Robinhood Clients Say Platform Has Removed GameStop and AMC, and is Only Allowing Holders To Sell (businessinsider.com) 251
Robinhood removed GameStop, AMC, BlackBerry, and Nokia from its trading platform on Thursday, leaving investors unable to buy the highly volatile stocks. From a report: The discount brokerage informed clients they can close out positions in the affected stocks but cannot purchase additional shares, according to numerous screenshots shared on Twitter. The move came before markets opened on Thursday. The stocks that were removed have all surged in recent trading sessions as day-traders united in Reddit forums like WallStreetBets frenetically buy the names to push their share prices higher. The phenomenon has already fueled massive losses for numerous hedge funds and caught the attention of regulators and the White House. Joshua Topolsky, a technology reporter and commentator, said: "Literally Robinhood just told the world that you can play until someone bigger than you doesn't like the game anymore. Brand suicide."
When trades are free (Score:5, Insightful)
Re:When trades are free (Score:5, Insightful)
Trade with a shitty third rate broker this is what happens I guess. Still stinks to high heaven. I totally get them pushing 100% margin equity requirements on some of these tickers given what is happening but not letting people who want to trade do so; its crap.
Masters also forcing users to sell (Score:5, Interesting)
Not only can you not buy GME on Robinhood, but if you own shares of GME Robinhood is magically selling them without you asking [twitter.com]
Link to image of Tweet [disquscdn.com] in case Twitter bans user/post.
Re: When trades are free (Score:3, Informative)
Re:When trades are free (Score:5, Informative)
There's more.
Citadel is owned by Ken Griffin, who happens to be a major backer of Melvin Capital, and who also dumped an additional $2 billion, probably so Melvin could keep their massive short position open.
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Re: When trades are free (Score:3, Insightful)
Re:When trades are free (Score:5, Insightful)
There's more.
Citadel is owned by Ken Griffin, who happens to be a major backer of Melvin Capital, and who also dumped an additional $2 billion, probably so Melvin could keep their massive short position open.
I'm a bit of a novice at stock trading but this is my interpretation:
1) A number of companies, including Melvin Capital, shorted GameStop (sold at $X then promised to repurchase at a future date). Meaning if the stock price went down to $Y they'd make $X-$Y return.
2) If the stock starts going up instead of down you get out of the trade by purchasing the shares early and essentially substitute them for the shares you own when the short option comes due.
3) But if there's more shares shorted than stock available then the short sellers can't cover and the price will skyrocket, this is the short squeeze.
4) If the price keeps going up Melvin Capital and funds could go bankrupt.
5) Robinhood has a relationship with someone who has a huge stake in Melvin Capital.
6) Preventing users from purchasing GME but allowing users to sell would cause the price to drop. Which looks like an attempt to stop the short squeeze and save the short sellers like Melvin Capital.
If this is an accurate summary I'd say it does very much sound like market manipulation. I don't know what Robinhood's direct financial stake is, but if I was them I suspect billionaires facing ruin can be very influential.
Wrong about letting you buy (Score:3, Interesting)
They do not let you buy more GME anymore (they did yesterday, just not on margin accounts, causing an earlier version of this story to circulate and me to misread the article.)
The rest of what I said i stand by.
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Robinhood just told the world that you can play until someone bigger than you doesn't like the game anymore.
My 4th grade niece would have put her hands on her hips, cocked her head, and said "DUH!"
Re:When trades are free (Score:5, Informative)
But they still let you buy GME, you just have to supply cash up front
Can't even read TFTitle?
Robinhood Clients Say Platform Has Removed GameStop and AMC, and is Only Allowing Holders To Sell
Or TFSummary?
Robinhood removed GameStop, AMC, BlackBerry, and Nokia from its trading platform on Thursday, leaving investors unable to buy the highly volatile stocks.
Or TFQuote in TFSummary?
The discount brokerage informed clients they can close out positions in the affected stocks but cannot purchase additional shares
Well, at least your username doesn't imply something you're not doing...
Only solution (Score:5, Insightful)
Re:Only solution (Score:5, Funny)
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with hookers and blackjack
So, that’s different from today.. .. how?
Re: Only solution (Score:4, Interesting)
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The WH is occupied by a leader of the party that sold out to banks when there was a risk of Bernie being nominated, they had the rigged primary in a bank building to send the message, then starting using banks to block political opponents. The WH had the SEC indicating they were going to stop the little guy in this case.
Those aren't your allies.
This is the textbook definition (Score:2)
Not trivial (Score:5, Informative)
Source [theguardian.com], since citation trolls can't be bothered to do their own searching.
That info is probably not even up to date as the 30% loss number was thrown around a few places 2-3 days ago.
Re:Not trivial (Score:4, Insightful)
God forbid that regular investors should team up to push around the hedge funds a little, after decades of hedge funds shoving the markets any way they please.
What's good for the goose, and all that.
Re:Not really (Score:5, Informative)
> the amount of money lost is trivial to a hedge fund
Melvin Capital needed to borrow $3 billion from fellow hedge fund brokers to cash out of their obscene position on Gamestop and avoid bankruptcy.
It's said that they lost nearly a third of their assets in this debacle... I don't think losing 30% of your shirt is "trivial" even to people like these.
=Smidge=
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I don't think losing 30% of your shirt is "trivial" even to people like these.
From he perspective of running a business like Melvin no but from the perspective of the people who have stakes in something like Melvin. I expect is purely a matter of emotion.
How does your life really change when you have $1,000,000,000 vs $660000000?
Re:Not really (Score:5, Insightful)
Considering most of these hedge funds are working with other people's money, it probably changes drastically when all your investors blow up your phone lines saying they want to move their pension money to funds run by competent people that don't lose >30% in a week.
That 30% hit can easily turn into a 80% hit if people start pulling their cash. Yes, it's a realized loss, but sometimes you need to stop digging and take the hit.
Re:Not really (Score:4, Informative)
Let me wipe away my giant salty crocodile tears. Turns out that maybe you shouldn't try shoving the market around by taking massive risk positions and expecting the tail to wag the dog.
Make a risky bet, risk losing your wager. That's how the market has always been, and shorting is about as risky as it gets without going full-on put option.
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Re:Not really (Score:4, Insightful)
That's how the market has always been
Only for the small investors. The big boys make the rules, and if they start losing the game they can change the rules any time they want. As we see today.
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The amount of money lost is trivial, because they haven't realized the losses. But at some point the steamroller can be held off no longer.
Robinhood had to save the rich.
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If you're going to abbreviate a company name when talking about trading, please use their actual stock ticker to reduce confusion. I was seriously wondering what Goldman Sachs had to do with this.
Re: This is the textbook definition (Score:3, Insightful)
Robin hood operates in a HIGHLY regulated industry. They are absolutely definitely NOT allowed to do whatever the fuck they please.
The SEC does not often take action but when they do whoever is on the receiving end of the investigation is usually in deep deep shit.
If the SEC takes notice this could potentially kill RH entirely.
I don't know who started all this stuff about companies can do whatever they want because "they are private and own the servers". See what happens when Facebook tries to open Kiddie
Re:This is the textbook definition (Score:5, Insightful)
No they are a brokerage with privileged access to a public market and are regulated. Worse, to a certain extent they are paper trading a fictional market which is on its own illegal for real money and the way they do always walking a tight-rope of legality. Don't get me wrong, the other brokers are as well, but there it is.
This is definitely market manipulation. Whether wall streets bitch in the white house will do anything is another story.
America has a ruling class (Score:3, Insightful)
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Time to switch trading platforms (Score:2)
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That's like saying a bank has no justification for restricting loans during a zooming housing bubble. Why should RobinHood be required to be on the hook for even more of what should obviously be really, really bad margin loans?
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That's like saying a bank has no justification for restricting loans during a zooming housing bubble. Why should RobinHood be required to be on the hook for even more of what should obviously be really, really bad margin loans?
If RH is smart, and I assume they are, they are not on the hook for a penny of those loans as they'll simply sell the stock being held on margin to cover those loans before they go bad; the account holders are the ones about to get a lesson in margin calls. I guess a sudden, plunge in value would hurt; but then trading would likely be stopped before that; but even then the market makers are likely to be the ones holding the bag.
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If they set up their margin accounts in any sensible way, they aren't on the hook at all unless the stocks instantly go to $0.00. If they require at least 50% equity in any margin trade, they're one margin call away from breaking even on it and the losses are realized by the investor who made the shit trade - either the investor puts more cash into their account to raise above the maintenance margin, or their position is liquidated and RH takes their money back.
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It's my own damn money, if I can place all of it on black in Vegas, I should be able to put all of it in GME.
Re: (Score:3, Interesting)
This is now plain stupid. I can't find a justification for why a trading platform can prevent the purchase of specific tickers. Don't tell me it's to protect ignorant retail investors; people that gamble on GME and BB and what not may not fully understand what they're doing, but they willingly chose the risk, and should reap the rewards or the losses (and I have no doubt there will be many of both, depending on when you jump in). It's also not to protect the "market", since the WSB people are not doing enough to destabilize the market, just certain tickers, and they're mainly screwing some HFs and then themselves. Let them, most of us who hold ETFs don't give a crap. If a big enough trading platform can limit trades on certain tickers, wouldn't that become some form of market manipulation? How is this even legal?
Yea, it's generally a good idea to let the suckers in so you can make money, whether it's in a poker game or the market. There's nothing wrong with teaching someone a lesson in exchange for their money. Exchanges, however, run on trust, and take action when they see unusual activity, such as the NYSE's brakes when trading hits certain triggers. Stopping trading in a certain stock is not illegal. In this case, they are stopping a massive pump and dump scheme; while still giving customers with positions in
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Robinhood is a trading platform, not an exchange, mainly (only?) used by small fish. What you're telling me now is if I were rich, and called my broker friend at JPM, he could place the order, but my neighbor can't. That's not okay.
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The system is protecting itself. Simple as that. Look at all of the libel the financial press has publishing the last week. The game is rigged, only the financial class and their friends are allowed to win. We haven't been a capitalist country in a long, long time.
Re:Time to switch trading platforms (Score:4, Informative)
Apparently your username is poorly chosen: you CANNOT buy GME on RH with cash right now. You've made an assumption about how other brokerages are handling GME and applied it to RH without actually doing your due diligence.
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Re:Time to switch trading platforms (Score:5, Funny)
Robinhood removed GameStop, AMC, BlackBerry, and Nokia from its trading platform on Thursday
FFS it is even in the 1st line of the summary. Your name is a complete lie. Or do you just read the pictures?
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Citadel got what it wanted (Score:4, Interesting)
Now that Citadel, owners of Robinhood, bought Melvin for peanuts they don't need the redditors anymore. These guys thought they were sticking it to the man but they were just duped into fighting a war between big investors.
Ass biting regulation (Score:5, Informative)
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Re:Ass biting regulation (Score:4, Insightful)
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It's not allowed, they do it any way ... then they have 4 days to come up with an excuse why they won't deliver and if the SEC doesn't accept the excuse they get a slap on the wrist.
Fail to deliver should simply be fraud, in electronic trading there is no excuse for delayed delivery any more. A trade should simply be an atomic swap of ownership of the certificate held in custody by the exchange.
Re: Ass biting regulation (Score:4, Insightful)
The stock market is not a free market. Anyone who believes that doesn't understand the term. There are all sorts of restrictions to keep small players from taking money from the big players. They're always touted as tools to keep the ignorant safe, or to keep the market stable. But they're all really just protectionist policies for the super-rich.
Wake up call (Score:5, Insightful)
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Next the leaders of WallStreetBets will get cancelled on some pretext and banned everywhere
If you mean deepfuckingvalue, who bought 50k GME at 0.20 and as of Market close last night sitting at a gain of 53 million with 12 million taken out while holding the rest - you can’t cancel a living meme that made tens of thousands of Internet forum heavy users rich while himself having private island money. Whoever thinks they can shut something like this down obviously hasn’t heard of the Streisand effect.
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- you can't cancel a living meme that made tens of thousands of Internet forum heavy users rich while himself having private island money.
Watch them do it. They will go over his personal history, private messages, or just outright invent to smear him as racist, radical, alt-right or anything else that sticks. Then they ban him from all social media, banking and so on. Sure, millions will make it easier to personally survive, but 50-100mil is barely enough money to fight off something like that. He would need an army of lawyers, PR firms, bullet-proof hosting, offshore accounts and anonymous access to banking. He would also need to get out of
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Why aren't they hitting Sears the same way? (Score:5, Interesting)
The best explanation that I can think of for why the hedge fund managers aren't trying to kill off Sears for profit is because they don't want to eat their own - Sears is still run by a hedge fund manager who bought out Sears and KMart but has not meaningful experience with retail - otherwise it would seem to be a prime target for short selling. Sears has closed and sold most of their real estate in the past decade and has no viable path forward, they've been self-destructing in slow motion.
Re:Why aren't they hitting Sears the same way? (Score:5, Interesting)
The guy destroying Sears has set it up so he gets paid back first, and he's profiting from selling off the real estate. So what's happening to Sears is deliberate, and it's not clear that there's a reasonable way to profit from it. If they go bankrupt, any late entering shareholders are just going to get fucked.
Gamestop, on the other hand, is dying because its business model has become nonviable, and they've done everything they can to hasten their demise. They stopped carrying the vintage stuff that used to get people in the store, so they threw away their only competitive advantage.
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Re:Why aren't they hitting Sears the same way? (Score:5, Interesting)
Another explanation is that Sears recently (2018) filed for bankruptcy while GameStop has not (yet). In order for a short position to have value, the threat of bankruptcy needs to be real enough to help drive down the stock, but not happen. When a company declares bankruptcy, the shares become worthless, as does the short position. Even though the short seller likely doesn't owe anything on their position, they also would have spent a lot of time with zero gain. It would be like me asking you if you want to put a lot of work into lending me $100k so that I can pay you back exactly $100k. Where's the value?
With a company like GameStop teetering on the edge of bankruptcy, the short seller has incentive to do the work (including finding ways to drive down the price of the stock) to realize the value.
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sears was near death before covid but some how did (Score:3)
sears was near death before covid but some how did not die in 2020.
Which side of history will you be on? (Score:2)
A lot of these "amateur investors" will end up losing all their money, but who's the real winner here? IF they succeed in shining light on the abusive practices in wallstreet, then we'll all sing their praises some day.
Re:Which side of history will you be on? (Score:4, Interesting)
Shining light is meaningless. We all know it's abusive. Everyone knows it's abusive. But politicians derive benefit from the system so they have no motivation to change it. It's not like they work for you, plebe.
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Honestly, I think your attitude is part the problem - you treat all politicians the same as each other and in doing so you make it more difficult to be the counter to be true, for what you want, to be true.
No, in fact I don't. But...
people like Sanders and AOC
...are sharply in the minority. There are only a handful of really principled politicians. Granted, all of them are Democrats, so they're all grouped together in one place. But not all Democrats give two fucks about you. You'd better get that idea straight right now or you're going to suffer.
If you thought Robinhood was a brokerage. (Score:2)
tuff shit (Score:4, Funny)
So much for being "For the people"... (Score:2)
The captive market responds (Score:5, Interesting)
Re:The captive market responds (Score:4)
Two things... (Score:2)
"massive losses for numerous hedge funds"
First, you need not look through the article further to understand what has happened - the big boys are being burned by an impromptu cabal of inDUHviduals who, intentionally or unintentionally, found out they have market power.
Second, this happens all the damned time in stocks. It's just cleverly disguised by the big boys, the institutionals, sovereigns, and Street names. They rarely get caught, with exceptions such as LIBOR (different market, same collaboration) and
Rules for the ruled class (Score:2)
Just loving it... (Score:4, Funny)
Kind of laughing at the news about the hedge funds that went bankrupt shorting Game Stop, only to have the gamers game the hedge funds at their own game. Buying up Game Stop stock driving the share price up so that when the shorts came due, the hedge funds owed millions.
Like, um, Game Stop's customers are entirely gamers who spend hours upon hours perfecting and honing their skills to beat puzzles. And the hedge funds are shocked that when they took actions that hurt these gamer's beloved retail chain, that the gamers figured out how to win.
***
Hedge Fund: "Let's short the stock, promote the business' pending failure to drive the stock down, profit on it. Then we can turn around and use those profits to buy the company cheap post bankruptcy. Strip it of it's value, screw it's long term employees over, and then sell it for a hefty profit."
Gamers: "F-U. Hey team, massive multiplayer co-op game against rival faction. Everyone join in and let's take these bass-turds down!"
Hedge Fund: "What do you mean we just went insolvent? Isn't their a government regulation that protects us from having done to us what we do to other companies? What do you mean there isn't one? Well call up all the politicians I have donated to and have them pass a regulation now!"
So, who's buying (Score:3)
So, who are they selling to, and how is this not market manipulation?
Is it even legal??? (Score:3)
Never understood why RobinHood (Score:4, Interesting)
Never understood why RobinHood has such a following, they are known for tragic security issues like storing passwords in cleartext, bugs like the one that gave unlimited margins, outages etc.
And now this. A big broker allowing only sells for a security is definitely market manipulation - regardless whether it is RobinHood or their provider behind them.
I mean there are many discount brokers out there, I know people using Interactive Brokers a lot, out of curiosity I logged into my old SogoTrade account where I keep an ETF and I just now bought a GME share @240 (as a test, I am not a WSB follower, although I do enjoy what they are doing to short sellers watching from the sidelines), it works fine, and AFAIK SogoTrade is one of the cheapest brokers...
I smell a class action and Gov investigation (Score:4, Insightful)
Even a well intended attempt to protect clients from loss will backfire.
It also seems like a form of market manipulation to only allow one way transactions.
Changing the rules mid-game (Score:5, Insightful)
Everything that r/wallstreetbets did regarding GME, BB, etc. has been entirely legal, according to the SEC rulebook.
By refusing to execute trades, Robinhood (and other brokerages) are interfering with the operation of the free market. Their actions are distorting GME's stock price unnaturally, which is the textbook definition of market manipulation.
This is causing people to lose money (myself included). In my case, it's not much... it's money I can afford to lose, and I knew that there were risks involved with this type of speculation.
However, I did not expect (and no reasonable person could expect) that the brokerages would actively interfere with the natural forces of supply and demand. I can understand refusing to extend margin credit for these types of trades, but refusing to execute cash trades... that's unacceptable.
I see a class action lawsuit coming.
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If its only margin; than I agree this is exactly what they should be doing.
Wrong, You didn't even load the app (Score:5, Informative)
It's cut off for Buys in general. I just checked it and I can't purchase any with cash either. Sell is the only available Trade option.
Other brokerages cut off margin buying, sure, but RH just cut off BUYs in general it appears.
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Do you have margin trading even enabled? TFA said they did the same as TDA and others (who turned it off for margin accounts.)
Re:Wrong, You didn't even load the app (Score:5, Interesting)
Re:Wrong, You didn't even load the app (Score:5, Informative)
The whole point of capitalism is that the market should largely police itself.
Well, no. The point of capitalism is that capital controls the means of production. You can't have a free and fair market without external controls.
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I exchange my labor for wages. The owner gets the benefit of my labor, but pays for it.
How does that system favor the owner at my expense?
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Re: Wrong, You didn't even load the app (Score:5, Interesting)
I'm on a cash account. I can't find GameStop anywhere. It's been removed from RobinHood.
This is market manipulation. The Redditors acted unethically, but within the law, presumably. RobinHood is breaking the law.
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Buy GME
This stock is not supported on Robinhood.
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Yeah, sorry about that. I don't use RH, but when I read the article it said they were following TD:A and Schwab, and yesterday they did cut off margin trading.
I did get some friends to check, and you are correct and I was wrong.
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It's all good - it's a shocking thing to happen, I'm not surprised people couldn't believe it was a real thing.
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This is wrong. You cannot buy these securities in RobinHood, period. I just checked the app and they don't even show up in search.
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Not sure how this post is at a 5 but it's MISInformative, or outdated
Still market manipulation (Score:2)
Even if that's true (not clear at the moment), the fact that they haven't turned off buying other stocks on margin means that it is still an attempt at market manipulation, which is illegal. Only the stock exchange itself can halt trading in certain stocks.
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Comment removed (Score:4, Interesting)
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Robin Hood, and many other brokerages, have turned off buying GME, AMC, on margin . That is, they're not loaning capital to a bunch of YOLO'ing people. Capital that they will be on the hook to their institutional counterparties for, and then try to have to recover from people who say stuff like "so, I got paid today; rent going to be late YOLO GME". Which is a fine position for individuals to take, I guess (they seem to not understand some of the risks), but it's ridiculous to expect RH to subsidize it with loans. Because are they going to to go after 15 million people without money for 10,000 a piece?
RH is still protected. While they lend money to borrow on margin, they're only going to lend what, 50% of the purchase price and require you to maintain some percentage of equity in the stock. So, if the price drops, and your equity % goes below RH minimum, they simply sell your stock, payback the loan they gave you from the proceeds, and what is left over is yours; unless you cough up more cash to maintain the required equity %. They should not lose money on those accounts, but want to avoid scrutiny ove
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I mean, the YOLOers literally bought all available calls.
RH is only protected if that $250 you borrowed (combined with your $250) to buy one share is what that one share can fetch when the sell it because you cannot make your margin call. I think they have to give you time to pay up the margin. Would you want to be trapped in a position in a bubble stock at $250 fo
Re:Good lord, this is wrong (Score:5, Informative)
Robin Hood, and many other brokerages, have turned off buying GME, AMC, on margin . That is, they're not loaning capital to a bunch of YOLO'ing people. Capital that they will be on the hook to their institutional counterparties for, and then try to have to recover from people who say stuff like "so, I got paid today; rent going to be late YOLO GME". Which is a fine position for individuals to take, I guess (they seem to not understand some of the risks), but it's ridiculous to expect RH to subsidize it with loans. Because are they going to to go after 15 million people without money for 10,000 a piece?
You are incorrect, at least for Robinhood which is what I am using. The statement they put out says they are restricting margin. They are restricting everything. Don't believe me? Download the app yourself and try to buy GME. You won't even have the option to do so. You'll see a Sell button and a message saying "You can close out your position in this stock, but you cannot purchase additional shares". Not margins, not options. Cannot buy shares.
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Robinhood has block buying WITH CASH. Stop spreading this lie.
I WAS WRONG - BAN ON ALL BUYS (Score:2)
Sorry, when I read the article (esp with its references to TD:A and Schwab doing the same) I thought it was late reporting on the freeze on margin trading (which happened yesterday.) I got some friends to load RH on cash-having non-margin accounts This is a real freeze on buying GME or AMC at all.
This is pretty damn BAD. But, while I want to talk about that, I want to get my misinformation out of the conversation first.
Not just RH (Score:3)
Other brokerages are following suit. Not letting AMC or GME get purchased and requiring 100% margins.
Earlier, I thought this was about the margin restrictions that came late last night - but it's expanded to include cash purchases too.
Re:Hmmm (Score:4, Interesting)
Koss and American are both on the no-no list now too. I already owned a some shares of American Airlines (I bought a lot of stock in airlines when they tanked last March/April assuming they'd eventually go back up) and if I go there right now it says I can only sell my current shares, not buy any additional ones.
Its sort of disappointing as sure I can sell them - but if all the brokerages are blocking people from buying who the hell am I going to sell them to? Obviously not everyone will be blocked but with large portions blocked from buying it will depress the price from what it would otherwise be.
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This is a dumb excuse. If your retirement funds are invested in a hedge fund then you accept the risk. If you don't like it, vote not to make such investments, quit and take your retirement funds with you, or, best of all, vote to make employer run retirement funds illegal.
As for the actual elderly, no ethically run fund should be investing actual elder