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mfb
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For once I mimicked the posts you made regularly (mainly to show you how they look when they don't come from yourself), and suddenly I'm in attack mode?Vanadium 50 said:
For once I mimicked the posts you made regularly (mainly to show you how they look when they don't come from yourself), and suddenly I'm in attack mode?Vanadium 50 said:Why are you in attack mode? And why have you been in this mode all wek?
russ_watters said:You give them that much credit? Hmm, I guess its possible...
russ_watters said:Doesn't that also protect individual investors from themselves?
russ_watters said:The redditors believed the hedge funds were engaging in a coordinated attack against a company they liked, and that made it "bad". They were defending GME and that makes them "good".
[edit; missed it] You're saying they did it primarily to "steal" money from the hedge funds? Do you have any examples of posts where a strategy for that was described? Because I don't think I ever saw one.stefan r said:That is not really what I was seeing on reddit. GME was shorted more than 100%. The statements "I just like the stonk" was do to SEC oversite. It went with "This is not financial advice".
The moral stuff was only relevant as a justification for pillaging them while they are exposed. If someone has their pants around their ankles and you run off with their wallet that would be morally bad. The hedge funds in question run off with people's money every day. It was not insider trading because the short interest was posted up on the big board where everyone could see it for months.
stefan r said:The hedge funds in question run off with people's money every day.
stefan r said:GME was shorted more than 100%
russ_watters said:Anyway, I saw a ton of posts from people who said they were doing it to harm the big, bad hedge funds, and if they also lost money in the process, that was OK. (If contradictory)
none, same as the casinoVanadium 50 said:What was the responsibility of the brokerages in this?
I would tend to agree, but Robinhood got criticized for preventing users from buying at $400 a share. Was that fair, or should they be praised? Or is it more a thanks, but no thanks, situation?Greg Bernhardt said:none, same as the casino
I don't know the regulatory policies a brokerage has to comply with but in my mind, it's my money, my responsibility. If I want to put a $400 bet down at the blackjack table. That is my choice and I'd be pissed if the casino was like "nah man". I get that there was unprecedented manipulation going on, but that needs to be handled with new regulations perhaps, not the brokerage making judgement calls.russ_watters said:I would tend to agree, but Robinhood got criticized for preventing users from buying at $400 a share. Was that fair, or should they be praised? Or is it more a thanks, but no thanks, situation?
So Robinhood was not alone or unique.When certain stocks become volatile, for example due to a coordinated effort to purchase them and boost their price, the clearing firm might charge more to settle the trades. Apps like Webull, M1 and Public all cited clearing firm charges when they suspended the trading of stocks like GME last month.
+1 on thatGreg Bernhardt said:none, same as the casino
It did not. Robinhood got criticized for preventing users from buying shares. Independent of which share, independent of the current price of that, and certainly independent of the future price evolution of it. A future price evolution that was partially influenced by the action of Robinhood and other brokers, of course.russ_watters said:but Robinhood got criticized for preventing users from buying at $400 a share.
It has been around $50-60 since February 4. It's still somewhat volatile, but nothing like the situation 2-3 weeks ago.Vanadium 50 said:Oh, and GME is at $49.69 (down 5%, SP500 unchanged).
Nonsense. You can't make the context go away by ignoring it.mfb said:It did not. Robinhood got criticized for preventing users from buying shares. Independent of which share, independent of the current price of that, and certainly independent of the future price evolution of it.
I do indeed believe that a significant fraction the Reddit crowd involved misunderstands at least two out of the three. I think the fundamental misunderstanding that drove the shenanigans here was Bullet #2.Vanadium 50 said:I think your devils advocate-ee needs to ponder a few things:
- If stocks can be said to have a price - at all - that prices needs to be able to move up and down with supply and demand. Just like tomatoes and aluminum foil.
- Companies don't go out of business because their stock prices go low. Companies go out of business because people stop buying their stuff.
- You can't put restrictions on sellers without those same restrictions applying to buyers. If you can't sell something, I can't buy it from you.
Lynching can't be justice? The System can't be stacked against the little guy? For my part, I don't disagree in principle with the concept of a righteous mob. But in this case, I believe the mob was both wrong on the ethical judgement and dumb to believe they could ultimately win.If the devil's advocate-ee believes the "Wall Street Fat Cats" were colluding, that's illegal. The solution is not to collude them right back. Especially if the evidence is "everybody just knows they done it". That's not justice. That's lynching.
Agreed. The saddest/dumbest comments I saw were from those who were down 85% and still said it was worth the loss based on the "principle" of it all. They basically handed someone else a big bag of cash and still believe they "stuck it to him". And there were a lot of those posts.In this case, I would also argue that the primary effect is to transfer wealth from one group of "Wall Street Fat Cats" to another. So if the goal is "to stick it to The Man", it's kind of a failure.
Of course!mfb said:You think Robinhood wouldn't get criticized if it stops users from buying Alaska Air tomorrow?
I'm not even sure how to respond to that. The same action in different situations can have different motivations and can and should be judged differently. That's what "context" means.How much does context matter if it gets criticized for stopping any stock at any time?
I asked in the negative, now I'm not sure how to interpret your answer.russ_watters said:Of course! That's called context.
You are trying to force a specific context into a situation that was independent of it. People would have criticized Robinhood for stopping any trade, at any value, with any history. Unless the stock stops being traded altogether or other corner cases that are not relevant here, obviously.russ_watters said:The same action in different situations can have different motivations and can and should be judged differently.
Alaska Airlines is currently at $60. In this scenario, do they stop trading if it is still at $60 or has it suddenly jumped to $1000? That's context, and it matters.mfb said:I asked in the negative, now I'm not sure how to interpret your answer.
Do you think they would get criticized? [regarding Alaska Airlines]
The context matters for:If yes: See, different context, but same action leads to the same response. The context didn't matter.
What? I'm talking about reality here. Robinhood prevented people from buying Gamestop at $400 (about - I don't have the real number). The stock went very high very fast, and then Robinhood stopped trading on it. That's a statement of factual reality. It's what actually happened.You made an extremely specific claim. That people criticized Robinhood for stopping them from buying [GameStop] at $400. Can you show who was so specific with their criticism?
Nonsense. I made a statement about objective reality. What I said is what actually happened.You are trying to force a specific context into a situation that was independent of it.
Nonsense. Trading gets halted on individual stocks or entire markets at various levels, for various reasons. I don't think I've ever seen such a backlash against such a common action.People would have criticized Robinhood for stopping any trade, at any value, with any history. Unless the stock stops being traded altogether or other corner cases that are not relevant here, obviously.
Not that I was in the market for it, but my investment company app had a notice about trading limitations as well.Astronuc said:So Robinhood was not alone or unique.
Yes, but I think you are ignoring the fact that this was NOT specifically because it had gone to 400 or any other price but because they didn't have the capital to cover further trades because of the total dollar volume on which they had to cover a 2-day float. If they had had the capital there would have been no reason for them to suspend trading regardless of the price.russ_watters said:Robinhood prevented people from buying Gamestop at $400
Yes, that's the cause-effect chain. You're not disagreeing with me:phinds said:Yes, but I think you are ignoring the fact that this was NOT specifically because it had gone to 400 or any other price but because they didn't have the capital to cover further trades because of the total dollar volume on which they had to cover a 2-day float. If they had had the capital there would have been no reason for them to suspend trading regardless of the price.
Agreed. That's why the fiery public criticism of them we saw is conspiracy-theory-ridiculousness.They make money from the back end of the trades and there would have been no reason for them to stop doing that, and I don't believe they WOULD have stopped doing that, provided that they had had the capital to cover the float for the required 2 days.
You and I (and Greg) do differ on the moral imperative, but that's ok. I don't think it was at play here.They do not lose money on trades and they have no legal or moral imperative to stop idiots from being idiots...
Whether or not such issues figured into Robinhood's actions, it surprises me a great deal to see people expressing opinions that there are or should be near zero moral imperative here or in a casino. Even absent a care about the consequences for some people, there is a fine line between enabling freedom and exploitation.Haborix said:While I recognize that capital supporting trade figured heavily, if not completely, into the calculation by Robinhood, I wonder how much this story weighed in their decision making. It is easier to wave people along when it is just money being gambled and lost, but when life is lost the decisions get harder. I only offer this to say the moral imperatives may not be so cut-and-dry.
phinds said:Yes, but I think you are ignoring the fact that this was NOT specifically because it had gone to 400 or any other price but because they didn't have the capital to cover further trades because of the total dollar volume on which they had to cover a 2-day float. If they had had the capital there would have been no reason for them to suspend trading regardless of the price.
russ_watters said:it surprises me a great deal to see people expressing opinions that there are or should be near zero moral imperative here or in a casino.
By posting one aspect you seem to assign importance to that aspect, if you want or not. As if Robinhood wouldn't have been criticized if that aspect had been different.russ_watters said:I think I see the problem here: the problem is you are reading past the facts into motivations that aren't being stated
On that sort of individual level I don't think it's possible. There's no easy way to even know if a guy is betting his $350 part time Starbucks paycheck on a share of GME from his mom's basement, and I'm not sure we should stop that. But many in the redditor army are too young to even rent a car. It's worth considering that investors should have qualifications. The quote in the article linked by @Haborix gives an insight:Vanadium 50 said:How do you fix this? Casinos aside, if you wish.
Suppose Robbinhood made you enter (correct) maximum upside and maximum downside before executing any transaction. If the client doesn't understand the implications, they can't make the transaction. Would that be desirable? Would that be practical? Did you have something else in mind?
I don't play in that world, so I don't even really understand what happened to him, to have an answer to that, but it would seem like he should not have been given a credit line fromThe note found on his computer by his parents on June 12, 2020 [the day he killed himself], asked a simple question. “How was a 20 year old with no income able to get assigned almost a million dollars worth of leverage?”