Anyone watching the congressional hearing with Robinhood?

[3peet]

Although I do agree, a lot of this is political grandstanding by both sides, I think there's a legitimate question on how stocks can be manipulated from social media and Robinhood controlling what customers can do.

Not sure which side I stand on to be honest.

 

[rolltide]

how can someone not sure which side you're on? it's a free market and this was the tool to allow the average American to buy and sell stocks. To then allow people to buy, but not sell, is disgusting and was only done because their parent company was being directly affected. I don't know the fine print of their terms of service and I'm sure they will contend that they're allowed to shut down trades whenever they feel like it.

this is an "us vs them" conversation not a bolshevik vs GOP one. nothing will happen to Rhood because their parent company greases the palms of all these DC twats that laugh at you for even watching the side show on TV

 

[Dr.Love]

how can someone not sure which side you're on? it's a free market and this was the tool to allow the average American to buy and sell stocks. To then allow people to buy, but not sell, is disgusting and was only done because their parent company was being directly affected. I don't know the fine print of their terms of service and I'm sure they will contend that they're allowed to shut down trades whenever they feel like it.

this is an "us vs them" conversation not a bolshevik vs GOP one. nothing will happen to Rhood because their parent company greases the palms of all these DC twats that laugh at you for even watching the side show on TV

Bingo.

 

[festeringZit]

how can someone not sure which side you're on? it's a free market and this was the tool to allow the average American to buy and sell stocks. To then allow people to buy, but not sell, is disgusting and was only done because their parent company was being directly affected. I don't know the fine print of their terms of service and I'm sure they will contend that they're allowed to shut down trades whenever they feel like it.

this is an "us vs them" conversation not a bolshevik vs GOP one. nothing will happen to Rhood because their parent company greases the palms of all these DC twats that laugh at you for even watching the side show on TV

The only reason I can see to side with Robinhood and some of these other platforms, is that they were worried about liability.

I tried to short GME when it was at 220 in my Ameritrade account, and it wouldn't let me. The problem with shorting is, there is unlimited potential loss, which is why they require a certain extra amount of funds to be available in your account to short, otherwise you get a margin call. But that begs the question, how much $$ should they require you to have in your account for some of these highly risky, speculative short plays? And if someone doesn't have the funds to cover massive margin calls, who is responsible? I think the trading platforms were worried that they'd assume at least some of the liability in these potential scenarios.

I'm still pissed at the situation, because I would have easily quadrupled my money in less than a week.

 

[bigwang]

The only reason I can see to side with Robinhood and some of these other platforms, is that they were worried about liability.

I tried to short GME when it was at 220 in my Ameritrade account, and it wouldn't let me. The problem with shorting is, there is unlimited potential loss, which is why they require a certain extra amount of funds to be available in your account to short, otherwise you get a margin call. But that begs the question, how much $$ should they require you to have in your account for some of these highly risky, speculative short plays? And if someone doesn't have the funds to cover massive margin calls, who is responsible? I think the trading platforms were worried that they'd assume at least some of the liability in these potential scenarios.

I'm still pissed at the situation, because I would have easily quadrupled my money in less than a week.

Sorry you couldn’t turn a quarter into a dollar.

 

[Mr_Mark]

if valid, the liability reasoning behind their actions seems to make sense

 

[Mr_Mark]

Sorry you couldn’t turn a quarter into a dollar.

if 4x your money was that simple and easy, shouldn't we all be filthy rich?

 

[AngelMartin]

I bought a call option for 1k and made 30 k on that initial investment with GME...my best option percentage score ever...almost got chased out twice where I would have only made 3K, then 20K, but I stuck with it

 

[skoda]

Where is stimulus it’ll disappear like the COVID. What happened to the Pelosi trade/deal.

 

[Willie99]

Although I do agree, a lot of this is political grandstanding by both sides, I think there's a legitimate question on how stocks can be manipulated from social media and Robinhood controlling what customers can do.

Not sure which side I stand on to be honest.

Politicians are pretentious assholes, so I'm never standing side by side with them

And Robinhood screwed their base, the little guy, fuck them too

So I'm standing against everybody

 

[Ricboff]

https://www.bnnbloomberg.ca/robinho...ing-hedge-funds-defends-trade-curbs-1.1564936

Robinhood Markets and Citadel, central players in the GameStop Corp. saga that riveted markets last month, plan to deliver a unified message to U.S. lawmakers Thursday: conspiracies swirling in Washington that they worked together to harm retail investors are categorically false.
Robinhood Chief Executive Officer Vlad Tenev, whose firm has faced a barrage of questions into whether hedge funds such as Citadel ordered it to prevent customers from adding to their GameStop bets, called such claims “market-distorting rhetoric.” Robinhood halted trades due to demands from its clearinghouse that it post more capital to deal with increased risk, he said in written testimony for a hearing before the House Financial Services Committee.
Ken Griffin, Citadel’s billionaire founder, said in his prepared remarks that he learned Robinhood had barred GameStop buy orders after the restrictions were publicly announced. “I want to be perfectly clear: we had no role in Robinhood’s decision to limit trading in GameStop or any other of the “meme” stocks,” said Griffin, whose financial empire includes a hedge fund and massive market-maker Citadel Securities.
Digging into the relationship between Robinhood and Citadel has been a focal point for lawmakers since small-time investors revolted in January after Robinhood temporarily blocked their push to drive GameStop and other stocks to the stratosphere. Citadel Securities pays Robinhood for the right to execute its customers’ orders, and a theory that gained traction on social media is that Griffin’s market-maker leaned on Tenev’s brokerage to benefit Citadel’s hedge fund -- an assertion both firms have repeatedly rejected.
Thursday’s hearing, still expected to be full of drama and tense moments even though its virtual, will offer members of Congress their first chance to grill the executives on frenzied trading that triggered alarm bells from Wall Street to Capitol Hill. Chairwoman Maxine Waters, a California Democrat, has said she wants to scrutinize all the players involved to assess whether Washington needs to curtail the influence of hedge funds and strengthen guardrails for retail investors.

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Gabe Plotkin, a hedge fund manager whose firm took heavy losses during last month’s Reddit-fueled trading, plans to tell Congress that he was “humbled” by the experience.
“Melvin Capital played absolutely no role” in the decisions of trading platforms to limit the buying and selling of GameStop shares, according to Plotkin’s written testimony. “In fact, Melvin closed out all of its positions in GameStop days before platforms put those limitations in place.”
‘Difficult Time’
Plotkin used his testimony to clarify that Melvin Capital wasn’t “bailed out” by the $2.75 billion it received from Citadel, Point72 Asset Management and others last month. Even though the firm was going through a “difficult time,” it always had adequate funding and wasn’t seeking a cash injection. Citadel proactively reached out to become an investor, seeing it as an opportunity to “buy low,” Plotkin said in his remarks.
Melvin Capital lost billions closing out its GameStop position and reducing other wagers. The firm’s assets fell to about $8 billion in January after starting the year with $12.5 billion.
Keith Gill, a Reddit user known as “Roaring Kitty” who is credited with inspiring GameStop’s rally, will testify that he was merely an individual investor using public information to study companies. Gill, one of the most influential participants pushing GameStop on the WallStreetBets Reddit forum, was sued this week in Massachusetts for misrepresenting himself as an amateur investor and profiting by artificially inflating the price of the stock.
“I did not solicit anyone to buy or sell the stock for my own profit,” Gill said in his testimony. “I did not belong to any groups trying to create movements in the stock price. I never had a financial relationship with any hedge fund. I had no information about GameStop except what was public. I did not know any people inside the company, and I never spoke to any insider.”
Jennifer Schulp, director of financial regulation studies at Cato Institute and a late addition to the hearing’s lineup of speakers, will testify that rule changes may not be warranted in light of the minimal impact on markets. “By no means, though, should the GameStop phenomenon result in changes that restrict retail investors’ access to the markets,” she said.


In his testimony, Tenev described the morning of Jan. 28, when the brokerage halted purchases of GameStop and other “meme stocks.” At 5:11 a.m., the industry’s clearinghouse -- a body that manages system-wide risk -- demanded a deposit of more than $1 billion from Robinhood, he said. Because the sum demanded was even larger than the amount of net capital the online brokerage had on hand, an additional charge of $2.2 billion was slapped on top, bringing the total amount due to about $3 billion. Robinhood complied with its net capital requirements at all times during this period, the company says.
\Around 7:30 a.m., in a scramble to meet the requirements, Robinhood decided to stop customers from buying GameStop and other volatile stocks. The clearinghouse then agreed to waive the entire $2.2 billion charge it had initially added, according to Tenev’s account. With an additional $737 million deposit that morning, combined with the amount Robinhood had already posted at the clearinghouse, the broker met its requirements for that day.
To help prevent last month’s events from happening again, Robinhood has called on regulators to make the settlement period for stock trades instantaneous. Citadel’s Griffin also called for a shorter settlement time.

 

[snoop]

THIS Robinhood is robbing the poor and give it to the rich @)

 

[CHOPTALK]

The only reason I can see to side with Robinhood and some of these other platforms, is that they were worried about liability.

I tried to short GME when it was at 220 in my Ameritrade account, and it wouldn't let me. The problem with shorting is, there is unlimited potential loss, which is why they require a certain extra amount of funds to be available in your account to short, otherwise you get a margin call. But that begs the question, how much $$ should they require you to have in your account for some of these highly risky, speculative short plays? And if someone doesn't have the funds to cover massive margin calls, who is responsible? I think the trading platforms were worried that they'd assume at least some of the liability in these potential scenarios.

I'm still pissed at the situation, because I would have easily quadrupled my money in less than a week.

Yes it’s the broker .
The clearing house requires the broker to put up a certain amount of money for each trade . Typically that number is around 10% but when a stock becomes volatile like GME that 10% goes way up . It can get as high as 80%.

The reason for what Robin Hood did what it did was not to protect hedge funds from losing their shorts it was simply liquidity issues with the clearing houses on these stocks .

It makes them look bad but they are getting a bad rap over this .

 

[CHOPTALK]

It takes 2 trading days for a stock sale to clear . The reason you have access to funds immediately is because the clearing house basically loans you the money for that 48 hr period .

So Robinhood has to play the clearing house a premium in case the buyer or seller reneges and don’t come up with their end of the deal. Because the clearing house is on the hook for the entire trade .

So RH or any other broker has to pay a premium to the clearing house for every trade that they get refunded after the 2 trading day settle period is expired . But since this stock and amc and others were so volatile the premiums where almost 100%

 

[Dr.Love]

The reason for what Robin Hood did what it did was not to protect hedge funds from losing their shorts it was simply liquidity issues with the clearing houses on these stocks .

It makes them look bad but they are getting a bad rap over this .

So.. They screwed over their customer base to save themselves from going under? Am I interpreting that correctly?

I think the one thing we all can agree on.. Wall Street is a corrupt mess. And this was exploited. Not sure what the answer is to fix this, but something needs to be done so the little guy never gets stolen from like this again.

 

[CHOPTALK]

So.. They screwed over their customer base to save themselves from going under? Am I interpreting that correctly?

I think the one thing we all can agree on.. Wall Street is a corrupt mess. And this was exploited. Not sure what the answer is to fix this, but something needs to be done so the little guy never gets stolen from like this again.

Yea sort of.
But I’m sure the customers don’t want them to go under either

 

[3peet]

Yea sort of.
But I’m sure the customers don’t want them to go under either

Exactly. Robinhood is one of the venues for the average man or "little guy" to get in the game.

 

[Dr.Love]

robinhood is one of the venues for the average man or "little guy" to get in the game.

*was

 

[Dr.Love]

Yea sort of.
But I’m sure the customers don’t want them to go under either

If it's truly a "free" market, then what happens, happens. Again, not sure what exactly needs to be done to fix this, but it needs to be fixed. Or else at some point something is going to happen to cause the whole thing to come crashing down. Matter of when, not if.

 

[rolltide]

not only is this woman a special kind of stupid but remember she's the Chairwoman of the House Committee on Financial Services. this is Guam tipping over sort of stupid....


Maxine Waters asks “why aren’t customers entitled to a refund when they lose money on stocks?”