OT: wallstreetbets vs wall street

[dice]

if there's reason to believe that actual deep thought went into the making of the millions. nobody's gonna make a movie about the guy who made a bundle and then lost it and more, thinking that the stock would go to $1000 or whatever

i day traded for 10 years and had no idea about this until it hit the mainstream press yesterday. was thinking today that i should've maybe shorted it as soon as i heard the news ('cause by the time everybody knows about it, the party's over, generally speaking), but just saw that it went to nearly $500 today before crashing back to earth. that would've been a whole lot of heat to take. but the health of the company is the ultimate arbiter of price in the long-term. if the company is genuinely in trouble it's only a matter of time before the price goes close to $0 again

The result is yet to be seen. It may take months or years for the results of this to be seen. Maybe regulations, fines, people going to jail.

i would not be surprised at all to see regulations arise as a result. as for fines and people going to jail, is there a suggestion that anyone did anything improper?

Deep thought did go into it. It was working and people were/are making a lot of money. Many will lose money too. They saw the stock was shorted to impossible levels and this buying surge would lead to profit, got a large group of people to understand why it would work, and made it happen. He was the original poster on reddit I think? or atleast one of the originals?

seeing that a stock has high short interest and that money can be made if a lot of people pile in to buy is NOT deep thought. countless people monitor that stuff. what was unique about this is that it was apparently pre-planned well in advance by a whole lot of average joes by crowdsourcing. but at its core it sure looks like a standard pump and dump on steroids. whoever knew what they were doing got in early and then sold off to the fools who have gotten in late to follow the crowd. anyone buying at this point is just buying a lottery ticket

The issue here how the hedge funds and brokerages have responded. David was taking down a goliath. A movie can definitely be made about this. Maybe without the aforementioned reddit user, but seems like he was a big part of it.

certainly a legit story and maybe even a game changer in terms of institutional shorting

[dice]

if there's reason to believe that actual deep thought went into the making of the millions. nobody's gonna make a movie about the guy who made a bundle and then lost it and more, thinking that the stock would go to $1000 or whatever

i day traded for 10 years and had no idea about this until it hit the mainstream press yesterday. was thinking today that i should've maybe shorted it as soon as i heard the news ('cause by the time everybody knows about it, the party's over, generally speaking), but just saw that it went to nearly $500 today before crashing back to earth. that would've been a whole lot of heat to take. but the health of the company is the ultimate arbiter of price in the long-term. if the company is genuinely in trouble it's only a matter of time before the price goes close to $0 again

The stock will go to zero, and there will be a lot of people caught holding the bag and losing tons of money on this. I mean to state the obvious, this is all paramutual, someone makes 42 million at the expense of someone losing 42 million. At the same time, when it crashes is interesting, because the short interest is still over 100% last I checked, which means if people keep applying pressure, there's no reason this can't go well over 1000 or 5000 or any number until the short sellers actually sell out. When the short interest drops down to a reasonable number (even 50%) there will likely be a rush of profit takers and the stock will drop to fair market value over night, and you'll have tons of people who gambled and lost big.

If you think that the battle will last awhile, you can probably just buy and sell the wild day trade swings, but anything you do here is just straight up gambling. The time to make the huge money with little risk is gone. That was at the beginning of this thing by buying a few options. Now you still might make huge money, but only by taking huge risk.

thing is, as long as the stock is wildly overvalued, people are going to pile in to short it. the big selloffs will be when lots of speculative buyers lose their adrenaline and puke

[dice]

Reddit users are trying to convince people to go in on Doge Coin. Thoughts?

A friend of a friend made six figures off Doge.

Personally, I stay away from crypto.

Too much volatility, and too difficult to gauge the intrinsic value.

aren't the spreads between bid and offer large as well? hard to get in and out at a good price

[dougthonus]

A more interesting question is what reddit is doing is classic price manipulation. They're pumping up / dumping, and the guys who got in early and trying to convince everyone now that there is still this great opportunity made millions and will get out with millions, those who get in late, many of them, will lose 90% of what they put in.

In terms of this happening on gamestop where there was a legit short squeeze of hedgefunds, it's maybe not quite the same, people are discussing publicly, public information and what it means and executing a strategy.

When you get to things like dogecoin, this is straight pump and dump, and people trying to take the gamestop theory and say "look if we all do this together we can manipulate a stock price and get out", but that is straight manipulation. It will be interesting to see what comes out of that, because it is distributed and you can't easily pin it on anyone or anything. It's just a function of our ability to have anyone have massive reach and for people that don't know each other to now act in concert.

[CaPiTanAK]

Buy IPOE, a SPAC for SOFI, that will prosper off Robinhood demise. Likely a 100 billion stock in a couple of years similar to Square.

[dougthonus]

One other random thought with this hedge funds. They are taking on massive risk. I'm not sure if anyone is familiar with the demise of Ronin capital which was a prop trading firm (or effectively a type of hedge fund in a way except they traded in their own name rather than other peoples funds). They had a large position betting against market volatility in the pandemic, and like many hedgefunds, when they lost massive amounts of money, unreasonably huge amounts of money, they elected to try to ride it out.

They went bankrupt in the process and didn't have enough capital to cover their debts eventually when the market stayed against them for too long.

Game stop probably needs to go up another order of magnitude for that to happen, but if enough people keep buying it, then it could happen rather quickly due to lack of sellers.

[Dominator83]

Buy IPOE, a SPAC for SOFI, that will prosper off Robinhood demise. Likely a 100 billion stock in a couple of years similar to Square.

I got some of that 2 weeks ago before all this started anyway. I dont go for get-rich-quick stuff. When I buy stock I play the long game. ipoe (sofi) and ACTC ( spac for proterra) are great long plays. Im actually in the red on ACTC right now but not worried about it over the long haul.

[chicagoballer]

i would not be surprised at all to see regulations arise as a result. as for fines and people going to jail, is there a suggestion that anyone did anything improper?

the brokerages manipulated the market during the peak of it, halting buys. People could only sell. They will likely face a penalty, but wont be the amount that would have been lost if they didnt halt trading. Mulitple lawsuits pending. AOC planning a possible senate hearing.

seeing that a stock has high short interest and that money can be made if a lot of people pile in to buy is NOT deep thought. countless people monitor that stuff. what was unique about this is that it was apparently pre-planned well in advance by a whole lot of average joes by crowdsourcing. but at its core it sure looks like a standard pump and dump on steroids. whoever knew what they were doing got in early and then sold off to the fools who have gotten in late to follow the crowd. anyone buying at this point is just buying a lottery ticket

It wasn't some Einstein level analysis, but people did notice an opportunity to make money. You would only notice that opportunity if you understood the market. Any hedge fund manager would applaud a similar move, if it benefited them. So by that criteria, it was legitimate stock move. Average joes are not just being used, just read the stories on reddit. Many post of how this will be life changing for them. So many people are making a few thousand dollars, which is significant for most people.

And yes, some people will lose money, but we dont know how high it will go. Many seem to think >$1000 before selling. The ones who will regret it will be the ones who gambled off more than they should have. Ones who played on margins. And now, its become more than just about money. People dont mind giving up some gains just to give a middle finger to the wall street crowd.

[dice]

i would not be surprised at all to see regulations arise as a result. as for fines and people going to jail, is there a suggestion that anyone did anything improper?

the brokerages manipulated the market during the peak of it, halting buys. People could only sell. They will likely face a penalty, but wont be the amount that would have been lost if they didnt halt trading. Mulitple lawsuits pending. AOC planning a possible senate hearing.

what financial incentive did robinhood have to halt trading? their primary customer base is not the hedge funds

seeing that a stock has high short interest and that money can be made if a lot of people pile in to buy is NOT deep thought. countless people monitor that stuff. what was unique about this is that it was apparently pre-planned well in advance by a whole lot of average joes by crowdsourcing. but at its core it sure looks like a standard pump and dump on steroids. whoever knew what they were doing got in early and then sold off to the fools who have gotten in late to follow the crowd. anyone buying at this point is just buying a lottery ticket

It wasn't some Einstein level analysis, but people did notice an opportunity to make money. You would only notice that opportunity if you understood the market. Any hedge fund manager would applaud a similar move, if it benefited them. So by that criteria, it was legitimate stock move. Average joes are not just being used, just read the stories on reddit. Many post of how this will be life changing for them. So many people are making a few thousand dollars, which is significant for most people.

And yes, some people will lose money, but we dont know how high it will go. Many seem to think >$1000 before selling. The ones who will regret it will be the ones who gambled off more than they should have. Ones who played on margins. And now, its become more than just about money. People dont mind giving up some gains just to give a middle finger to the wall street crowd.

there will be just as many losers as winners on a dollar basis. that's the way trading works. it appears that the hedge funds will just make up a disproportionate share of the losers in this case. but there will be a ton of ordinary people buying (from other ordinary people cashing out) when the stock makes its inevitable final descent. they will lose the money that their counterparts made

[dice]

A more interesting question is what reddit is doing is classic price manipulation. They're pumping up / dumping, and the guys who got in early and trying to convince everyone now that there is still this great opportunity made millions and will get out with millions, those who get in late, many of them, will lose 90% of what they put in.

In terms of this happening on gamestop where there was a legit short squeeze of hedgefunds, it's maybe not quite the same, people are discussing publicly, public information and what it means and executing a strategy.

When you get to things like dogecoin, this is straight pump and dump, and people trying to take the gamestop theory and say "look if we all do this together we can manipulate a stock price and get out", but that is straight manipulation. It will be interesting to see what comes out of that, because it is distributed and you can't easily pin it on anyone or anything. It's just a function of our ability to have anyone have massive reach and for people that don't know each other to now act in concert.

with the pump and dump thing it's illegal only if someone makes false statements in convincing others to buy. just saying "i think we could send this thing to hundreds of dollars a share" doesn't qualify. i'm sure that the powers that be will be scouring message boards to try and turn up evidence of illegality

but yes, it's a guarantee that many of the smarter people who got in early on gamestop were cheerleading others to get involved out of naked self-interest. knowing full well that many of those getting in later will end up getting burned badly. which is ironic, because while getting rich they were manipulating the little guy in the process. in order to get even richer. from a moral perspective, basically stealing from them. reverse robin hood

[chicagoballer]

what financial incentive did robinhood have to halt trading? their primary customer base is not the hedge funds

[Dominator83]

These people do realize that there are other platforms to buy common stock on besides Robin Hood, right?

[patagonia]

Lots of misinformation in here. RH didn't halt trading to help anyone. Trades go through clearinghouses and buy orders require RH to place money in escrow in case of failure to deliver. The volatility of GME meant the clearinghouse required additional funds in escrow. They didn't have the cash for additional buy orders so they had to halt those orders and tap their lines of credit. Why didn't they prevent sales? Because sales means money coming in, not out, and so it's the counterparty that has to collateralize those trades.

*works in finance*

[chicagoballer]

Lots of misinformation in here. RH didn't halt trading to help anyone. Trades go through clearinghouses and buy orders require RH to place money in escrow in case of failure to deliver. The volatility of GME meant the clearinghouse required additional funds in escrow. They didn't have the cash for additional buy orders so they had to halt those orders and tap their lines of credit. Why didn't they prevent sales? Because sales means money coming in, not out, and so it's the counterparty that has to collateralize those trades.

*works in finance*

you really believe that? common man, everyone knew what was going to happen friday. Not having enough cash is a BS excuse. I watched their CEO interview and got their email. Robinhood is going to lose a lot users over this. Their impending IPO just got crushed/cancelled.

The only thing I agree with Robinhood is limiting margin trading.

[patagonia]

I mean, you can believe that conspiracy theory or you can google Robinhood and clearinghouse and find 50 news articles confirming what I just wrote. Up to you.

[dice]

These people do realize that there are other platforms to buy common stock on besides Robin Hood, right?

does robin hood have lower account minimums or something? why is it popular?

[VolumePoster]

Wrong place.

There are things in the world bigger than the bulls. This is an eye opening moment in time. I did not buy the stock and was a spectator on the side line, but I cant stop reading about it.

If you dont want to participate in one of the biggest stories of the year, you can just avoid the thread? It says OT on the title. I hope you take a moment to truly understand what happened today, its a battle of the rich vs the average joe. The rich are flexing their muscles and showing us how the world works

How do you guys know when another run is coming? I'm late to the game, and find the wallstreetbets website basically unreadable. Can you not simply buy stocks off old-school online brokers like Fidelity etc?

[VolumePoster]

These people do realize that there are other platforms to buy common stock on besides Robin Hood, right?

does robin hood have lower account minimums or something? why is it popular?

I think there is no cost for individual trades, whereas using larger brokerages - vanguard etc - charge for each trade.

[dice]

These people do realize that there are other platforms to buy common stock on besides Robin Hood, right?

does robin hood have lower account minimums or something? why is it popular?

I think there is no cost for individual trades, whereas using larger brokerages - vanguard etc - charge for each trade.

the big brokerages eliminated commissions over a year ago. that used to be an advantage for robinhood, but i don't know what the lure is anymore

[chicagoballer]

I mean, you can believe that conspiracy theory or you can google Robinhood and clearinghouse and find 50 news articles confirming what I just wrote. Up to you.

I will wait till the lawsuits settle, and hopefully senate hearings. I would like for hopefully all communications between melvin capital/citadel/robin hood/clearinghouse and other brokerages from this week to be made public when all the lawsuits come to fruition. See if any whistleblowers step up. Yes, the clearinghouse couldnt fill the orders. Robinhood is taking more criticism than maybe warranted because its what average people use(d). They didnt handle the situation well. Communication was poor. Selling off people's margin investing without confirming. Allowing selling but not buying. And they have a conflict of interest with citadel. The reason I think the clearinghouse couldnt sell to retail investors, which they cant say openly, are the hedge funds. The clearinghouse pushed the stop button because when they realized the hedge fund debt maybe too much if this continues... it maybe too large to be actually paid up. The hedge funds may go bankrupt, and they wouldnt be able to collect.

This whole fiasco stinks of protecting the hedge fund vs the retail investor. I admit that I dont know finance like someone who went to school for it, but doesnt mean something isnt wrong here. Robinhood has a trust issue, therefore its hard to believe them. RH CEO said they had enough money, but also didnt? https://news.yahoo.com/robinhood-misses-mark-restrictions-reddit-153228397.html