Robinhood shuts down buying on meme stocks
Blocked purchasing of GME, AMC, NOK, etc since pre market this morning. Autists going insane. Thoughts?
Trending Content
| +89 | GF doesn’t care about her looks | 57 | 48m | |
| +59 | Affair with my Associate… In Desperate Need for Advice | 23 | 21h | |
| +49 | How to sound more eloquent? | 17 | 9h | |
| +38 | 400k/year in HVAC sales? | 26 | 1d | |
| +33 | Would you rather live alone in an outer borough or with roommates in Manhattan? | 23 | 2d | |
| +33 | WSO Ranking On Resume??? | 8 | 2s | |
| +27 | Why do people listen to Jim Cramer Investing Advice? | 11 | 2s | |
| +27 | Carnivore Diet | 12 | 40m | |
| +26 | Is my boss gaslighting me? | 3 | 21h | |
| +23 | Chaotic Insane investment banker who passed away in the 90s or 2000s | 12 | 1d |
Career Resources
Robinhood as an app and a company is done. Everyone is beyond pissed at them. Robinhood was controlled by Citadel because of their close relationship. This whole situation is beyond fucked.
As a 20 year old Degen, every single pal of mine who trades (AKA everyone in my friend group) is pulling off of RH and moving to Fidelity after this. Their IPO is gonna be mad fucked, unless the HFs throw them a bone for helping them out now
.
The truth.
I think this is against their own ethos. bring financial democracy to the masses? Not really. they are in it for the money, like anybody else. somebody threatened them and they gave up.
The people on the reddit call themselves autists, he's not disrespecting them
Classic young prospect, doesn't even bother to read WSB and see that they literally call themselves autists. It's a term of endearment, because it means the top fundamental equity managers at Melvin and Citadel are getting fucked by a bunch of retards. Words do not matter to us, only 🚀🚀🚀
Blah blah blah 🚀🌈🚀🐻🚀
You are doomed. "The Force", starting today, will monitor every Prospect in RE's SB/MS activities to find out who you are, after which you will be put in a universal blacklist and shall never be hired by any employer again.
Stay anonymous long as you can.
You obviously haven't been on r/WallStreetBets or have any idea what's going on.... because they refer to themselves as "autists"....
It’s a term of endearment on wsb - or at least it used to be before wsb devolved into the crowded echo chamber it is today. Posts were literally entitled “hey autists” and they praise Michael Burry as their king of autists.
No need to get defensive about your own developmental disorder, prospect.
you have no concept of WSB culture, and are an ACTUAL autist.
Great to see people like you defending citadel and rich hedge fund elites who like to screw over the working class.
How is that defending Citadel? RH has blocked all option trades w/leverage in WSB meme stocks.
I have a 45k balance, 15k in cash and couldn't buy.
I couldn’t care less about HF (and Melvin can go fuck itself) or redditors, I am more interested about thoughts on Robinhood fucking their imminent IPO and inviting mass public outcry.
Comprehension is hard, but sometimes it helps to reread. Try rereading OP's post with your head OUT of your ass this time.
I do think its a bit messed up because they say "democratizing" investments. I just saw WSBs saved AMC as well with the cash infusion. Should there be financial controls? Yes, but honestly this is a free market, and people have the right to throw their money wherever they want.
Yes AMC got saved with access to cheap equity capital. What's the reason behind GME not doing an equity offering yet? Is it because nobody wants to buy them in the midst of a short squeeze or that they don't want to pop the bubble?
I find it hard to believe they didn't at least explore the idea of an equity raise or acquisition. Wonder if the HTZ precedent with the SEC blocked it.
I'm glad AMC got helped by this
Bill Ackman made billions last year on his short positions thanks to his Oscar-winning performance on CNBC: no word from SEC.
Retail investors started to make money: got shut down.
Love free market.
Ackman had been short for 3 months before going on air and on-air he said he was closing his shorts and going long. People heard what they wanted. He literally said he believed we'll come back from this and that he was buying Hilton and Chipotle.
he called it the "apocalypse"....
Hell is coming
If your name is Melvin and you're a dirty 🌈🐻 on GME
This is such a horrible comparison.
The phrase "retail starts making money."
If retail is just now making money... in this market.
Ackman thought default rates would rise if US shutdown the market, he said so on national TV. That is exactly what happened. Doubt Trump and governors were waiting on Bill Ackman to tell them to shut down. He made a good trade.
And you are saying retail investors saying "hey pump this shit stock because fuck Mevlin" is the same thing... what a dishonest and childish way to look at it.
I'm not sure how it's legal for a trading platform to hold your money/shares in a stock and to prohibit you from selling those shares, even as the stock tanks. That has to be at the very least setting Robinhood up for a major lawsuit.
No see, you're ONLY allowed to sell. They're blocking people from buying more, because it's bad for THEM. THAT is why these filthy fucking brokers are going to get sued 🚀🚀🚀
If I were a lawyer today, I'd be licking my chops. I simply cannot fathom a way for Robinhood to avoid a gargantuan class action suit here.
I don’t see how this is legal and neither do I see how these trading platforms survive this. Why would anyone use these apps if they can block your trades at their discretion? If the SEC doesn’t go after these platforms it just further proves how fake the market and regulation is.
Its extremely messed up, they essentially flowed money back to hedge funds who were short at the higher levels. Its a load of crap.
Yeah this pisses me off - I don’t like it.
GME tanked from 400 to 130 because no one was buying. Guess why no one was buying. Because they were banned from buying LOL
I no longer support stimulus checks after watching a bunch of people engage in a pump and dump scheme hoping to get rich quick. We shouldn't hand morons money for nothing.
You sound like someone that bought in at the top - sorry for your loss.
If investors A is allowed to short a stock above 100% of float then investors B, C and D should be allowed to go long and if that results in a squeeze then be it. That's the risk you take when you short a stock. $GME as an investment was discussed months before it took off.
The "investors" on reddit are a mixture of people who saw that the stock was undervalued at $4, people who realized a squeeze opportunity and mostly people who see positive sentiment and want to make a quick buck - similar to a HFT.
Not everyone who received $600 put it on the market. I imagine some of these morons were laid off because of government-mandated lockdowns, and I imagine some of them realized that hiring was slow so they might as well try their luck at trading. I understand where you're coming from but you cannot possibly think that denying assistance to those who lost their jobs due to a government-mandated lockdown is a good idea.
Between this and Parler, the massive inter-sector collusion to protect the interests of the liberal elite have shown that free markets and democracy no longer exist in America.
this seems bullish as hell for crypto and decentralized exchanges
I've got a massive robinhood account. It's so easy to use on my phone. I'm thinking about switching because I fear a lawsuit is going to bring them down. Though there should be enough lead time to get my money out.
Dogecoin up big today. Do you think people will continue to pile into crypto?
Makes no sense. The trading platforms can shut down crypto trades, too. Just wait until the institutional investors are taking a hit.
Dogecoin is a literal /biz/ pump and dump lol, do not buy into that unless you want to gamble on timing the dump right.
Doge
I can't fathom how Robinhood (and whatever other brokerages were putting restrictions in place) survives this and the bevy of lawsuits headed their way.
Volatility restrictions already exist on a fundamental level -- the NYSE trading halts. The meme stocks have been collectively halted 8917234 times this week.
It's not a free market if your broker precludes you from buying, and it is securities manipulation. Although the same can be argued for millions of Redditers collectively pumping a handful of tickers.
One thing is for certain, there will be encyclopedias worth of new securities regulations that will emerge from this circus.
RH's strategy was fucking trash from the beginning anyways. Once commission revenue broke all the other brokers consolidated and are trying to go up market to make revenue from advisory fees and interest spread. Meanwhile RH still relies on selling the data and order flow of retail day traders but now when it came down to it they stabbed their customer base in the back, refusing to provide the very service they promised. It was already public knowledge they rip their retail clients off by purposely having shit price execution. Now that it's clear [AGAIN] to anybody paying attention that RH's true product all along was selling out their retail traders to Citadel they're going to lose that product when these people leave them. Good riddance to these clowns.
As some other posters have alluded to, Ken Griffin / Citadel as Robinhood's biggest customer of order flows & a large investor probably strong-armed Robinhood into doing this to salvage what they could of their GME short via Melvin Capital. Robinhood's general counsel did a calculation and concluded that settling these future lawsuits would be less costly than losing their biggest customer / a large investor
Robinhood did nothing wrong? They literally just got finished with a lawsuit that said they SHOULD NOT have allowed their customers access to derivatives or ability to trade during times of volatility. They're literally doing what the people asked of them.
FUCK ROBINHOOD.
FUCK CITADEL
AND FUCK MELVIN CAPITAL MANAGEMENT
Jesus christ...on wall street oasis of all places is having the same reaction as dave fucking portnoy.
Guys, the clearing houses are refusing to make a market. It's not some fucking conspiracy, the stock is too volatile and they cant effectively lay off the risk so they are just shutting down the name. Everyone saying otherwise is just showing that they don't actually know shit about how the market works - this includes Charles Payne, AOC, Ted Cruz, Dave Portnoy, Litquidity - all of them. The financial press and finmemers and obviously Cruz/AOC are all fucking frauds pretending they understand this stuff because it is the flavor of the week but they DON"T.
This should be the canary in the coal mine for you - anyone bitching about RH shutting down names as if it is some conspiracy has no clue what they are talking about
Edit - here you go: https://finance.yahoo.com/news/webull-public-remove-restrictions-memest…
And let's assume there was something nefarious - these lawsuits are stupid - there's no standing. How are you harmed if you can't buy more? You're basically saying if I'm not allowed to pump the stock, it's illegal. The broker isn't required to sell you anything, you sign that in the terms and conditions.
Wow, you are legitimately retarded, and not in the WSB, endearing way. How are you harmed if you can't buy more? Hmm, well let's see, if you are a GME holder and market participants aren't allowed to buy GME stock (mind you, they want to), the value of your stock goes down. Jesus Christ.
Disclosure: I'm not currently nor have I ever been a GME holder.
Further Disclosure: IB analyst hopeful, this is the level of associate talent that will supervise you in your nascent career. What they say about industry talent suck to tech really must be true.
Are you shitting me, in front of a court of law you're gonna say if I can't pump the stock, it harms me?
They are allowing you to get out of your position, no one is stopping you. What they are saying is you can't buy more , that doesn't harm you.
So nobody understands it except for you and like three other people on this forum?
Why are you posting anonymously then?
Small pee pee
Wtf? If a large segment of the market cannot buy your holdings, then you are harmed.
If true (and I'm not saying it is)...*grabs popcorn*
If that's true, they should be put before the firing squad. If it's true.
damnnnn
I finally agree with AOC
“This is unacceptable,” AOC tweeted on the news. “Fully agree,” Ted Cruz responded.
https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/this-is-una…
At the very least, I’m not going to give Robinhood another cent but will probably transfer whatever little I have left into my other brokerages. I didn’t own any GME, but this sets a dangerous precedent that they have this discretion. I don’t care if it really was clearing houses, other platforms didn’t have a problem so they have no excuse. Absolutely horrible and likely fraudulent. I cannot wait to see the class action lawsuits and hopefully, criminal investigation. They deserve everything coming to them.
You would think that WSO users would be capable of using Google to educate themselves instead of blindly pointing fingers at Robinhood. Goes to show how many high schoolers use this forum:
https://finance.yahoo.com/video/heres-why-robinhood-restricting-users-1…
When you have millions who are first-time investors and think buying a stock is the same as buying a movie on Prime Video, this is the reaction. I'm also surprised at the reaction on this site though.
There is a difference between getting screwed by natural market activity due to your inability to understand stocks vs a brokerage provider placing limitations on trading activity for a handful of stocks that will invariably drive prices down.
Yes people were risking it all by gambling but they are ultimately footing the bill for Melvin’s own ill-fated gambling. I know that protecting your money from the poors is paramount on WSO but this is fucked. Citadel and Melvin are the kids who flip over the whole Monopoly board when they’re about to lose
This doesn't explain the elephant in the room: buying was prohibited, only selling allowed.
This is from the article:
"We are simply stopping opening of new positions. Liquidations can happen at any time. This is general market mechanics. We have customer protections in place. We would never stop a customer from being able to get out of a position. But currently, we are stopping customers from getting into a new position. And that has to do with it possibly."
In other words, you can sell your position, but the clearinghouse won't let you sell to anyone on the platform; therefore, the market of buyers is vastly reduced, thus the price falls, thus short-sellers get relief. This is all so transparent.
The fact that you accept these people at their word without using any critical thinking is pathetic.
This part was hard for me to wrap my head around. But I think the answer is that the clearing houses mostly face the increased expenses when they are handling net buy orders.
Apex needs to go borrow cash to finance the purchase of shares that will be delivered to the robinhood accounts on Trade date + 2, in exchange for the robinhood users' cash (which is then used to repay the banks they borrowed from to source shares). I'm sure that these borrowing costs are usually immaterial on stocks like AAPL (especially over just two days), but can understand that Apex would have to pay higher rates to finance purchases of GME, since the value is so volatile.
The alternative to paying these higher financing costs for sourcing GME shares is to just have enough cash on hand as a clearinghouse. Fidelity operates its own clearing house and definitely has the easiest access to cash, so this was never an issue for them. Robinhood doesn't have that extra capital lying around, and needed to draw on credit lines in order to get this cash deposit amount over to Apex, and that's why trading can be back with limits tomorrow. Would imagine the limits are dependent on the size of the cash deposit.
When the clearing house is settling a net sell, it already has the securities and is searching for buyers so it can deliver cash on settlement day to the users' accounts. I could be wrong but handling this scenario doesn't seem as challenging to the clearing house. Since Apex is definitely a net buyer of GME due to the bulls on Robin hood, incremental sell orders would just decrease the amount of the net buy, and therefore reduce the heightened financing expenses/cash need for the clearing house on settlements.
Really seems to me like this is about the clearing houses wanting to avoid losses on processing trades for historically volatile stocks. Risks to the clearing house can escalate to risks to the broader system.
Sourced this thinking from the chapter on Settlements in this book: Amazon.com: After the Trade Is Made: Processing Securities Transactions (9781591841272): Weiss, David M.: Books
This is the damn craziest thing I've ever seen. The Google store and Apple store removed all the negative reviews and Robinhood is back to a 4.2 star rating.
I swear to God, the powers that be are using 1984 as a training manual. We really are at the very beginning of a dystopian "sci-fi" future.
I like how no one understands the difference between Citadel and Citadel Securities
A) They restricted due to clearing house issues. There's no smoke filled room of billionares conspiring to fuck over the working class, take off your tinfoil hat. We're jamming the financial system with massive volume in highly shorted low float stocks with hundreds of thousands of complex out of the money options that people think are so simple but have massive ramifications. Fucking. Chill.
B) Retail thinks they're fucking "the suits" but its going to prove to be the opposite. Retail will be left holding the bag and a lot of people are going to get hurt very badly.
Why not stop trading all-together rather than allowing for the price to get run down by prohibiting buying only? Can you not see how that would fuel the conspiracy theories? It's like Jeffrey Epstein killing himself in a maximum-security prison, while under guard on suicide watch, when suicides had rarely happened in decades at the facility. Sure, it's possible there is a rational explanation, but the move itself cries out for conspiracy theories.
Because those costs are incurred ONLY for the stocks like GME/AMC where the volatility is a serious issue for the clearing house. Its on a security by security basis.
Agreed.. All the dumbass shit I read = short WSO Jesus Christ. Sorry Patrick... buncha frauds on this forum
people basically arguing we should’ve kept the housing bubble going since owners were making so much money. Hot take - on an unleveraged and time weighted basis $GME is an even bigger bubble than that
i don't think that citadel necessarily could have 'strong-armed' robinhood into limiting buying of certain tickers. in a payment for order flow relationship, robinhood is the client and wholesale market making is extremely competitive so its not like virtu or susquehanna couldn't handle the flow citadel was receiving for a similar rate. its more likely that the lawyers at these discount brokerage thought it was most prudent to limit participation in those stocks for legal reasons. if that's the case it was just a terrible judgement call. i don't think its the end of RH either... people move on
Citadel is one of RH's biggest clients. Citadel bails out Melvin Capital. RH's clearinghouse has issues making buy orders; RH continues to allow sale orders, thus effectively bailing out Melvin Capital and Citadel's position. This could all be a big coincidence--it's certainly possible. But if it's all a coincidence it's a pretty amazing series of coincidences.
as a matter of fact, citadel is not one of RH's biggest clients. citadel is not a RH client at all, in a wholesale market making relationship, RH is the client of citadel. i'm not saying that a motivation didn't exist for citadel to want to influence the discount brokers, i'm saying that i don't know what citadels' bargaining chip would be with the discount brokers. if citadel alienates RH then RH can just sell their flow to one of the many other market makers that will pay a nearly identical rate for nearly identical execution. i could be missing something but i don't know why rh would accommodate citadel in this matter aka i don't think they did.
Was just reading but looks like that the restrictions on trading were legit and had to be done. Brokerages had no choice other than to restrict trading. Problem arose because these stocks were being bought on the margin, which then began to give the brokerages regulatory / capital issues. Brokerages had to restricted trading or they would have run afoul of existing regulations.
Then shut down both sides of the trade. Don't leave open sale orders and close buy orders. It looks bad. And, in fact, it crushed the stock.
I agree. They did a horrible job at communicating their decision to their users
Yeah exactly
Minima a expedita doloribus soluta inventore. Molestiae quos enim neque aut corporis enim. Molestiae ut possimus voluptatem. Fuga quia officiis porro nesciunt. Magnam ullam necessitatibus ipsam explicabo. Est voluptatum quia at harum.
Est sequi corporis laboriosam sint nemo sequi. Maxime esse quibusdam sed facilis repellendus quis qui. Dolores nostrum eos reiciendis et ea natus veniam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Perspiciatis autem consequuntur aut praesentium officia. Facilis consequatur vero incidunt aliquid illo. Saepe cupiditate est id et. Eos reiciendis illum nihil similique. Maiores consequuntur dignissimos qui occaecati. Nemo assumenda praesentium molestiae.
Rerum qui explicabo nesciunt ea praesentium. In ex autem dolores. Veniam alias quia labore assumenda vero tempore. Laboriosam magni optio et maxime. At natus odio omnis temporibus tempora quidem. Eum nesciunt ratione molestiae iste omnis.
Est hic dignissimos dicta. Vero accusantium inventore excepturi veritatis.
Cumque in cupiditate eum harum. Nam nemo quia qui similique est.
Sed qui excepturi sit fuga velit eum. Maiores officia molestiae et omnis expedita. Occaecati possimus id corrupti cum quaerat architecto architecto. Modi nam at nobis sed magni id consectetur. Sit inventore molestiae eius soluta mollitia.
Non iure eaque minima facere consectetur optio dolore eos. Maiores iste accusantium numquam ut. Qui ea ut sunt omnis vel voluptates harum.
Dolore accusamus consequatur quae aperiam sunt eius. Quasi numquam rem odit suscipit quae corrupti consequuntur dolor.
Cupiditate iste cum nihil ducimus quaerat. Est nihil commodi saepe soluta voluptatem.
Eos voluptatem harum autem earum. Cumque sapiente velit harum omnis. Corrupti dolor id necessitatibus voluptas odio. Perspiciatis esse ut dolores id reprehenderit libero officiis.
Dolor consequatur est corporis id numquam sint ut debitis. Illum eligendi sed deleniti cum repellendus assumenda adipisci.
Qui nihil dicta in. Dolores omnis maiores est autem. Fugit maiores perspiciatis ex excepturi aliquid aperiam corporis.