Gamestop stock surges 400% this week alone

[Heliian]

12 minutes ago, Shreyas1 said:

Is this legal? I understand its their brokerage but surely something like this is considered market manipulation?

It looks like the market is going to stop trading on these anyways. 

[Kisai]

22 minutes ago, Shreyas1 said:

Is this legal? I understand its their brokerage but surely something like this is considered market manipulation?

It probably isn't.

 

They will probably wait until after markets close for all the OTM (out the money) options to expire and re-evaluate, but other than that, RobinHood and Interactive Brokers, eTrade, etc still have their orders completed by someone at the NYSE/NASDAQ trading floor (be that human or electronic.) They're not like transferring money where nobody sees anything going on.

 

I do want to see what happens but I'm not willing to throw good money after bad on it. 

 

For anyone who wants a refresher course on the 2008 financial crisis in a drama form, watch "The Big Short" on Netflix. It explains some of the things we're seeing here, and yes, the shorts are ultimately the bad guys.

[Shreyas1]

21 minutes ago, Kisai said:

It probably isn't.

 

They will probably wait until after markets close for all the OTM (out the money) options to expire and re-evaluate, but other than that, RobinHood and Interactive Brokers, eTrade, etc still have their orders completed by someone at the NYSE/NASDAQ trading floor (be that human or electronic.) They're not like transferring money where nobody sees anything going on.

 

I do want to see what happens but I'm not willing to throw good money after bad on it.

Yeah, there are now threads on WSB about starting a class action lawsuit. Don't know how that will go, but they have a lot of evidence that robinhood isn't allowing them to sell.

 

 

Edit: Oh wow, this goes way deeper than I thought.

 

You know who pays robinhood for user data? Citadel

You know who bailed out Melvin earlier this week? Citadel

 

Now, I'm no conspiracy theorist, but there seems to be a conflict of interest here.

 

Sources:

 

https://www.cnbc.com/2020/08/13/how-robinhood-makes-money-on-customer-trades-despite-making-it-free.html

https://finance.yahoo.com/news/gamestop-short-seller-melvin-gets-030105922.html

 

 

 

[WkdPaul]

Looks like cutting access to those stocks worked with the price (at least for GameStop, that's from my Questrade account), it's very volatile, it dropped to $112 but is now hovering around $230-$240  ;

 

[Tristerin]

I love seeing average folks, rallying more average folks and play the big boy games fucking the whole program up.  

 

This will show, I hope, even more people how fickle the stock market is, how manipulated it is, and how much insider trading can and does occur.  This last one is a stretch but let it all play out first.

[WkdPaul]

15 minutes ago, Tristerin said:

I love seeing average folks, rallying more average folks and play the big boy games fucking the whole program up.  

 

This will show, I hope, even more people how fickle the stock market is, how manipulated it is, and how much insider trading can and does occur.  This last one is a stretch but let it all play out first.

 

It's rather sad that they're getting bailed out and that they publicly say that WSB are 'hacking' ... and they're complaining to the SEC that this happened because of market manipulation ! It's as if they can't stand to play the game when they're on the losing side.

[wANKER]

I don't think the decision to block BUY orders was made by the brokers. 

I think they were told to do so - T212's statement kind of hints at the fact it wasn't their call, so everybody gunning for the Likes of Robinhood is probably aiming in the wrong direction. (fuck those guys anyway though )

Either way, the volatility these past few days, illegal tactics and naked shorts is another example of why you shouldn't get into stocks with money you can't afford to lose. 

I'm all for retail traders making $$$$$$$$$$ against pricks in suits, but seeing people dump their savings in @ $350 without fully understanding what's going on makes me shiver 

[Tristerin]

8 minutes ago, wkdpaul said:

 

It's rather sad that they're getting bailed out and that they publicly say that WSB are 'hacking' ... and they're complaining to the SEC that this happened because of market manipulation ! It's as if they can't stand to play the game when they're on the losing side.

Capitalists usually dont like competition

 

One of the business' Ive grown has completely overtaken the Midwest (the gun shows).  At one point I had to travel with my 90 lbs Malinois ($10k dog, police trained in germany in german.) and gun always ready.  Things are REAL in the real world.  The amount of times my lug nuts were loosened on our trucks, the threats, the flat tires, theft, vandalism - we eventually started paying people to watch and record our signs, and property - built enough of a case against the other dominant gun show runner (his people were doing the things) - sent him the videos and told them we would go to the police or they would issue a public apology on facebook for vandalism, etc etc - or we would and prosecute to the furthest extent of the law.

 

They did, and all of those things stopped.

 

BTW they only host 1 show in Missouri now   Chased em out.

 

About to take over the coasts.  Takes letters to runners to either join our cause, or we bring shows to your state and take market share.  We have enough $$$ to completely inundate a market and make them non-profitable to chase them out if we want to.  Or they can start working with our Crypto.

 

Anyhow yes I LOVE seeing people stand up for themselves.  Get with the times Hedge Funds, you arent the only ones in town any longer.

[Kisai]

41 minutes ago, Shreyas1 said:

 

Edit: Oh wow, this goes way deeper than I thought.

 

You know who pays robinhood for user data? Citadel

You know who bailed out Melvin earlier this week? Citadel

 

Now, I'm no conspiracy theorist, but there seems to be a conflict of interest here.

 

TD Ameritrade and Charles Schwab also work with Citadel.

 

I haven't actually tried to buy gamestop, because quite frankly that price isn't even remotely sane. I could see upside for AMC or BB, but not this year, both BB and AMC have been worth more a decade ago than they are now. GME has never been worth more than $70.

 

Disclaimer: I own insignificant amount of BB shares, this is not investment advice.

[Blade of Grass]

10 hours ago, Kisai said:

138% here means that 38% of those shares do not exist (and thus must be a naked short.)

Not true, shares can be borrowed multiple times and shorted multiple times, driving up the short interest. 

i.e. A owns 100 shares and lends them to be shorted, B buys 100 shares from the shorter, B lends 100 shares to be shorted. Short % of float = 200%, but no short was done naked. 

1 hour ago, Shreyas1 said:

Is this legal? I understand its their brokerage but surely something like this is considered market manipulation?

Probably is legal, at least by what the laws currently allow. Brokers ultimately are the managers of risk for their clients, and they have to manage their own risk (otherwise the other  institutions won't work with them, too much counter-party risk). The likelihood too is that the clearinghouses are increasing margin requirements, to ensure the stability of the system, which is trickling down to retail clients. 

[TetraSky]

Glad I sold my AMC stocks yesterday before closure, it was obviously something was going to happen. Only made like $50 on it since I got on that train at $16, but at least I didn't get fucked in the ass by this obvious market manipulation in the after hours and in the morning by blocking trades altogether.

I did lose a bit on NOK though... But only like, $2 per share, at 50 shares, not enormous, yet still $100...

 

The memes cost me $50 I guess, was it worth it just to be part of this stupid thing? Ehh... Not really. Had a good laugh though seeing all those wallstreet people bitching about it on Twitter and the normal folks bitching back at that.

[Kisai]

6 minutes ago, Blade of Grass said:

Not true, shares can be borrowed multiple times and shorted multiple times, driving up the short interest. 

i.e. A owns 100 shares and lends them to be shorted, B buys 100 shares from the shorter, B lends 100 shares to be shorted. Short % of float = 200%, but no short was done naked. 

I suppose that could be true. If it is, that's still manipulating the price.

 

6 minutes ago, Blade of Grass said:

Probably is legal, at least by what the laws currently allow. Brokers ultimately are the managers of risk for their clients, and they have to manage their own risk (otherwise the other  institutions won't work with them, too much counter-party risk). The likelihood too is that the clearinghouses are increasing margin requirements, to ensure the stability of the system, which is trickling down to retail clients. 

Requiring higher margin requirements is reasonable. Blocking buying and hiding stocks? Making them sell only? That's entirely a one-sided trade that benefits Citadel Securities who likely has a large short position on those.

 

https://ca.finance.yahoo.com/news/citadel-securities-reaps-record-6-141313053.html

 

Quote

Citadel Securities estimates that it commands 27% of equity volume market share in the U.S., according to the presentation, up from 21% in 2017. It’s particularly dominant in retail order flow, with 46% of the market.

 

It wouldn't surprise me if Citadel was in fact holding nearly 100% of the retail positions.

[StDragon]

This is how you occupy Wall Street! Squeeze em hard.

[Shreyas1]

Update: If this is true it gets much worse

 

 

[Blade of Grass]

52 minutes ago, Kisai said:

I suppose that could be true. If it is, that's still manipulating the price.

Is it manipulating the price? How is it any different then when you buy a stock? You think something is undervalued so you buy it (which increases demand, and if enough people do the same the price goes up). If you think something is overvalued, you sell it (if you own the share), or borrow shares and sell them (both which increases the supply, and if enough people do the same the price goes down). Shorting is fairly similar to using margin to buy stock--you borrow something, money or shares, use that in the market however you want, to buy or sell, and the price is influenced just the same. 

 

[Blade of Grass]

6 minutes ago, Shreyas1 said:

Update: If this is true it gets much worse

 

 

Sucks, but is in no way unprecedented. If you have a 75% intraday drawdown which violates your risk limits the broker can liquidate your position. It's quite literally in your contract with them. 

[Kisai]

4 minutes ago, Blade of Grass said:

Sucks, but is in no way unprecedented. If you have a 75% intraday drawdown which violates your risk limits the broker can liquidate your position. It's quite literally in your contract with them. 

Well, yeah. If you have any leverage at all, all brokerages can do that. They can't if it's a cash position and you have more cash that can cover the fees. 

 

This is iTrade's:

 

That "we can liquidate or sell assets" statement appears 5 times. https://www.scotiaonline.scotiabank.com/contentdocs/Brokerage/PDF/itrade_terms_relationship_disclosure_en.pdf

 

 

Here's Robinhood's

Also, take a good look at this one:

 

https://cdn.robinhood.com/assets/robinhood/legal/Customer Agreement.pdf

 

They will literately close your account if you harass them in any shape. So, yeah, if you're posting on social media about robinhood, don't be surprised if they close your account on you.

 

[Shreyas1]

10 minutes ago, Blade of Grass said:

Sucks, but is in no way unprecedented. If you have a 75% intraday drawdown which violates your risk limits the broker can liquidate your position. It's quite literally in your contract with them. 

Interesting, though I definitely think there is an ulterior motive here (with Citadel pressuring RH to sell some positions to bring the stock price down).

 

If that gets proven, would it count as market manipulation by citadel?

[steelo]

9 minutes ago, Shreyas1 said:

Interesting, though I definitely think there is an ulterior motive here (with Citadel pressuring RH to sell some positions to bring the stock price down).

 

If that gets proven, would it count as market manipulation by citadel?

They'd have to prove this, which would be difficult. IMO, this was nothing but a hoax to take down the 'big guys' Now, this was not healthy for the stock market but it did have a sense of hilarity.

[Quackers101]

"complains about them doing the exact thing they are doing"... Lets gamble!

Hope they do bitcoins too.

 

also, RUSH STONKS!

[Blade of Grass]

1 hour ago, Kisai said:

Well, yeah. If you have any leverage at all, all brokerages can do that. They can't if it's a cash position and you have more cash that can cover the fees. 

Apparently Robinhood accounts are Reg-T margin accounts by default, so unless a user explicitly disables/opts out...

[Shreyas1]

UPDATE:

 

https://www.ocregister.com/2021/01/28/senate-banking-panel-plans-hearing-amid-gamestop-trading-frenzy/

 

Senate hearing for Robinhood

 

https://www.foxbusiness.com/markets/robinhood-lawsuits-gamestop-amc-restrictions

 

Robinhood lawsuit

 

 

Is this the end for robinhood? Plenty of people are starting to take their business elsewhere as well, and even if robinhood was found to not do anything legal, I don't imagine the public perception and legal fees are going to help them.

[Tristerin]

5 hours ago, Tristerin said:

how manipulated it is, and how much insider trading can and does occur.  

turns out no stretch at all.  RobinHood (laugh) and others are doing all they can to save billionaires their monies. 

[Blade of Grass]

1 hour ago, Shreyas1 said:

UPDATE:

 

https://www.ocregister.com/2021/01/28/senate-banking-panel-plans-hearing-amid-gamestop-trading-frenzy/

 

Senate hearing for Robinhood

 

https://www.foxbusiness.com/markets/robinhood-lawsuits-gamestop-amc-restrictions

 

Robinhood lawsuit

 

 

Is this the end for robinhood? Plenty of people are starting to take their business elsewhere as well, and even if robinhood was found to not do anything legal, I don't imagine the public perception and legal fees are going to help them.

They seem to be in a pretty bad spot financially at the moment too, guess their risk-management moves earlier today make sense. (and I called it )

 

Quote

As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits... this was a risk-management decision, and was not made on the direction of the market makers we route to.

https://blog.robinhood.com/news/2021/1/28/an-update-on-market-volatility

 

Looks like they're having significant funding issues, which makes sense to hear this:

https://www.bloomberg.com/news/articles/2021-01-28/robinhood-is-said-to-draw-on-credit-lines-from-banks-amid-tumult?sref=sZVE7m7d

 

[Shreyas1]

10 minutes ago, Blade of Grass said:

 

Eh, I'd take that with a grain of salt seeing as RobinHood would never just say that they wanted to save their clients. While there is no concrete proof, there's no way they made that decision without also thinking of Citadel. Maybe they were going to do it anyways though

 

Regardless, this hurt them pretty badly.