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“On Jan. 28, Robinhood halted trading of several rallying stocks including GameStop and AMC Entertainment” No, Robinhood did not halt trading. They prevented

“On Jan. 28, Robinhood halted trading of several rallying stocks including GameStop and AMC Entertainment” No, Robinhood did not halt trading. They prevented _buying_ Gamestop and only allowed selling which can only do one thing - drive the price down. That’s entirely different. There’s a word for it: manipulation It’s illegal.

maest 6y ago
They did it to avoid going out of business due to DTCC collateral calls. Stop spreading FUD.
- cccc4all 6y ago
  No they did not. The Robinhood co founder stated in every interview that it was not liquidity issue. Listen to his explanations, he never says what were the legal or business justification for stopping the buys and only allowing the sells. His only explanations were that the company took the actions just because.
- mdoms 6y ago
  If you believe this narrative I have a bridge for sale. Here's an obvious litmus test: did they re-open buying for GME after they raised an additional billion[0] which easily covers them in this position? [0] https://www.ft.com/content/9a1b24e6-0433-462a-a860-c2504ea565e4 https://www.ft.com/content/9a1b24e6-0433-462a-a860-c2504ea56...
  - fancy_pantser 6y ago
    They re-opened buying this morning, yes.
    - generj 6y ago
      Not really - they only allowed buying to bring the total position to 5 shares, and then lowered that to 2 shares and now 1 share! And if you already held more than that quantity of shares you couldn’t buy more shares.
      - maest 6y ago
        That's consistent with them being worried about collateral requirements.
- asdffdsa 6y ago
  Only allowing selling and not buying of stock is most certainly manipulation. Please vet your acronyms more thoroughly
- gmethowaway 6y ago
  Can you please elaborate on why DTCC collateral calls or other things should prevent buying GME stock on non-margin accounts, like many brokers did? If you trade more, it actually brings more money to brokers. I'm not talking about options or margin here, that's a different story and broker's risk management is involved.
  - maest 6y ago
    From https://www.bloomberg.com/opinion/articles/2021-01-29/reddit-traders-on-robinhood-are-on-both-sides-of-gamestop https://www.bloomberg.com/opinion/articles/2021-01-29/reddit... 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 $400 for that matter, 6 the more collateral you need. But I suggest you read the entire thing - it does an excellent job discussing what's going on and showing why the current GME narrative makes no sense.
    - gmethowaway 6y ago
      Honestly I'm not getting it. I understand the case when someone initiated the cash deposit and money are not settled yet, and there is a risk for broker that they will never settle on broker's bank account. But if we are talking about buying GME stock in non-margin account with settled money, what's the risk there? If people bought stock on 400$ with settled cash, this cash is already on broker's account, so if it worth 20$ on Wednesday and poeple won't show up, what's the problem here? Brokers even blocked buying GME stock on non margin accounts with settled cash. edit: typos
      - maest 6y ago
rodiger 6y ago
Motivation determines if it's illegal. There's plenty of legal precedent for brokers setting assets to liquidation-only when they might not meet their margin requirements.
- gmethowaway 6y ago
  What was the motivation when multiple brokers disallowed buying GME stock using non margin accounts?

maest 6y ago

They did it to avoid going out of business due to DTCC collateral calls. Stop spreading FUD.

cccc4all 6y ago
No they did not. The Robinhood co founder stated in every interview that it was not liquidity issue. Listen to his explanations, he never says what were the legal or business justification for stopping the buys and only allowing the sells. His only explanations were that the company took the actions just because.
mdoms 6y ago
If you believe this narrative I have a bridge for sale. Here's an obvious litmus test: did they re-open buying for GME after they raised an additional billion[0] which easily covers them in this position? [0] https://www.ft.com/content/9a1b24e6-0433-462a-a860-c2504ea565e4 https://www.ft.com/content/9a1b24e6-0433-462a-a860-c2504ea56...
- fancy_pantser 6y ago
  They re-opened buying this morning, yes.
  - generj 6y ago
    Not really - they only allowed buying to bring the total position to 5 shares, and then lowered that to 2 shares and now 1 share! And if you already held more than that quantity of shares you couldn’t buy more shares.
    - maest 6y ago
      That's consistent with them being worried about collateral requirements.
asdffdsa 6y ago
Only allowing selling and not buying of stock is most certainly manipulation. Please vet your acronyms more thoroughly
gmethowaway 6y ago
Can you please elaborate on why DTCC collateral calls or other things should prevent buying GME stock on non-margin accounts, like many brokers did? If you trade more, it actually brings more money to brokers. I'm not talking about options or margin here, that's a different story and broker's risk management is involved.
- maest 6y ago
  From https://www.bloomberg.com/opinion/articles/2021-01-29/reddit-traders-on-robinhood-are-on-both-sides-of-gamestop https://www.bloomberg.com/opinion/articles/2021-01-29/reddit... 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 $400 for that matter, 6 the more collateral you need. But I suggest you read the entire thing - it does an excellent job discussing what's going on and showing why the current GME narrative makes no sense.
  - gmethowaway 6y ago
    Honestly I'm not getting it. I understand the case when someone initiated the cash deposit and money are not settled yet, and there is a risk for broker that they will never settle on broker's bank account. But if we are talking about buying GME stock in non-margin account with settled money, what's the risk there? If people bought stock on 400$ with settled cash, this cash is already on broker's account, so if it worth 20$ on Wednesday and poeple won't show up, what's the problem here? Brokers even blocked buying GME stock on non margin accounts with settled cash. edit: typos
    - maest 6y ago

rodiger 6y ago

Motivation determines if it's illegal. There's plenty of legal precedent for brokers setting assets to liquidation-only when they might not meet their margin requirements.

gmethowaway 6y ago
What was the motivation when multiple brokers disallowed buying GME stock using non margin accounts?