this really has people panicking Charles Schwab out here sending me emails basically telling me to remain calm...lol
The elites don't need to lose. The little guy just needs a chance. And the current model is built to entrap the little guy. All banks do is insure each other against losses. The stimulus handouts have given retail investors a war chest to fight against big money. And its paying off. Gamestop was profitable but Melvin was trying to force them into bankruptcy. AMC is another good company. They are struggling with the pandemic and the vultures circled to finish it off. This has brought forth a lot of transparency that most people have come to accept and ignore. Banks are greedy and rich and they can't be beat. They don't understand why and they have capitulated. Now they are seeing the light. This is why Bitcoin has become very popular. You can't over leverage Bitcoin. There is no central bank who is going to print/mine and flood the market with Bitcoin to cover high risk losses.
My dad is the little guy and will retire a millionaire because of prudent inventing, like maximizing 401ks and a diverse portfolio. Have you heard of the book The Millionaire Next Door. It's pretty clear folks think it's like Hollywood with big swings and big gambles. And you are getting swept in the mania and lost sight. Yea no...... In the context of Robinhood and Citadel this was all known to people that cared about how things work. The problem is people are lazy and greedy and don't really think "why are trades free".... "why is google maps free"..... "why is facebook free"...... and yet we still use it and b**** about it. Bitcoin.... I won't go there. I'll just say there's clearly something psychology about "taking on the man" when really you are just helping out ruthless dictators launder money.
Also saw today that the top 3 lawyers on the RH payroll are all former top officers in the SEC. Ya no conflict of interest at all between the govt and Wall Street. Paying close attention to ALL elected officials and their comments. This certainly seems alarming.
That Katie Pavlich BS is just that...BS. Warren isn't going after the reddit users, she's standing on her exact same moral footing that market manipulation is bad. She's against it by everyone because market volatility is bad for people who aren't the ones taking profits and it puts actual employees of companies at risk.
Warren is going after SHORT SELLERS - nowhere else can you trade or sell something you don't own......it is a practice that should be culled. DD
No..... Are you trying to semantics you way out of this? Technically it is accounting related, just not the "industry standard".
I mean counterparty risk seems to be the most logical reason why some brokers stopped allowing certain stocks while others were able to plug along. From a bloomberg columnist I follow: Why did Robinhood stop them? You don’t think about it much, but every stock trade involves an extension of credit. You see a price on the stock exchange and push a button and instantaneously get back a confirmation that you bought some shares of stock, but you actually get the shares, and pay the money for them, two business days later. This is called “T+2 settlement,” and it might seem a little silly in an age when a “share of stock” is an entry in an electronic database and “money” is also an entry in an electronic database. Why not just update the databases when you push the button? T+2 settlement feels like a vestige of the olden days, when traders agreed to trades on the stock exchange but then had to go back to their vaults to dig up stock certificates to hand over in exchange for sacks of cash. Back when I worked on Wall Street it was T+3. These days it is not hard to find people who want to talk to you about moving to instantaneous settlement on the blockchain. Bitcoin trades settle immediately. But U.S. stocks, for now, settle T+2. This means that the seller takes two days of credit risk to the buyer.[4] I see a stock trading at $400 on Monday, I push the button to buy it, I buy it from you at $400. On Tuesday the stock drops to $20. On Wednesday you show up with the stock that I bought on Monday, and you ask me for my $400. I am no longer super jazzed to give it to you. I might find a reason not to pay you. The reason might be that I’m bankrupt, from buying all that stock for $400 on Monday. The way that stock markets mostly deal with this risk is a system of clearinghouses. The stock trades are processed through a clearinghouse. The members of the clearinghouse are big brokerage firms—“clearing brokers”—who send trades to the clearinghouses and guarantee them. The clearing brokers post collateral with the clearinghouses: They put up some money to guarantee that they’ll show up to pay off all their settlement obligations. The clearing brokers have customers—institutional investors, smaller brokers—who post collateral with the clearing brokers to guarantee their obligations. The smaller brokers, in turn, have customers of their own—retail traders, etc.—and also have to make sure that, if a customer buys stock on a Monday, she’ll have the cash to pay for it on Wednesday.[5] This is not stuff most people worry about most of the time. Generally if you buy a stock on Monday you still want it on Wednesday; even if you don’t, we live in a society, and you’ll probably cough up the money anyway because that’s what you’re supposed to do. But at some level of volatility things break down. If a stock is really worth $400 on Monday and $20 on Wednesday, there is a risk that a lot of the people who bought it on Monday won’t show up with cash on Wednesday. Something very bad happened to them between Monday and Wednesday; some of them might not have made it. You need to make sure the collateral is sufficient to cover that risk. The more likely it is that a stock will go from $400 to $20, or $20 to $400 for that matter,[6] the more collateral you need. Anyway why did Robinhood (and other retail brokers) shut down purchases of GameStop (and other meme stocks)? Here is a good explanation from Bloomberg News: One key consideration for brokers, particularly around high-flying and volatile stocks like GameStop, is in the money they must put up with the DTCC while waiting a few days for stock transactions to settle. Those outlays, which behave like margin in a brokerage account, can create a cash crunch on volatile days, say when GameStop falls from $483 to $112 like it did at one point during Thursday’s session. “It’s not really Robinhood doing nefarious stuff,” said Bloomberg Intelligence analyst Larry Tabb. “It’s the DTCC saying ‘This stuff is just too risky. We don’t trust that these guys have the cash to be able to withstand settling these things two days from now, because in two days, who knows what the price could be, it could be zero.’” The trouble on Thursday began around 10 a.m., when after days of turbulence, the DTCC demanded significantly more collateral from member brokers, according to two people familiar with the matter. A spokesman for the DTCC wouldn’t specify how much it required from specific firms but said that by the end of the day industrywide collateral requirements jumped to $33.5 billion, up from $26 billion. Brokerage executives rushed to figure out how to come up with the funds. Robinhood’s reaction drew the most public attention, but the firm wasn’t alone in limiting trading of stocks such as GameStop and AMC Entertainment Holdings Inc. In fact, Charles Schwab Corp.’s TD Ameritrade curbed transactions in both of those companies on Wednesday. Interactive Brokers Group Inc. and Morgan Stanley’s E*Trade took similar action Thursday. And here is the Wall Street Journal: At least three brokerages said the trading restrictions stemmed from mandates from their clearing firm, which process the securities on the back end after a user executes a trade with their brokerage. Webull Chief Executive Anthony Denier said his platform’s clearing firm, Apex Clearing Corp., notified him Thursday morning that Webull needed to shut off the ability to open new positions in certain stocks. Otherwise, Apex wouldn’t be able to settle the trades, he said. ... Mr. Denier at Webull said the restrictions originated Thursday morning when the Depository Trust & Clearing Corp. instructed his clearing firm, Apex, that it was increasing the collateral it needed to put up to help settle the trades for stocks like GameStop. In turn, Apex told Webull to restrict the ability to open new positions in order to prevent trades from failing, Mr. Denier said. DTCC, which operates the clearinghouses for U.S. stock and bond trades, is a key part of the plumbing of financial markets. Usually drawing little notice, it facilitates the movement of stocks and bonds among buyers and sellers and provides data and analytics services. In a statement, DTCC said the volatility in stocks like GameStop and AMC has “generated substantial risk exposures at firms that clear these trades” at its clearinghouse for stock trades. Those risks were especially pronounced for firms whose clients were ”predominantly on one side of the market,” a reference to brokers whose customers were heavily betting for stocks to rise or fall, rather than having a mix of positions. Robinhood drew down “at least several hundred million dollars” from its bank credit lines and “said on Thursday that it was raising an infusion of more than $1 billion from its existing investors.” The volatility of those stocks is approaching infinity as their trading volume increases, so the traditionally mild and technical credit risk around settling trades has become real and scary. Brokerages have to put up more money to guarantee against that risk, and also think about ways to prevent the risk from coming true. “Stop buying super volatile stocks” is one obvious way. It has become expensive and risky to be a broker for the meme stocks, so some of them tried to stop.[7]
SMH. So what I share a netflix password? Or I don't want to take on a 400,000 dollar mortgage in the suburbs? GTFO here..
Reluctantly adding more TSLA today since it’s such a steal sub 800, I really want to go shopping for more stonks but cannot bring myself to do it. A buddy just sent me a text that he bought BBW, I literally lol’d.
