/biz/ - Business & Finance

This was a theft of astronomical proportions from anyone who opened shares, and especially 1/29 weekly calls, in the banned stocks. The value of this manipulation hasn't been properly quantified yet. I haven't done the math for much of it, but had GME closed at 600 on Friday, which I feel is conservative, the 320 strike calls alone would have been worth an extra 500 million dollars. I think the amount that was stolen would have likely caused a collapse of the system on Friday and was in the tens of billions.

As someone who owned 1/29 long calls on BBBY, the issues caused by this have been painfully obvious yet no one is discussing them. I have no financial background and haven't been trading for long so I could easily get specifics wrong. (2/2)

>>27193815
were you the 18 year old with 250k who posted the institution vs institution thesis

>>27193998
nope

>>27194048
were's your last thread this was the one i was talking about
>>27107395

>>27194150
This was the first thread, just feel like this writing was a little more collected and I want people to offer more insight if they can. There were some good posts in the last one.
>>27022780

can you bump you're own threads I don't remember

Bump

>>27193839
point out/record everything as a timeline with arrows, then do another class action.

We're never getting those 48 hours back.
I hope most jumped ship after their brokers either denied their buy order or just restricted them to a certain amount.
Fidelity must be salivating from all those new hundreds of thousands of users.

>>27195646
I want to switch away from robinhood but am worried about missing out of what is left of the squeeze. I've heard from Chamath that in the case of a brokerage failing your portfolio can be INSTANTLY transferred for another broker, but I don't know how quickly it can be done now.

I think the financial system is still going to collapse from this if the shorts haven't closed, which I don't believe they have.

Chamath shitting on a stupid guy who doesn't understand the financial system
https://www.youtube.com/watch?v=rWEPSKkkdKQ

>>27195833
I also want to switch from RH, but I'm concerned I could miss the squeeze next week if the transfer takes too long. The latter sounds nice, maybe someone already tried it?
In the meantime, I made an account in Fidelity just to buy more if there is a dip. Hopefully that one is online by Monday or Tuesday, they are sure taking their sweet time reviewing the bank. Their customer service is getting hammered as well, a fuckload of people are jumping ship from all these traitors.

Robinhood made absolute sure to close my call at literally the lowest point of the day. Got an email saying standard vague shit that amounted to them pulling something shady about closing out my position for me. So I rushed over to check, just to find out I was literally ~30 seconds late. Usually they do this on the hour mark before and I was shifting around capital so I could exercise instead of close, but they decided to fire early and RIGHT at the deepest part of the market manipulated dip

>>27196386
They sold one of my AMC calls 30 dollars under market around 2pm as well.
https://www.sec.gov/news/press-release/2020-321

I'm really glad I went with Schwab desu senpai.

>>27195081
interesting post, OP. take a bump

>>27195833
>Chamath that in the case of a brokerage failing your portfolio can be INSTANTLY transferred for another broker
wtf? I didn't know that. Looking to transfer portfolio from Schwab to Vanguard or Fidelity after the whole RH, Ameritrade, Schwab freezes.

>>27196990
>I'm really glad I went with Schwab desu senpai
Schwab also put restrictions on traders from purchasing GME, AMC, and other shorted stocks, anon.

>>27196287
Open a Fidelity account and slowly migrate over. Fidelity is one of the few who didn’t stop trading last Thursday.

>>27196990
The brokers manipulating the market affected everyone who owned securities, it doesn't matter which broker you use since the value of your positions was stolen just the same. The only difference is that you could buy the dip in some brokers.

>>27197631
>Schwab also put restrictions on traders from purchasing GME, AMC, and other shorted stocks, anon.
I talked to schwab on the phone. Their system was overloaded. and it was more than just GME, AMC that were blocked from purchases. That being said....they own TDameritrade. so I will also be leaving them. I'm looking at tradezero

>>27197881
What did td do? I didn’t notice anything

One thing that I don't see mentioned is whether the brokerages are solvent or not.
Remember Gox? What impact did Gox have on the market while it was trading with no liquidity?
Worth remembering that RobinHood doesn't immediately transact the shares, it instead transacts options on the back end.

>>27198383
td halted buys on gme. schwab only made gme unimaginable, which is fair desu.
https://www.cnet.com/personal-finance/robinhood-allows-limited-buys-on-gamestop-amc/

I signed up for Robinhood right when everything happened. I found out Cash App trades stonks and bought a few there.

>>27199100
>unimaginable
unmarginable

>>27193815
Oh, ffs, how do you think Jewbook makes money, "if it's free" , and how does RH does this miracle of "no fees " ? Because you, the small fish, are the product they're selling, in this case , to Citadel. I have no idea if this was some tomfuckery done with bots, some insidiers, probably both, but getting millions of folks to part with their money is what they do. RH doesn't even exist, they are just the shepard leading you faggots to the slaughter.

>>27200114
That has literally nothing to do with this. It doesn’t matter which broker you use, how they place your order, etc.
The point is that Robinhood and a few others to some extend manipulated the price of these stocks in a totally unprecedented way and almost no one is recognizing this.

They make money by selling the ability to buy your stocks right before you so they get them cheaper and make money selling to you.
They make bank by crowd sourcing theft

>>27193815
>>27193839
agreed, and I had absolutely no money in any of those meme stocks. This was theft and those investors/companies were straight up robbed. This was easily the most blatant market manipulation Ive ever seen. The fact there was almost a market wide liquidity crisis over some random pump and dumps of low cap stocks is embarrassing.

>>27200571
See
>>27200438

>>27200438
You really don't get it. RH is a victim, at least in some extent. The Hedgies playing their games, tossing shares back and forth in the dark pool, that would leave RH on the hook for those options, they had no choice but to ask their daddy to provide them liquidity. Coinbase and Binance restrict trading in high volatility all-the-time. It's a big Club, and you and i ain't in it.

It should be a Capital offense to do this desu

Frens need to DYOR.

The root cause of the cross-market restrictions on GME etc. is that the DTC raised collateral requirements for these tickers from ~2% to 100%

>What is the DTC?
The Depository Trust Company (DTC) basically handles the bookkeeping of the market while keeping custody of the actual assets by registering ownership of them under their subsidiary: Cede & Company.

>What is Cede & Company?
Cede & Co. is a specialist United States financial institution that processes transfers of stock certificates on behalf of Depository Trust Company. Cede technically owns substantially all of the publicly issued stock in the United States. Thus, investors do not themselves hold direct property rights in stock, but rather have contractual rights that are part of a chain of contractual rights involving Cede.

And then you get the real redpill which is the SEC gives the DTC (a private company) full authority to restrict trading activity on any securities that they own (which they own EVERYTHING).

https://www.sec.gov/oiea/investor-alerts-bulletins/ib_dtcfreezes.html

TLDR: You own nothing. Cede & Cnead own everything and write the rules. Market makers have to comply if they want to play the game.

>>27200438
I believe there's two lawsuits against RH already, at least one of which was class action IIRC. Hop on board.

>>27200939
Well coins aren’t regulated and exist largely as a way to manipulate currency so that’s not surprising.
Who exactly is writing the naked calls RH sells?

>>27201128
>coins aren't regulated

>>27201040
"Occasionally a problem may arise with a company or its securities on deposit at DTC. In some of those cases DTC may impose a “chill” or a “freeze” on ALL the company’s securities"

How does this apply to restricting only the ability to buy a security and only by some companies? that doesn't seem to apply to the definition of chill per the page you linked.

>>27201434
forgive me if I get things wrong, I assumed as much due to the behavior of pajeets here.

>>27197881
>I talked to schwab on the phone. Their system was overloaded.
Dude, I bet that's just their excuse. Like you said, they own ameritrade and still halted GME. looking at fidelity for portfolio transfer now.

>>27201514
You're confusing the wagie that makes you the burger, RH, with the CEO of Burger King, Citadel. It's orders of magnitude . RH's business is selling saps for Citadel to milk. Crypto got started exactly so we could escape these motherfuckers.

>>27201040
>cede & cneade
>formerly chucks

>>27201725
But that still has nothing to do with my point itt. My understanding is that Robinhood has to pay margin to clearing houses for the calls they’re selling. You said RH is liable for calls they aren’t selling? How does that work.

>>27201040
pls drop more repills on this...I have read that this group also owns all 12 of the federal reserve banks wtf

>>27193839
and you had cash in your account, settled, to exercise your BBBY contracts with?
or are you telling me you waited until expiration day to try to sell a call to someone else?

>>27201818
When the magnitude of orders exceeds their financial ability to deliver, especially, in times of high volatility, high demand-very low volume, they have to decline. Imagine you go to McDonalds, and try to pay with a Bilion Dollar bill. The wagie says, "huh, sir, i don't have change for that". And no, it wasn't wsb that broke them, it were the hedgies , hoping on and off the dark pool.

>>27201441
Think about the situation for GME and the others, they were in huge DEMAND. DTC lost the ability to settle shares on the books according to market demand. Had there been a mass exodus, you would probably see sell side blockage.
>restricting only by some companies
All retail brokers had some form of restrictions. Bigger brokers such as fidelity and schwab have enough of their own capital to use as collateral. Robinhood and other meme brokers probably operate with thin margins.

If you were asking about why institutions could buy / sell, its because they deal direct with the DTC. Did you think they were also using Robinhood or TDA? Fuck no. Again, they know the rules of the game, and can settle direct, no clearing house.

https://www.dtcc.com/settlement-and-asset-services/issuer-services/how-issuers-work-with-dtc

some more sources explaining the DTC changes that took place:
https://medium.com/deep-data/robinhood-and-gamestop-f730cc5e6ac

https://www.bloomberg.com/news/articles/2021-01-29/what-s-the-dtcc-and-how-did-it-stop-gamestop-mania-quicktake

>>27202137
No, I had 1/29 44 strike BBBY calls that closed worthless on Friday because of the crash in stock value that manipulating peoples' ability to buy stocks caused.

>>27196386
robinhood doesn't make the counterparty appear out of thin fucking air. jesus christ, what the fuck are you people doing trading options?

>>27197755
it doesn't matter which broker you use because the buyer, when you sell, and the seller, when you buy, comes through the fucking exchange, not the broker. the broker adds liquidity but at the end of each day they have to open their books, settle their new net position with DTCC, and still meet capital requirements imposed on them by law. a bunch of retards buying calls they can never execute caught out robinhood because they're just as chucklefuck as melvin capital is at being short.

>>27201874
I don't want to go full poltard.

Really makes you think though why they designated a subsidiary (Cnead) of a private company (DTC), held by a private company (DTCC) to handle all market transactions and OWN all stocks, derivatives, house titles, debt securities, and more.

Of course I'm sure you can guess which chosen people founded and operate these private companies...

>>27198571
they tap their revolver. robinhood literally opened their wallet and got out the credit card, again. this is not their first fuckup. in fact as i hope most of you know, WSB got its first round of drooling retard followers because of how hard robinhood got clowned on by an idiot options trader who accidentally found a bug in their calculation of (i think it was) margin collateral.

>>27200114
robinhood sells order flow flat out, yes, but they also route trades. so they do also make selections of where to execute your trades based on penny differences in the moment, and those differences are larger for options than they are regular shares. so they don't just give citadel the info they need to front-run you, they pitch them a softball to maximize the gain from front-running you.
this shouldn't matter once you know it (assuming you actually understand it). robinhood is still commission-free, and so every savvy trader that got GME back at 20-30 knew what they were doing. and any investor who plays the long game couldn't give a fuck if they're being front-run, because that action itself is not informed by long term investment strategy whatsoever. it has nothing to do with you and everything to do with hedge funds and investment banks competing against each other.

>>27202795
That was a good one. But in all honesty, allowing margin trading in retail is no different than selling meth in a elementary school.

>>27201813
i like you.

>>27202251
bullshit. stopping buys but not sells manipulates the price. if they dont care about the price they should stop all trading. they stopped buys but not sells because they wanted the price to go down.

>>27202301
Fren I know losing money sucks, but you have to keep searching for the bigger picture. Think about the potential fallout from a GME and meme stock crash. Emotional and financially devastated normies will be ripe for manipulation. Any narrative can be spun up and latched onto.
>absurd capital gains taxes
>more restrictions on retail trading
>great reset
and people will cheer it on.

Also consider that you're ignoring some other key facts, like:
>institutional holdings of all these meme stocks is MORE than 95%
>retail accounts for less than 5% of the volume on BOTH sides

What should also be concerning is how the broader market indices started rolling over without anybody noticing. MASS media coverage of GME will bring in so much retail volume it will pop the bubble. Normies will be stuck holding the bags, at the ATHs of ALL TIME. It happens over and over!

Of course we are all being manipulated. Try to not fixate on one detail because it goes deeper.

>>27203274
Imagine the stock was crashing and you were locked out. That would've hurt. At least that way, you could bail, if shit got real. Move to a real exchange, that does their own clearance.

>>27203068
True. The only game we're allowed to play is medium-long. Day-trading with a squirt gun, no thanks.

>>27203274
>imagine if the stock were crashing
i trade crypto motherfucker, i dont have to imagine. now youre saying the settlement house is doing it to protect me? before you said it was because of a liquidity problem. so which is it?

the truth is if the stock were crashing they would not have stopped trading. they WANTED it to crash.

>>27203274
You have to think logically about what a collateral requirement INCREASE would mean for a broker.

Keep in mind, I'm not saying brokers don't play dirty, just that market mechanics argue in their favor. In any case, if brokers want to play in the market making game, they have to comply with the turbojew's rules. How ethical those rules are, we really don't know. As I've said in >>27202251 the SEC already gave the DTC the authority to SHUT IT DOWN.

>>27202251
How are you sure a chill was issued and it wasn't robinhood deciding of their own volition that they couldn't afford to keep paying margins on these stocks and making their own call? They ended up restricting to owning only a certain number of stocks/calls, that doesn't sound like the DTC decision it sounds like it came from robinhood. If the DTC is allowed to manipulate buying/selling fine, but is robinhood allowed to do so? I'm aware their terms of service essentially say that they have total autonomy over you but I don't believe half of it will hold up in court so I'm not considering it.

>>27203290
ive been telling my parents for years that everything on tv is a bullshit show, but only after the fake capitol "riots" do they finally believe me. clown world is getting more and more retarded, but it’s only serving to prove schizos like me right all along. let them try more ridiculous bullshit, it only proves me right.

>>27202729
wtf? OP turned into schizo mode. what is pic related?

>>27202661
But wouldn't the margin need to be fronted by the person who wrote the call, and not the retard who bought it? Wouldn't stopping naked call selling be the way to stop this issue if they wanted to do so without effecting the stock's price?

>>27204365
I'm OP not him lemmy put this back on

>>27203917
>how are you sure a chill was issued
Not a Chill. DTC said they raised collateral requirements in dealing with the meme tickers. Rose it from 2% to 100%. Obviously some brokers can handle that (fidelity, schwab, mr. shekelberg) and some shat themselves (RH, WeBull, "trading apps"). I posted 2 sources here >>27202251 but you could find more just googling "DTC collateral gamestop"

Robinhood's own decisions were based on how risky they wanted to play the game. So consider the volatility of GME, someone who pressed BUY 100 when the price was $200 would have to go through clearing and settlement, and buy the time that occurred, the price could be literally $300, and if the pleb only had $20,000 in his cash account, the transaction would fail. Many other things could go wrong.

Read up on execution, clearing, and settlement. Some sources:
https://www.schwab.com/resource-center/insights/content/stock-settlement-why-you-need-to-understand-t2-timeline
https://thismatter.com/money/stocks/settlement-and-clearing.htm

>>27205011
Thanks I'll read more about it. The whole system seems absolutely fucked though and there is no reason at all these transactions shouldn't all be centralized so that a broker can't crash a stock due to their incompetence or what they stand to gain if they "can't afford the margins"
No matter how you look a this what they did caused a panic and crashed the stock value.

>>27204454
when you write a call, and it executes, you receive a premium instantly from your broker. the buyer of the call pays a premium instantly to their broker. the brokers each carry it on their books to the end of the day and as i understand it OCC clears these. for regular shares, DTCC clears them.
margin is borrowed money. margin is made-up purchasing power that you have which itself is the broker leveraging themselves up to create that purchasing power for you.
these are not the same thing, but, your robinhood funds are not a deposit account. that's in a pool of money, and what's yours is now an accounting ledger entry.
it doesn't matter what you're trading on margin, it's a risk to the broker. that's what collateral is for. when you write options, you have to have collateral, so they require you to open margin accounts; these are what go hand in hand.
there's really nothing wrong with naked calls. after all some of the people who sold naked GME calls did fine the other day, because it's the buyers that couldn't execute theirs in time who had the problem. that's dependent entirely on the strike price.
lastly, actually, brokers DO control who can write uncovered calls! robinhood, again, are the ultimate retards here. it was so phenominally easy for me to get my account enabled for that a couple years ago. fidelity on the other hand wanted a full investor profile on me and some paperwork to show proof.
but you should never think some illiquid contract is going to work in your favor like a day before expiry. that just does not happen. the last quote isn't gonna tell you anything. close that shit out ASAP.

>>27204122
checked and I know that feel. I can't believe my parents still pay $300+ for fucking TV channels.

>>27204365
its from an elaborate larp in a schizo forum 10 years ago but might be worth skimming through although it will take a few hours.
https://ia802300.us.archive.org/8/items/rofschildv1/IAmARofschildAxeMeAQuestion.html

Some themes I remember relevant to this thread:
>The "Next Big Thing" is happening, hidden in plain sight (WEF? Great Reset ?)
>The END OF FIAT (happening now?)
>Bankers will lose and the normies will cheer (GME into bubble crash?)

In context, think about this >>27203290 and what changes a population of angry bagholders would voluntarily accept. Patriot Act 2.0?

>>27205336
You could probably become the next trillionaire if you invented a blockchain-based instant stock certificate clearing / settlement system.
>The DTC settles transactions worth tens of trillions of dollars daily.
Imagine being offered an exclusive monopoly on that providing that service, for say, a 0.01% fee per transaction of course...

>>27205427
Thanks for the info, I meant collateral I don't know why I wrote margin.

Are you saying that people who owned ITM calls without the means to exercise them was causing the high rates from clearing houses that robinhood couldn't give them?

It still seems like naked calls are the issue here and that a squeeze could fuck the clearing house no matter how much money the broker can give them in collateral.

>>27206380
Gonna need to make a lot more good trades before I have the lobbying money to get that system put in place