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The Stock Market; Trading and Investments Thread

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my rant at the misinformation in the media & from newbie investors regarding gamestop

Many traders are mad at Robing Hood for limiting GME trades. What they don't realize is the clearinghouse is requiring more collateral from RH due to the risk of clients trading GME. It's not a conspiracy to make hedge funds rich. The misinformation out there is astounding. They can't just raise margin. They have SEC net capital obligations. Raising margin would just put them at more risk and huge regulatory trouble with the SEC. If a trader gets wiped out due to a fast-moving market, like GME, there is nothing to liquidate. They will owe money if a trade moves against them in a bad way. This is why a clearinghouse is so important. It ensures a proper settlement of funds.

If Gamestop's $GME board was smart, they would issue a huge secondary to take advantage of issuing shares at this mega inflated price.
 
Yeah, that's a fact, but they got spooked too easily. Wealthsimple just disallowed trading the stock on margin but still allowed trading it otherwise, which is the correct response here. Not sure what Robinhood was thinking. Got spooked as I said.

I'm still waiting for the damn casinos though. There's a new one in Peterborough I didn't even know about! Another black jack table to raid.
 
Putting what we think about what just happened aside with GAMESTOP, Funds and Wall Street are NOT stupid. They are highly adaptable. If this group does not hop out, take their profits and be quiet, Wall street will tan their asses. Notice the down move stared as soon as the short squeeze group got notoriety. You cant short squeeze funds out of a stock market that is going down! Nobody can afford to do that! Careful kids that got lucky. Wall street has already started fighting back.
 
I don't play in the stockmarket - I have a guy for that. For me, one of the hard parts of getting my head around it is the terms used; every now and again I have to ask my financial guy to 'say it in English'; my wife tuned out long ago.

What concerns me of this type of activity, originating in chatrooms and forums by folks who may or not know, is the exposure for those from nations and perhaps other entities who's sole goal is to purposefully disrupt the capitalist economy. They probably do it already but they may have found a new set of allies in gamers and citizen-traders who they can manipulate.
 
slickpete83 said:
Careful kids that got lucky.
Click to expand...
Got lucky? They purposely drove up the price of stocks that were being shorted in large number by greedy sheisters and drove those greddy sheisters out of the way. Mission accomplished.
Where does luck come into it?

This wasn't done to make loads of money. It was done to smack certain people down.
And good for them for getting it done.
I'm not involved in any of this, by the way, but fully support greedy hedge fund managers playing around on the fringes of decency and in the regulatory grey areas getting their comeuppance, even if it is very temporary.

That Citron wanker is now going to stop publishing reports on shorting stocks. That's a win.

These people pervert the idea of an open and free market and deserve getting tossed, if even only for a week.


slickpete83 said:
Wall street has already started fighting back.
Click to expand...

What are you talking about?
The price started dropping because all manner of people started selling at massive profits, not because "Wall St started fighting back".
 
lenaitch said:
What concerns me of this type of activity, originating in chatrooms and forums by folks who may or not know, is the exposure for those from nations and perhaps other entities who's sole goal is to purposefully disrupt the capitalist economy.
Click to expand...
What, you mean like people trying to make off like bandits by shorting stocks?
 
Shorting stocks should be illegal. Period.

Its literally a 'bet' on the price; not an investment.

That is more suited to the casino than the stock market.
 
Northern Light said:
Shorting stocks should be illegal. Period.

Its literally a 'bet' on the price; not an investment.

That is more suited to the casino than the stock market.
Click to expand...
shorting should not be illegal , when a high percentage of stock is being shorted , it tells you the fundamentals of the company are bad , thats why the there is a low number of microsoft , amazon etc... shares being shorted , because no ones wants to take the risk when the fundamentals of a comapny are great

so is buying a stock , your literally betting on the price going up lol...
 
I tell ya I fear for the market tmr. Things might get interesting. Seems like most retail investor's stateside have largely been barred from investing in GME. But overseas investment could be a gamechanger. I have no idea about market fundamentals, just feel like something's brewing.
 
SunriseChampion said:
Got lucky? They purposely drove up the price of stocks that were being shorted in large number by greedy sheisters and drove those greddy sheisters out of the way. Mission accomplished.
Where does luck come into it?

This wasn't done to make loads of money. It was done to smack certain people down.
And good for them for getting it done.
I'm not involved in any of this, by the way, but fully support greedy hedge fund managers playing around on the fringes of decency and in the regulatory grey areas getting their comeuppance, even if it is very temporary.

That Citron wanker is now going to stop publishing reports on shorting stocks. That's a win.

These people pervert the idea of an open and free market and deserve getting tossed, if even only for a week.




What are you talking about?
The price started dropping because all manner of people started selling at massive profits, not because "Wall St started fighting back".
Click to expand...
i don't blame u guys for not understanding , you really have to understand the market on deep technical level ; orders , margins, clearing house & regulation etc.., then things will make a whole lot more sense

the real problem is newbie investors buying GME on margin

The biggest risk from buying on margin is that you can lose much more money than you initially invested. A loss of 50 percent or more from stocks bought on margin equates to a loss of 100 percent or more, plus interest and commissions. ... In that scenario, you lose all of your own money, plus interest and commissions

Failure to Meet a Margin Call

The margin call requires you to add new funds to your margin account. If you do not meet the margin call, your brokerage firm can close out any open positions in order to bring the account back up to the minimum value. This is known as a forced sale or liquidation.

now imagine newbie buying at $150 on margin , then price drops to $40 really fast, Robinhood would have to take the lose even after forced sale , and would be in deep sh*t with their clearning house , and a brokerage like Robinhood would never take on that kind of risk , that why steps were taken
and margin was increased to 100% based on price volatility
 
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slickpete83 said:
shorting should not be illegal , when a high percentage of stock is being shorted , it tells you the fundamentals of the company are bad , thats why the there is a low number of microsoft , amazon etc... shares being shorted , because no ones wants to take the risk when the fundamentals of a comapny are great

so is buying a stock , your literally betting on the price going up lol...
Click to expand...

You're describing a casino play.

You may well have an opinion on the fundamentals of a sports team, and choose to place a bet for/against them.

That, however, should not be confused with making an investment; and I don't think anyone would.

The intent of stocks and their means of tradability was never to facilitate inter-day trades or absurd bets.

It was to allow ease of raising capital; by allowing smaller buyers into the market, with limited liability exposure in the event a business failed.

The concept works when you supply capital to a business you find worthy, for a medium to long-term investment.

The business gets your (to pick a number) $1,000; you get some combination of share appreciation that lifts that to say $1,200 over a period of time, and a dividend payment while you wait.

***

The way a business with bad fundamentals should be punished is not by 'shorting' of stock; but by normal investment choices that lower its share price; and less investment capital available to it, and/or demanding
a risk premium in the form of a higher dividend, or forcing them to the bond market.

I say this as someone who makes a decent amount of $$ in the market; though I don't short.

I invest on fundamentals. Businesses I understand, whose books I've read; where the investment makes sense when considering prospective yield, valuations etc.

I then hold those investments for anywhere from a couple of months, to a couple of years, typically selling when I reach my target price; rarely, but sometimes, cutting my loss if I feel I misread the company's prospects.

***

Similarly, I would penalize day trading heavily (moving in/out of stocks on the same day).

That's a move meant entirely to manipulate market prices, not to provide capital to a business.

I wouldn't outlaw someone selling stock the day they buy it; but I would impose a 100% tax rate on any gains on a stock held for less than 72 hours.
 
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slickpete83 said:
you don't understand hedging , & the importance it plays in protecting & managing risk your in portfolio , even a longer term investment portfolio
Click to expand...

My sophistication as an investor is quite solid.

The fact that I disagree w/certain permissions/incentives/allowances in the market does not change that.

I manage risk by not being all-in on one player or one sector.

I manage risk by always holding a certain amount of cash; and otherwise maintain a diversified portfolio, as well as holding non-financial assets.

What you support (and its fine that you do) is a system that I consider far too open to manipulation; and one in which government and retail investors bailed out large financial institutions and those taking high risks.

From my point of view; you have no right to a return on investment or a hedged risk, subsidized publicly or privately by me.

You are free to differ in your perspective.
 
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slickpete83 said:
i don't blame u guys for not understanding , you really have to understand the market on deep technical level ; orders , margins, clearing house & regulation etc.., then things will make a whole lot more sense

the real problem is newbie investors buying GME on margin

The biggest risk from buying on margin is that you can lose much more money than you initially invested. A loss of 50 percent or more from stocks bought on margin equates to a loss of 100 percent or more, plus interest and commissions. ... In that scenario, you lose all of your own money, plus interest and commissions

Failure to Meet a Margin Call

The margin call requires you to add new funds to your margin account. If you do not meet the margin call, your brokerage firm can close out any open positions in order to bring the account back up to the minimum value. This is known as a forced sale or liquidation.

now imagine newbie buying at $150 on margin , then price drops to $40 really fast, Robinhood would have to take the lose even after forced sale , and would be in deep sh*t with their clearning house , and a brokerage like Robinhood would never take on that kind of risk , that why steps were taken
and margin was increased to 100% based on price volatility
Click to expand...



You said Wall St was fighting back by blocking trading when in fact only Robinhood and TD Ameritrade blocked full trading of some of these stocks and Wealthsimple, for example only blocked trading on margin for the reasons you state above.

Robinhood and TD Ameritrade DID NOT have to halt trading altogether.

Even the SEC said everything was functioning fine.
 
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