Reply to Robin Hood just ended trading on GameStop and AMC

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Is there any possibility that the Russians were behind this assault on our financial institutions and free market?[/quote]

No.  There's been no assault on either our financial institutions or the free market.  What has happened is not unusual.  It is only considered unusual because messageboard normalsmdiscovered it.  Most of the money pushing things higher is from institutions and market makers not reddit users.

At this point our pension funds and 401ks are the main beneficiaries of the squeeze.[/quote]
Also abnormal is only partially suspending trading to drive toward a specific market outcome. I would have less issues if RH just suspended GME trading altogether. What they did seems really corrupt to me.[/quote]
Thank you for your replies! [/quote]

They didn't suspend sales because it could cause their customers to take losses, and for some to face margin calls as well.  They did the lightest possible intervention they could come up with.

WSB redditors who seem so "knowledgeable" about gammas and deltas somehow missed the basic fact that RH is putting cash up front to settle transactions.  They have regulatory requirements to meet on that because if they go too low, transactions could fail and the market falls apart.  What you do *now* takes 2 days to settle.  It takes time for money to hit accounts.  Sometimes people buy using profits from sales that haven't settled.  Sometimes people buy nonmarginable items out of marginable accounts.  Sometimes one party doesn't come up with the stock.  Most of the time it goes well, but what's happening with GME is hardly "most of the time".

If t there is a legitimate concern it is that RH is a janky startup that doesn't have the resources to handle such a spike in trading volume.  You get what you pay for, which is currently $0 per transaction. Put the tinfoil hats away people.[/quote]
Overall, suspending trading altogether would have been less distortionary than what they did. It's debatable which is the "lightest possible intervention", if you are looking at impact.[/quote]

Yes but RH doesn't control that!  If they stopped all trades, but NYSE kept going[b], the price would drop[/b] and you wouldn't be able to sell.  [/quote]

You mean price would go up.  [/quote]

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