Stock Market discussion

[OneMoreRep]

Man, the Dow Jones, S&P 500, Nasdaq, Russell 2000 & 3000 ALL got hit on the balls today.

Cold blooded..

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[El Diablo Blanco]

Man, the Dow Jones, S&P 500, Nasdaq, Russell 2000 & 3000 ALL got hit on the balls today.

Cold blooded..

"1"

Yup. They want to blame Reddit for it. Make them out to be villains.

[Flexacon]

I don't think people are grasping how huge this reddit/gamestop thing could be. A modern day version of tulip mania!

[OneMoreRep]

Yup. They want to blame Reddit for it. Make them out to be villains.

Hey, while I still have you on the phone, let me run something by you and everyone else that has an active hand in the market.

Here's a theory from a buddy of mine that works at one of the big hedge funds regarding what went down with Robinhood. He believes Robinhood shut down trading for a good reason. Not the reason being advertised, but instead a much more sinister reason.

In order:

• Robinhood runs all their trades through Citadel. Citadel, in turn, has been making a shitload of money by frontrunning on all of the trades they do, since they see what's coming in and going out via Robinhood (they can capitalize on all this activity by predicting what will rise versus fall).
• But then all of a sudden Citadel goes long on Gamestop and simultaneously Melvin Capital starts to get crushed badly, which results in Melvin Capital going to Citadel asking for money.
• Citadel in turn puts $2.7Billion dollars into Melvin Capital AND then turns around and tells all of its retail traders (the average person using Robinhood) that Citadel is now on the other side of this trade equation and are stuck shouldering the burden of trying to bail Melvin Capital out, so the retail traders are told to stop their shit in order to let this shit simmer out.

Thoughts? And of course this theory is open for discussion to everyone.

The rich stick with the rich. There's no one coming to save the poor.

"1"

[Thin Lizzy]

Not good news...not good news at all.

When the market has a bull run as has been the case since last Spring, people forget the market can actually go down and real fast.

That said, it’s only 4% off the all time high and still 10% above the 200 day moving average. So, currently the longer trend is still up.

[El Diablo Blanco]

The scary thing about these apps like Robinhood is that once the ground breaks beneath the market, good luck selling quickly.  They will collapse under heavy volume.  You are essentially kissing your money goodbye.

[SOMEPARTS]

There's a lot of whistling past the graveyard going on right now.

They've been putting off a 40% drop for a while now IMO.

[FitnessFrenzy]

[efanhowz]

I think I read that the WSB has 3 million members.

If they pooled money, stuck together, and have Elon Musk and the Chewy.com owner on board they could pull this off.

They higher GameStop climbs, the higher they can buy on margin.

1.8 million members before the spotlight was put on them this past week.

[FitnessFrenzy]

I love these Reddit guys!   

I now (finally) understand exactly what they did. 

True getbig caliber individuals.

agreed

[Hulkotron]

Hey, while I still have you on the phone, let me run something by you and everyone else that has an active hand in the market.

Here's a theory from a buddy of mine that works at one of the big hedge funds regarding what went down with Robinhood. He believes Robinhood shut down trading for a good reason. Not the reason being advertised, but instead a much more sinister reason.

In order:

• Robinhood runs all their trades through Citadel. Citadel, in turn, has been making a shitload of money by frontrunning on all of the trades they do, since they see what's coming in and going out via Robinhood (they can capitalize on all this activity by predicting what will rise versus fall).
• But then all of a sudden Citadel goes long on Gamestop and simultaneously Melvin Capital starts to get crushed badly, which results in Melvin Capital going to Citadel asking for money.
• Citadel in turn puts $2.7Billion dollars into Melvin Capital AND then turns around and tells all of its retail traders (the average person using Robinhood) that Citadel is now on the other side of this trade equation and are stuck shouldering the burden of trying to bail Melvin Capital out, so the retail traders are told to stop their shit in order to let this shit simmer out.

Thoughts? And of course this theory is open for discussion to everyone.

The rich stick with the rich. There's no one coming to save the poor.

"1"

This blog (oh brother) explains what I think probably happened:

https://joelx.com/why-robinhood-stopped-trading-on-gme/16214/

He suggests that Robinhood and other brokers stopped allowing users to buy GME because the SEC says deliberately creating a short-squeeze (no homo) is illegal, and their legal teams may have been advising them they were at risk for litigation if they allowed this activity on their platform.  Seems possible but then they opened it back up the next day, so I doubt this was the case.

His second argument, which I'm not sure I'm understanding correctly, is that if buying had remained unrestricted, the price of GME could have soared so high so quickly that traders with call options at a lower price would have been owed so much money that Robinhood would likely have been bankrupt.  This seems more likely to me, and more likely than some firm pressuring them into it to avoid losses.

I'm not a financial advisor but am a bodybuilder and so have credibility on these topics.

[SOMEPARTS]

This blog (oh brother) explains what I think probably happened:

https://joelx.com/why-robinhood-stopped-trading-on-gme/16214/

He suggests that Robinhood and other brokers stopped allowing users to buy GME because the SEC says deliberately creating a short-squeeze (no homo) is illegal, and their legal teams may have been advising them they were at risk for litigation if they allowed this activity on their platform.  Seems possible but then they opened it back up the next day, so I doubt this was the case.

His second argument, which I'm not sure I'm understanding correctly, is that if buying had remained unrestricted, the price of GME could have soared so high so quickly that traders with call options at a lower price would have been owed so much money that Robinhood would likely have been bankrupt.  This seems more likely to me, and more likely than some firm pressuring them into it to avoid losses.

I'm not a financial advisor but am a bodybuilder and so have credibility on these topics.

It is absolutely the latter of the two.

[SOMEPARTS]

Wall Street Bets sub-reddit has added 500k accounts. It's being called a distributed hedge fund, which is interesting. The action being taken is basically like a DDOS attack on these hedge funds that are heavily shorted by a bunch of small accounts.

[SOMEPARTS]

What is going on here is much more interesting to me than crypto. This is the reason the billionaire class want to control speech/internet access and steer information through paid media. They fear the torches and pitchforks.

[El Diablo Blanco]

This blog (oh brother) explains what I think probably happened:

https://joelx.com/why-robinhood-stopped-trading-on-gme/16214/

He suggests that Robinhood and other brokers stopped allowing users to buy GME because the SEC says deliberately creating a short-squeeze (no homo) is illegal, and their legal teams may have been advising them they were at risk for litigation if they allowed this activity on their platform.  Seems possible but then they opened it back up the next day, so I doubt this was the case.

His second argument, which I'm not sure I'm understanding correctly, is that if buying had remained unrestricted, the price of GME could have soared so high so quickly that traders with call options at a lower price would have been owed so much money that Robinhood would likely have been bankrupt.  This seems more likely to me, and more likely than some firm pressuring them into it to avoid losses.

I'm not a financial advisor but am a bodybuilder and so have credibility on these topics.

Theoretically as long as the stock goes up and people don’t sell they could Continue buying on margin driving the price so high that it would crash all banks. Robinhood was already struggling to cover and needed a billion $ the other night from investors in risk of imploding.  Which is why I was saying that if a massive sell off comes they apps like robinhood will freeze people out and they’ll lose it all. 

[Les Grossman]

Theoretically as long as the stock goes up and people don’t sell they could Continue buying on margin driving the price so high that it would crash all banks. Robinhood was already struggling to cover and needed a billion $ the other night from investors in risk of imploding.  Which is why I was saying that if a massive sell off comes they apps like robinhood will freeze people out and they’ll lose it all.

Robinhood and others just like them are freezing people out by only allowing the purchase of one share at a time.

I think people are focusing on this at the micro level (GME) and maybe should look at the macro level.

Wall Street insiders shorted the U.S. economy based on insider information and some expected series of events, for example:

Crush economy with the pandemic under Trump, short the stocks affected the worst, buy back at bottom, lift Covid restrictions and market recovers.

Crush economy under Trump, short stocks, a Biden win, lift COVID restrictions, buy back before economy recovers.

Crush economy under Trump, short the stocks, a Biden win, keep Covid restrictions, Biden tanks economy, short even more, buy back years from now when economy recovers.

Some big money insiders (Musk, Buffett, Soros, Bloomberg?) have seen the trend of shorting and are now positioned to squeeze the shorts for their own gain. The don’t worry about the absolute downside because the government will bail out the hedge fund bankruptcies.

The only thing different this time is John McCain won’t be around to carry water for the crooked insiders.

[Thin Lizzy]

Wall Street Bets sub-reddit has added 500k accounts. It's being called a distributed hedge fund, which is interesting. The action being taken is basically like a DDOS attack on these hedge funds that are heavily shorted by a bunch of small accounts.

The end result is probably going to be a new generation of noobs getting into the stock market, as a result of this so-called David and Goliath story, and getting worked as they always do.

[Les Grossman]

The end result is probably going to be a new generation of noobs getting into the stock market, as a result of this so-called David and Goliath story, and getting worked as they always do.

They are possibly going to institute sell limits at closing price + 50% to keep this thing under control. It was literally minutes if not seconds from going logarithmic Wednesday night. If the squeeze actually does go into full effect it could take the whole market down. Imagine the iterative loop it will cause on the stock price, and thus on the amount of money the shorts will need to have to buy shares. If mine sells at $5000, the public stock price will reflect that, you see it and sell yours at $7500, the stock price jumps, your friend sees that and sells his at $10,000, and so on and so on... that money has to come from somewhere and it will be banks and the hedge funds liquidating their other holdings, thus tanking the market.

The insiders are going to pursue getting some kind of relief on the interest rates they're paying for not returning the stock, otherwise that $20 million per day fee they're paying now will just keep getting higher and higher and higher. That ends in virtually the same results as the short squeeze, just over a longer period of time.

And remember, “we the people” have all the shares and really have no incentive to sell! This could go on forever. Robinhood now has restrictions on as many as 50 stocks, including things like Tootise Roll and Rolls Royce. Their Terms of Service state “okay trade day + 2 biz days” to settle. If everyone liquidated their RH holdings Thursday morning, Monday\Tuesday is going to be a disaster like no one has seen since the Great Depression. You'll have millions of people trying to transfer their money from RH to their bank accounts. RH already raised almost $1 billion Thursday night to cover Wed/Thurs, because they didn't have enough capital to process the trade action.

So, layer that on top of the GME/AMC short saga, and its just going to be crazy. At this point, I'm just hoping people get their money out of RH by Wednesday before they go bankrupt. Any holdings left in RH (GME, AMC and GNUS bleh haha) will still be held by name and can be transferred out, but the cash...no one knows what will happen.

YMMV...consult with a financial professional 😉 yadda yadda yadda.

[TheGrinch]

#GME GO BRRRR

[FitnessFrenzy]

[Bindare_Dundat]

Not verified as far as i know. 

Is Jen Psaki's Brother the Lead Trader at Citadel? Conspiracy Theory Links White House to Robinhood

As social media has been swarmed with information surrounding the GameStop controversy, a new claim attempting to link White House Press Secretary Jen Psaki to the stock trading platform Robinhood.

A Reddit user pushed the claim that Psaki had a brother who worked for Citadel LLC – the capital firm facing accusations of manipulating the market and forcing Robinhood to restrict trading activity for GameStop and other stocks that experienced an improbably rally thanks to Redditors who took on Wall Street's biggest players.



A Twitter user also shared an excerpt from an article on Citadel's plans to hire three new staffers as part of a revamp of its investment unit and cites Jeff Psaki as one of the employees.





Regarding Treasury Secretary Yellen and her receiving speaking engagements to hedgfund Citadel to the amount of almost a million dollars.
 
18:37

[Hulkotron]

Jen Psaki WYHI?

[OneMoreRep]

His second argument, which I'm not sure I'm understanding correctly, is that if buying had remained unrestricted, the price of GME could have soared so high so quickly that traders with call options at a lower price would have been owed so much money that Robinhood would likely have been bankrupt.  This seems more likely to me, and more likely than some firm pressuring them into it to avoid losses.

I can see where that postulation would make sense. Being that this was a concerted effort by millions of retail traders, people (certainly within that REDDIT community and beyond) saw this coming for days. Those that were not part of that original REDDIT group might have not gotten in at the lowest purchase price, but they could have still purchased call options (albeit at a shitty option premium) and still found themselves in the money for a decent sell out. Granted, with short-term capital gains taxes + premiums, they would have likely needed to be up by a decent margin of percentage points before they could even break even let alone make serious money, but seeing how astronomically high GME prices soared, I wouldn't be surprised if there were a solid number of overnight millionaires. Still, to the point made by that blog, if Robinhood (or Citadel) couldn't foot the bill by paying out the sellers who exercised their options, it could have (in theory) driven the company bankrupt.

But even so, I don't believe this is a GOOD ENOUGH reason to halt trading. If anything, I think that's very much an illegal tactic, as you're interrupting people from a 24-hr period of potential profits. Fortunes can change in a matter of minutes, imagine within a full day of trading. When it doesn't benefit the dirty rich hedge funds, but instead aids the dirty poor, they can just arbitrarily freeze all purchasing of shares to give the hedge funds a chance to catch their breaths?? And yes, I can see where this way a modern day example of a reverse PUMP-&-DUMP by the poor to upset the rich, but if the idea of a well-orchestrated pump-&-dump along the lines of what Bill Ackman did not so long ago is ALLOWED by the SEC and Federal Government, I can't see why the average man can be given the same courtesy. Alas, I figure that they will find new ways to regulate trade from stopping this exact episode from occurring again. Likely, the regulation will fuck the poor over and not really affect the rich, as with most things.

That's a lesson for all of you that actively trade in the market. For as long as I've been familiar with the market, one thing has always been certain, the market is rigged to help the rich and fuck the poor.

"1"

[Les Grossman]

I can see where that postulation would make sense. Being that this was a concerted effort by millions of retail traders, people (certainly within that REDDIT community and beyond) saw this coming for days. Those that were not part of that original REDDIT group might have not gotten in at the lowest purchase price, but they could have still purchased call options (albeit at a shitty option premium) and still found themselves in the money for a decent sell out. Granted, with short-term capital gains taxes + premiums, they would have likely needed to be up by a decent margin of percentage points before they could even break even let alone make serious money, but seeing how astronomically high GME prices soared, I wouldn't be surprised if there were a solid number of overnight millionaires. Still, to the point made by that blog, if Robinhood (or Citadel) couldn't foot the bill by paying out the sellers who exercised their options, it could have (in theory) driven the company bankrupt.

But even so, I don't believe this is a GOOD ENOUGH reason to halt trading. If anything, I think that's very much an illegal tactic, as you're interrupting people from a 24-hr period of potential profits. Fortunes can change in a matter of minutes, imagine within a full day of trading. When it doesn't benefit the dirty rich hedge funds, but instead aids the dirty poor, they can just arbitrarily freeze all purchasing of shares to give the hedge funds a chance to catch their breaths?? And yes, I can see where this way a modern day example of a reverse PUMP-&-DUMP by the poor to upset the rich, but if the idea of a well-orchestrated pump-&-dump along the lines of what Bill Ackman did not so long ago is ALLOWED by the SEC and Federal Government, I can't see why the average man can be given the same courtesy. Alas, I figure that they will find new ways to regulate trade from stopping this exact episode from occurring again. Likely, the regulation will fuck the poor over and not really affect the rich, as with most things.

That's a lesson for all of you that actively trade in the market. For as long as I've been familiar with the market, one thing has always been certain, the market is rigged to help the rich and fuck the poor.

"1"

Well we know one thing now.

The next coronavirus relief won’t be sent out as checks, it will definitely be sent as debit cards.

[OneMoreRep]

Well we know one thing now.

The next coronavirus relief won’t be sent out as checks, it will definitely be sent as debit cards.

Expand on this so that I can follow more clearly..

Postulation on my part... You believe debit cards as a response to this recent short squeeze in order to make sure that federal reserve money isn't used to squeeze the rich? Thereby, mostly limiting use for food and the paying of bills by way of restriction to debit card use with possibly no option to pull out hard cash?

I lean on this theory, because a lot of those REDDIT members were supposedly not very well off (many making less than $40k/year) and so I can see where some of the recent stimulus money could have been used to purchase GME stocks. Making wealth off of free money (that's rich).

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