shirts older than that guy :)

Same with reading E*Trade's announcement. Buying is supposed to resume on Friday there.

I know that the exchange can halt trading of a stock under certain conditions like suspected fraud or or some imminent reveal, but these actions appear to be done by the brokerage houses. So what has happened in 1-2 days of no buying that has fixed everything?

--- End quote ---

This is the email I got from Robinhood. Do I know jack all about SEC regulations? ...No, no I do not, but my initial feeling from reading it was “Hmm, I think they intentionally threw in some big words that they know I don’t know about.”


--- Quote --- This was a temporary decision made to best continue serving you, and was not an easy one to make. We know it’s led to frustration and confusion, and wanted to provide some clarity.
As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.
To be clear, this decision was not made on the direction of any market maker we route to or other market participants.
--- End quote ---

--- End quote ---

Yeah, that's pretty much what he was sticking to - sounded to me like weasel words. The interviewer (Chris Cuomo) kept coming back to it and it sounded to me like... Q: "do you need more liquidity?", A: "no that's not it, it's <weasel words>" --> repeat until time is up. Instead of: The reason that we temporarily prevented buying of this stock is _______________. What we did to allow buying again is ______________.

When they don't do this, I am thinking that the shorts were covered...some how. But, maybe I am wrong. It does not seem to be an unreasonable expectation to receive a specific answer. AMC and a couple of others stocks were in the same boat.

Regardless, since these companies are in bad shape from the pandemic, it makes no sense that their fundamentals could support those prices. Like I said in my first post, someone is going to get burned.

It pisses people off that when the small investors, acting as a collective (presumably based on internet democratizing of information), squeezed a few hedge funds and the appearance is that the brokers have acted in the best interests of "big money" and not their "little" customers. Even if true, it does not mean it is illegal. Appearances are just that and they can be wrong, but to show that they are wrong we need to see some facts.
JohnnyMalaria:
The stock market is like Las Vegas. They will change the house rules when they realize the existing ones are no longer good enough to make sure only the big players win. e.g., the introduction of after-hours trading but only if you are important enough and delayed quotes etc.

It's glorified gambling. You'll lose.
TimNJ:
"Gambling in a suit" as one of my dad's Wall Street friends put it, back in the 80's.

I find it hilarious how tone deaf some of these brokerages are, especially in choice of words on how they explain things to the plebeians. If they just wrote sentences that didn't look like were reviewed by 17 people in a board room, with words hand selected from the corporate dictionary, I'd honestly probably believe them. And I'm not claiming that there's actual criminal wrongdoing by any brokerage, in this case. (I do not understand the system enough to know.) But, they do come off as rather slimy...but I guess we knew that already?

DrG:
Quite the ShitStorm going on.

Today's statement from the US SEC https://www.sec.gov/news/public-statement/joint-statement-market-volatility-2021-01-29

From the 3RD pph...

In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.

"Market participants should be careful to avoid such activity". - WTF? When are "Market participants" supposed to know "when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws" -  after the burn?

Do all those shorts still exist - yes or no? Holding those shorts costs money (my understanding is that they are not interest-free loans), covering those shorts right now costs a lot of money. Are there still shorts to the tune of 120% of the stock, as was put forth?
nctnico:

--- Quote from: DrG on January 29, 2021, 06:01:08 pm ---Quite the ShitStorm going on.

Today's statement from the US SEC https://www.sec.gov/news/public-statement/joint-statement-market-volatility-2021-01-29

From the 3RD pph...

In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.

"Market participants should be careful to avoid such activity". - WTF? When are "Market participants" supposed to know "when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws" -  after the burn?

Do all those shorts still exist - yes or no? Holding those shorts costs money (my understanding is that they are not interest-free loans), covering those shorts right now costs a lot of money. Are there still shorts to the tune of 120% of the stock, as was put forth?

--- End quote ---
I guess so. Selling short means selling shares you don't own (but rent from a party who does). If they want to 'unshort' then they have to buy the shares back at the current market price. If the shorters where clever they used stock options to guard them against the price rising too far though so someone else may need to cover the bill.
Navigation
Message Index
Next page
Previous page
There was an error while thanking
Thanking...

Go to full version
Powered by SMFPacks Advanced Attachments Uploader Mod