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Don't allow the big players to continue trading any way they want while restricting small investors to selling only would be a good start.
If you want a full break down of what else needs to happen to regulate the financial markets then we might be here for a while.
No shorting allowed? What rules are to be changed?
You don't need to change any rules. I have a feeling that, in the relatively near future at least, hedge funds will have the possibility of this in their minds when they are tempted by aggressively shorting a stock.
It was only the ridiculous level of shorting by one single entity (based on greed and no likely consequences) that drew the attention of those who started this rolling on Reddit. I'm sure the sneaky bastards will find a way to be less obvious and disguise their exposure at some point.
The threat of regulation is pretty mild for these muppets, but the idea that there might actually be financial consequences is more potent.
I do understand the angsty Millenial complaints about big finance, but otoh what is the formal demand? No shorting allowed? What rules are to be changed?
You could start with how on earth a 140% short even came to be, after 2008 (in which they were bailed) you'd think this would be somewhat regulated. In addition, the characterisations you make are wrong, the millennials saw their parents (and friends and family members) get crushed by the 2008 bust(without any repercussions towards this recklessness), and a "cool" president, all but refuse to investigate.
Even Google has been drawn into the cluster ****!
https://interestingengineering.com/google-saves-robinhood-deletes-thousands-of-negative-reviews
Yet most of the retail-investors on Reddit are using leverage on their bets. Are we to ban leverage, or just when its the 'greedy hedge funds' using it?
You have a much higher degree of trust in the current capitalist system than most people do, you realise that? Bordering on naive, I would say.
It's not perfect, but it works reasonably well.
Until someone comes up with a better system, I'm happy to keep using it.
If you want to call that naive, by all means fill your boots.
Indeed, one gets the impression some people want the markets regulated by a totalitarian tribunal making arbitrary decisions on what investments are moral and what aren't!
Yet most of the retail-investors on Reddit are using leverage on their bets. Are we to ban leverage, or just when its the ‘greedy hedge funds’ using it?
HFs don't use margin trading, they bet their own / investors money.
Day trading apps aimed at retail investors (in the US at least) seem keen on margin trading, but it's probably not very healthy as it amplifies peaks and troughs. It allows you to buy with money you don't have and then they will automatically sell your stock when the price falls, so you have a gearing in both directions.
Add this to herd mentatility and an emotive story 'lets stick it to the evil HFs' etc and look what a mess you end up with...
Indeed, one gets the impression some people want the markets regulated by a totalitarian tribunal making arbitrary decisions on what investments are moral and what aren’t!
I think most people just want to see a fair system where the risks and opportunities are shared equally.
But you crack on with your hysteria if it makes you happy.
It’s not perfect, but it works reasonably well.
Until someone comes up with a better system, I’m happy to keep using it.
If you want to call that naive, by all means fill your boots.
Its not perfect, hence it can get some improvements, and punish excessive recklessness, when it may be the taxpayers that have to foot the bill.
Indeed, one gets the impression some people want the markets regulated by a totalitarian tribunal making arbitrary decisions on what investments are moral and what aren’t!
From where? Please point at a specific post.
HFs don’t use margin trading, they bet their own / investors money.
Please supply quote or reference on this?
You have a much higher degree of trust in the current capitalist system than most people do, you realise that? .
If I recall correctly footflaps has made some serious cash by some very adept investing in the SM over the years. ( And all credit to him for this) So it's no great surprise he has that trust.
Bordering on naive, I would say
No, see above. I don't think he is at all naive about it. He knows shit loads. But perhaps has a different opinion and viewpoint to you and me.
what is the formal demand? No shorting allowed? What rules are to be changed?
All people want is a level playing field. When the man in the street screws up and loses his shirt, he has to accept it. When the hedge funds and banks screw up, as in 2008 and now, they expect to be protected from their stupidity and bailed out, usually at the cost of the man in the street. It's corrupt, criminal, and indefensible.
No, see above. I don’t think he is at all naive about it. He knows shit loads. But perhaps has a different opinion and viewpoint to you and me.
You can be naive and quite financially astute.
For example, it's possible to buy very cheap goods and just think you are getting a good deal because you are naive. People who aren't naive realise that the reason they can get such cheap clothes is because they are produced by borderline slave labour.
On the other hand, you might know but just not care.
Footflaps might well be correct in that this is all going to blow up in the small investors faces and there never was any naked shorting but he has no way of knowing that yet. Guess we'll all find out over the next week or two.
Hedge Funds generally don't get bailed out with public money although private bailouts have been organized where there is systemic risk - LTCM being a well known example. An awful lot of hedge funds go bust, but this rarely get reported and indeed isn't fully taken into account in the published sector returns - hence the common accusation of survivorship bias in the figures.
The price is up 100% currently in pre-market trading, I hope the market opens like that and there's not a sudden drop before!
It’s not perfect, but it works reasonably well.
For a vanishingly small part of society, who are largely insulated from any decisions (good or bad) they make. For the rest of society it can be a bloody disaster
NYSE opens and the price is up!
To paraphrase something from Twitter - Capitalism works very well. For those with capital.
70% for me. it's been suspended on etoro aready
It will end in tears
what is the deal with pre-market trading? Does the trade actually occur or are you just tee-ing it up for immediately when the market opens?The price is up 100% currently in pre-market trading
plummeting...
and then recovering!
Gah - I had Take Profits set at $390 and they didn't execute (even though it went over that), I ended up having to sell via a Stop Loss at $333 before they finally sold through eToro. Still that means by $1000 investment last night just made $600 and cashed it out now so the $500 still invested is covered and I can afford to let it sit. It's just whether I'm tempted to play the rollercoaster price again or not now :p
Just to annoy footflaps. 🙂
<p dir="ltr" lang="en">WE'RE GOING ON A TRIP ON OUR GREAT BIG ROCKET SHIP!</p>
TO THE MOOOOOOOOON 🚀$AMC $GME $NAKD $DOGE #DOGE pic.twitter.com/ITvzkfK2vb— Curtis Strickland (@TheStricklander) January 29, 2021
Not if the FAA don't grant approval , you're not.
Just to annoy footflaps.
Fraid you'll need to try a bit harder.
I just offer a counter weight to the very one sided 'we're sticking it to the man by playing his game and helping them generate revenue by using their platforms. That will show them, you'll see they'll be on their knees, we just need to buy more GameStop shares. Then the government will fall and it will all be a beautiful utopian socialist free world....' etc etc
Kraken has fallen over now, unprecedented number of authentication requests apparently.
For a vanishingly small part of society, who are largely insulated from any decisions (good or bad) they make. For the rest of society it can be a bloody disaster
You really have no idea....
The markets collectively move trillions around the globe every day, affecting every one of us. Just because you don't have GameStop shares or use RobinHood doesn't mean you're not affected. They raise capital for pharmaceutical companies who make vaccines etc etc.
Currently, every month HMG goes cap in hand to the markets to borrow £30b or so to cover the monthly deficit so it can keep funding the NHS etc. Pretty sure that affects most people in the UK...
You really have no idea….
I know exactly how it works, but thanks for the condescension, by by your “explanation” it would appear you’ve drunk the kool-aid. I’m clearly wasting my breath
I just offer a counter weight to the very one sided ‘we’re sticking it to the man by playing his game and helping them generate revenue by using their platforms. That will show them, you’ll see they’ll be on their knees, we just need to buy more GameStop shares. Then the government will fall and it will all be a beautiful utopian socialist free world….’ etc etc
Wrong. If anything r/Wallstretbets are capitalists, and so are many of the people supporting it. What they've done is taking advantage of a somewhat ludicrous situation(compounded with which at the start was arguably a good business case). This has already attracted the attention of the media and US Politicians, a topic that until now due to political donations at both political spectrums, appeared to be taboo.
The stock price seems much more stable so far today (which means no rollercoaster fun) 🙁
Currently, every month HMG goes cap in hand to the markets to borrow £30b or so to cover the monthly deficit
You really have drank the kool aid haven't you? The government doesn't go cap in hand to the markets to fund deficits. The govt provides low interest saving accounts to the market so that they have a safe haven for their money. The markets will always take up the opportunity because where else are the going to put it? They're so desperate to do this they'll even accept negative interest rates and pay the govt to take their money. The way you describe it, the markets are doing the govt a favour by bailing it out when in fact it's the other way round.
The stock price seems much more stable so far today (which means no rollercoaster fun) 🙁
feels like the calm before the storm
Am I the only person who worries that mad speculation on things that are essentially worthless often bodes ill?
Am I the only person who worries that mad speculation on things that are essentially worthless often bodes ill?
Not at all, dear chap.
Incidentally, I have £10,000 that I'd like to invest in tulips. You don't know anyone who's selling, do you?
Am I the only person who worries that mad speculation on things that are essentially worthless often bodes ill?
No, yet we have based the whole western economy on it. So better to just trust the professional market manipulators and not expose the systemic corruption of the system.
The tulip festival is a boring argument more people probably lost out on the railroad building scam. but I'm pretty sure the 19.45 to Manchester will arrive.
the stock market is a fixed betting syndicate it's crazy that we have built our entire lifeblood round it.
Some of the libor perps get out of jail soon and most of those where simply fall guys who got thrown under the bus.
https://www.bloomberg.com/news/articles/2021-01-29/libor-trader-tom-hayes-set-for-release-after-nearly-six-years
Am I the only person who worries that mad speculation on things that are essentially worthless often bodes ill?
The WSB folks are fairly clear that they expect to not make money on this, that's not the point. However I suspect they may also have attracted a lot of people who think that the gains they are seeing can be cashed out. Possibly for those that do it now but a lot of folks are in for a disappointment. Not the main WSB people who understand what is happening and can tell the difference between what the screen says and what is in their bank
The WSB folks are fairly clear that they expect to not make money on this
Not sure that's the case. For a lot of small investors they don't have enough in to care. Others have already made huge amounts, and some are holding out in the hope the squeeze happens and they cash in at the expense of the hedge funds. The whole point is that they screw the hedge funds by making money from them. There's a high risk it won't work and they'll lose their cash, but it's a risk they seem willing to accept.
Like I said earlier, you'd need to be bloody idealistic and have either balls of steel or enough cash bunkered elsewhere if you're seriously playing this game.
For me, and I guess many others, the temptation to cash in and walk away with a tidy sum would be too great. Even if only a minority do so then it kinda scuppers the initial plan of WSB if people start selling their stock.
A life changing sum with enough start up capital to seriously start investing and making the money work for you or a side note in the story of that one time the plebs/retards/autistics (whatever it is the redditors call themselves) took on Wall Street.
I know what I would do/have done.
I dabbled in this to make a couple of hundred. Friends in an investment chat group have gone in quite big, recouped their original investment, now just "sitting on the rocket ship" waiting to take off and screw the hedge funds despite being able to take thousands out if they wanted. They'll maybe get lucky and choose their moment right but also knowing at some point it's going to have to crash.
"despite being able to take thousands out if they wanted"
But what if the trading platform they used decided to suspend selling of the stock /options?
I think if I am interpreting what footflaps has been saying above is, although MORALLY not necessarily fair, all of the trading platforms /intermediaries have their own Ts and Cs that allow them to change all sorts of things that the small punter can or can't do.
Not the same situation but,
Say you found a way of winning black jack at a casino. Very quickly after a few grand of wins you can be sure some guy in a dinner jacket would politely ask you to leave the premises..
DenDennis
Free MemberNot the same situation but,
Say you found a way of winning black jack at a casino. Very quickly after a few grand of wins you can be sure some guy in a dinner jacket would politely ask you to leave the premises..
Sure, but I'd say this is more analogous to waiting til the middle of a hand of poker then suddenly telling the player how they can bet.
Or telling you halfway through a blackjack hand that you could only stick or fold.
Both agreed on the casino points and both MORALLY unfair and against the casino Ts and Cs no doubt, but is it against the LEGAL agreement between user and stock market intermediary?
Both agreed on the casino points and both MORALLY unfair and against the casino Ts and Cs no doubt, but is it against the LEGAL agreement between user and stock market intermediary?
terms and conditions only go so far. It is likely that, in this case the fines for the BS they pulled is much less than their major customers (Citadel) stand to lose or gain.