Was going to start pulling my cash out of RH. I'll be damned but that part of the site is down. How convenient.
The Economy (2020/21)
- Thread starter rideit
- Start date
Supposedly Chapman Albin.
the longer this goes, the funnier it gets
Rebounding on equal volume. That looks like it was a short push down, as it was relatively low volume in organized lots.
Correction: pushed down on higher volume. Going up on less volume. It's taking a lot of pressure to push it down and rebound is quick and easy.
Apparently they also clear through Citadel...
E-Trade is still trucking but takes days to clear funds.
BURRRRRRRRRRRRRRRRRRRRRRRRRRRNNNNNNNNNNNNN
Schwab is still trading.
Just read in that Twitter thread that Donnie Jr. also agrees with AOC on this...
For @Pesqueeb... "I wonder what his dad thinks about that?"
"When @AOC and @DonaldJTrumpJr are on the same side you know you f--ked up"
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Although my reaction when reading Junior's comment was like... yeah dick, you're part of the problem. You know what a rigged system looks like because you explicitly benefit from it, dickhead. Probably.
Donald Trump Jr. said:
This take gets pretty interesting later on, can anyone verify if my favorite lefty Canuck‘s „third story“ is accurate?
https://threadreaderapp.com/thread/1354848494192738304.html
https://threadreaderapp.com/thread/1354848494192738304.html
Sort of. There's a lot more going on regarding how Citadel is involved. They are a LOT deeper in with RH and a few other trading platforms that clear through them. When they stop clearing those trades, those platforms can no longer trade and they have no other options for where to trade. Citadel has a vested interest in stopping a short squeeze (Melvin acquisition) and just stopped the ability for a large number of buyers to do such.
Jesus... People are going to jail is this shit is legit.
Edit: The only way this could legitimately happen is if a person is trading on margin. But of a person is that far up then it shouldn't be an issue.
Edit: The only way this could legitimately happen is if a person is trading on margin. But of a person is that far up then it shouldn't be an issue.
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Shit, this could have it's own thread.
Shit, this could have it's own thread.
Well this is sure getting fun. Amazing how little it took to upset an industry.
This was identified as a fake post. Historical posts show person is in Denver; home office is in SF. Also has historical Trumper poats.
Order of market heierarchy is Fed > Congress > WH. No way in hell the WH is gonna touch this, especially given who is getting hurt.
thanks for the info, i'll keep the pic up, but have added a note that it was identified as fake.
That part about getting a call from the White House was a big red flag for me... it would be *asinine* for the current administration to get involved in this kind of fuckery... at least this early in the administration.
https://www.cnbc.com/2021/01/29/famed-gamestop-bull-roaring-kitty-is-a-massachusetts-financial-advisor.html
And I though u/deepfuckingvalue was a joke when I first saw this
And I though u/deepfuckingvalue was a joke when I first saw this
I guess robinhood was actually 'robbin da hood'???? 
CEO of WeBull did a really good interview last night. The clearing houses shut everything down because they couldn't clear the trades. If you're putting in buy orders which get filled, but upon clearing, there is no share to buy, your order cannot be filled and the market collapses.
When a trade is requested through a broker, they go through a market maker to get the other side of the trade, that trade then goes to the clearing house to put the two pieces together with the DTC. DTC is the back-end stock swapping house. They move stock from firm to firm and keep track of everything. Due to Dodd-Frank (post-2008), the clearing house has to front part of the cost of the transaction up front for T+2 to the DTC. When a stock/bond/etc reaches a certain volatility level, D-F requires they front 100% of share px up front for 2-days to clear the trade.
What happens is that if the clearing house has to use all their cash to clear 1 or 2 stocks, they can't clear any other trades. Now all of a sudden, those other trades start failing. The clearing house can say "no more; we will no longer accept trades for that stock" at which point the broker has to front the money. Brokers don't carry that much cash, so they have to bow to the clearing house.
IF the CH kept allowing trades and the losing side blew up a margin account, the broker has to margin call the acct holder to close the gap. They will start by selling off the acct holder's positions. Any leftover due funds, the broker has to cover as a loss. If they can't cover it, it goes to the clearing house. If the clearing house can't cover it, there is no fallback and the clearing houses go under. The big banks started providing huge overnight loans to all the clearing houses so that they can stay afloat while these trades are clearing AND keep the rest of the market from breaking down.
These rules were put in place post-2008 because it's what caused Lehman to blow-up. They were the clearing house for a lot of HFs that blew up and it all fell back onto them. The new rules require the increase in cash up front for volatile securities, which allows CHs to shut down those trades to prevent a market breakdown, like in 2008.
This is effectively a microcosm black swan event. In theory, it shouldn't be able to happen. But this combination of events - excessive shorts, a short squeeze, popular momentum, all leading to a huge number of options contracts going "in the money", which in turn drove it higher, creating an upward spiral.
My guess regarding Citadel getting involved in buying out Melvin and Citron has to do with them being their broker (not sure) using it as a means to shelter them and their exposure to the leverage they had provided to those firms.
For anyone who bot and is still holding using the argument that today's contracts are leverage for a spike, know that only 36k itm contracts existed as of 9am MT today. The other ~65k were closed for cash, so there isn't nearly as much leverage there as assumed.
When a trade is requested through a broker, they go through a market maker to get the other side of the trade, that trade then goes to the clearing house to put the two pieces together with the DTC. DTC is the back-end stock swapping house. They move stock from firm to firm and keep track of everything. Due to Dodd-Frank (post-2008), the clearing house has to front part of the cost of the transaction up front for T+2 to the DTC. When a stock/bond/etc reaches a certain volatility level, D-F requires they front 100% of share px up front for 2-days to clear the trade.
What happens is that if the clearing house has to use all their cash to clear 1 or 2 stocks, they can't clear any other trades. Now all of a sudden, those other trades start failing. The clearing house can say "no more; we will no longer accept trades for that stock" at which point the broker has to front the money. Brokers don't carry that much cash, so they have to bow to the clearing house.
IF the CH kept allowing trades and the losing side blew up a margin account, the broker has to margin call the acct holder to close the gap. They will start by selling off the acct holder's positions. Any leftover due funds, the broker has to cover as a loss. If they can't cover it, it goes to the clearing house. If the clearing house can't cover it, there is no fallback and the clearing houses go under. The big banks started providing huge overnight loans to all the clearing houses so that they can stay afloat while these trades are clearing AND keep the rest of the market from breaking down.
These rules were put in place post-2008 because it's what caused Lehman to blow-up. They were the clearing house for a lot of HFs that blew up and it all fell back onto them. The new rules require the increase in cash up front for volatile securities, which allows CHs to shut down those trades to prevent a market breakdown, like in 2008.
This is effectively a microcosm black swan event. In theory, it shouldn't be able to happen. But this combination of events - excessive shorts, a short squeeze, popular momentum, all leading to a huge number of options contracts going "in the money", which in turn drove it higher, creating an upward spiral.
My guess regarding Citadel getting involved in buying out Melvin and Citron has to do with them being their broker (not sure) using it as a means to shelter them and their exposure to the leverage they had provided to those firms.
For anyone who bot and is still holding using the argument that today's contracts are leverage for a spike, know that only 36k itm contracts existed as of 9am MT today. The other ~65k were closed for cash, so there isn't nearly as much leverage there as assumed.
So... just spit-ballin' here... but what if very high short-term capital gains rates were instituted? Say, *double* your marginal tax rate.
Would that cut down on some of the fuckery going on?
I obviously haven't given this much thought... but it occurred to me as a possibly policy decision to reduce this sort of horseshit.
Would that cut down on some of the fuckery going on?
I obviously haven't given this much thought... but it occurred to me as a possibly policy decision to reduce this sort of horseshit.
As of 12:45pm:
Value traded in GME today - $12.4b
Value traded in QQQ today - $12.9b
Value traded in SPY today - $28.9b
Those are two of the largest index funds in the country vs. a single, small-cap stock (currently mid-cap; assuming temporarily).
Value traded in GME today - $12.4b
Value traded in QQQ today - $12.9b
Value traded in SPY today - $28.9b
Those are two of the largest index funds in the country vs. a single, small-cap stock (currently mid-cap; assuming temporarily).
It would make a huge difference. A larger difference would likely be requiring trading lag. Right now with high frequency trading, you can buy and sell a position for fractions of a cent in milliseconds. Requiring even 1 second between trades effectively eliminates HFT and takes AI momentum based trading out of the market.
The second piece is changing the tax structure for how HF managers are taxed - cap gains vs. income. Right now, they are taxed at cap gains because they are paid in the form of their investments, which are held >1yr to get L/T cap gains.
Adjusting cap gains based not on income, but wealth, would make a far, far greater difference. Even an incredibly successful Dr or lawyer might end up being worth $10mm max when they retire. If you adjust cap gains to be taxed as income once your net worth>$10mm, then it will not only change how the country generates tax revenue, but also how the incredibly wealthy are taxed, since a large portion of that population lives on l/t cap gains. You'd have to account for things like someone creating an LLC to take out a mtge on their own property (to flatten net worth, etc), but it's do able with enough will.