Also translation: "We think you'll come back, but if the people who pay us - the hedgefunds go under - then we'll be shit out of luck too. Sorry not sorry".
What a betrayal of their customers. Really going mask-off with what it means for a startup to "democratize" an industry: allowing the little guy to chip in, but never actually compete with the big boys.
Sure with broad strokes, it generally sucks when a tech company makes unilateral decisions for its customers, whether that's restricting which stocks you can buy or whether you can put unauthorized apps on your iPhone.
But I find it particularly egregious because the major principle of RH was that it was on the side of the everyman rather than institutions.
And yet their entire business model is that they offer it for free because they sell access to your orders to market makers so that they front run your transaction.
Yes and no. At no point did Apple sell me on the idea that I'd have an open computer in my pocket. In fact, they aggressively sell me on the opposite, and make it clear that they act as gate-keepers to what apps can and can't be in my pocket. Totally legitimate to take issue with that, but I think there's a marked difference between doing that and Robinhood arbitrarily preventing folks from doing these trades.
I asked on twitter but didn't really get a response to this but I'm curious if someone involved in the industry can answer this for me:
If Robinhood is only allowing users to sell, can they choose to sell* (route the customer's sell order) to hedge funds that need to close out their short positions? Is that a thing they can do?
*EDIT: I realize that robinhood is passing along these orders to their market maker of choice - so my question really is that can the market maker here preferably sell to hedge funds looking to close their short positions?
Hedge funds don't use Robinhood, so this won't affect their ability to buy or sell. The price plummeted today because of Robinhood and other small brokerages restricting trading the day before lots of shares would have to be purchased to cover in the money options.
So, many retail users of Robinhood and other brokerages couldn't buy, could only sell, while hedge funds and other institutions could continue to do what they want.
The rules should be the same for everyone, all of the time. If Jane StockPicker can't buy a security, then nobody else should be able to. I'm honestly furious about this. I made a small amount of money on GME and cashed out a couple days ago - the shorts were in a bad spot, too bad - so seeing how other retail investors are being screwed over here makes me feel sick.
Oh, and Melvin Capital (one of the short sellers who has been most screwed by taking a bad position) was bailed out by Citadel, and guess who one of Robinhood's investors is?
I'm not exaggerating when I say that there needs to be a congressional hearing and SEC investigation. You can say what you want about retail traders exchanging ideas on WSB, a public forum, but closing down trading for retail investors cost them a lot of money early and why were hedge funds able to short a stock so heavily?
Pending investigation, this is a serious problem and I think there is likely to be ongoing corruption here.
You also cannot search for the short-squeezed stocks from this whole WSB push. They unlisted GME, AMC etc on Robinhood. Searching for them returns nothing. That feels really wrong.
Sorry, it looks like it was talked about too much on social media, causing the price to go up. The people in charge want it to go down, so it's blocked. Thanks for choosing Robinhood!
AAL is definitely the fishiest of the bunch, it's not even close to back to precovid levels, and it's a reasonable buy for anyone who expects travel to return to normal at some point.
It reads like they got a list of positions to halt buying on from their investers.
I haven't minded Robinhood's repeated failures to keep their service operating when market volatility is high, because I'm not trying to time the market. But this... this is entirely unacceptable.
As luck would have it, a S Korean asset managment company sold its considerable holding (creating what in normal times would be a classic stock overhang) just when retail trading platforms had selectively blocked stock buys for GME et al.
And so there must have been an additional interest for the seller, in addition to making only a massive amount of cash off of the past week. I am curious about what other incentives they might have been offered to offload now, as opposed to next week.
Wow this statement seems much worse than saying nothing.
I am even willing to give Robinhood the benefit of the doubt here, I know it feels like a conspiracy against retail investors, maybe it is, but the stock markets are an extremely complex system and we don't know all of Robinhood's own risks and factors going into this decision.
However, to weigh in without addressing the reasoning at all and only link to resources for people to "educate themselves" is so absurdly out of touch. Maybe they should write up some nice shiny content marketing for hedge fund managers to educate themselves about risk exposure.
You absolutely can. "Expect" doesn't necessarily mean "think will happen". It can also refer to having "expectations" of responsibility, which is good. If you don't, then the irresponsible will never hear any criticism of their behavior. How clear it was that they were going to misbehave is beside that specific point.
If you read this drivel, and don't close your Robin Hood account today, then you're part of the problem. I closed mine and I hope everyone else does too.
I read a comment on reddit recently that is pertinent. The prey in Africa, ie. wildebeests and buffalo, are extremely powerful. But a handful of lions make them scatter out of fear. But if the prey were more organized, they could trample every single one of those predators to the point where they could kill them off. It's the power of organization that helps the prey defeat the predators. This is the exact same thing here. As long as a handful of billionaires tell the retail investor what to do, the billionaires will keep making money off of them.
Just waiting for my trades to close so I can cash out. I was only holding VTI and a tiny amount of BTC, so I have no horse in this race, but I'm certainly not waiting for them to pull other shenanigans on me.
Unfortunately the account deactivation story is quite poor.
Under Settings > Account Information > Deactivate Account you're just sent to a customer service email form. They say it takes 1-3 business days to process.
As a side note, you have to close out all of your positions and transfer out all of your money before you're allowed to close the account. This seems unusual to me from experiences with other brokers.
From my understanding the average retail broker will allow you to transfer you assets out to another brokerage. You can do this as part of closing your account.
While just transferring money out separately and keeping the account open longer isn't a big deal, there's tax and other financial implications to having to close your positions instead of transfer them. You'll have to realize capital gains. You'll also have multiple banking days in which the price could move up while your money is transferred to another brokerage to re-buy the shares.
You should be able to initiate the transfer from the target brokerage. For example in TD Ameritrade, Account -> Contribution -> Account transfer from another brokerage
I don't mean to recommend IB as opposed to other brokerages in the current moment, I pasted their link because I transferred an account into IB in this way several months ago so I know it works.
I transferred from Robinhood to ETRADE a year ago. ETRADE has been good to me. still $0 commission trades, faster trade execution than Robinhood, pre-market and post-market trading, Pink Sheets for small but fun gambling.
and most importantly, they haven't pulled any of the shenanigans that Robinhood has pulled today or had any of the server crashes that Robinhood is notorious for.
Closing the account is one thing, but I didn't expect that the markets can be manipulated in such a blatant manner in the U.S. So much for free markets.
Reminds me of how a casino can kick anyone out just because they are winning too much. I think everyone knows that the stock market is rigged but moves like this just completely drop any kind of pretense.
82 comments
[ 4.7 ms ] story [ 187 ms ] threadBut I find it particularly egregious because the major principle of RH was that it was on the side of the everyman rather than institutions.
The "major principle" is to make billions of dollars by owning the market, as it always seems to be with these silicon valley startups
Apple Inc sells me on a closed up device, which is fine.
Some Apple loyalists explain to me that I don't know what I want and that Apple Inc's ideology is the one true way.
Personally I have both an iPhone and an Android. Locked-down personal device and a customizable dev phone ¯\_(ツ)_/¯
If Robinhood is only allowing users to sell, can they choose to sell* (route the customer's sell order) to hedge funds that need to close out their short positions? Is that a thing they can do?
*EDIT: I realize that robinhood is passing along these orders to their market maker of choice - so my question really is that can the market maker here preferably sell to hedge funds looking to close their short positions?
So, many retail users of Robinhood and other brokerages couldn't buy, could only sell, while hedge funds and other institutions could continue to do what they want.
The rules should be the same for everyone, all of the time. If Jane StockPicker can't buy a security, then nobody else should be able to. I'm honestly furious about this. I made a small amount of money on GME and cashed out a couple days ago - the shorts were in a bad spot, too bad - so seeing how other retail investors are being screwed over here makes me feel sick.
Oh, and Melvin Capital (one of the short sellers who has been most screwed by taking a bad position) was bailed out by Citadel, and guess who one of Robinhood's investors is?
I'm not exaggerating when I say that there needs to be a congressional hearing and SEC investigation. You can say what you want about retail traders exchanging ideas on WSB, a public forum, but closing down trading for retail investors cost them a lot of money early and why were hedge funds able to short a stock so heavily?
Pending investigation, this is a serious problem and I think there is likely to be ongoing corruption here.
Anyway, here's how we're doing the exact opposite. Our real customers have indicated that they want the following stocks to drop in price:
> $AAL, $AMC, $BB, $BBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG
"We’re committed to helping our customers navigate this uncertainty." makes much more sense when read a different way.
It reads like they got a list of positions to halt buying on from their investers.
https://www.marketwatch.com/story/large-gamestop-shareholder...
The optics for this seem poor. As for the smell, more of a stench. [Edit to add: poor and smelly for the retail trading platforms, that is.]
I am even willing to give Robinhood the benefit of the doubt here, I know it feels like a conspiracy against retail investors, maybe it is, but the stock markets are an extremely complex system and we don't know all of Robinhood's own risks and factors going into this decision.
However, to weigh in without addressing the reasoning at all and only link to resources for people to "educate themselves" is so absurdly out of touch. Maybe they should write up some nice shiny content marketing for hedge fund managers to educate themselves about risk exposure.
I read a comment on reddit recently that is pertinent. The prey in Africa, ie. wildebeests and buffalo, are extremely powerful. But a handful of lions make them scatter out of fear. But if the prey were more organized, they could trample every single one of those predators to the point where they could kill them off. It's the power of organization that helps the prey defeat the predators. This is the exact same thing here. As long as a handful of billionaires tell the retail investor what to do, the billionaires will keep making money off of them.
Under Settings > Account Information > Deactivate Account you're just sent to a customer service email form. They say it takes 1-3 business days to process.
As a side note, you have to close out all of your positions and transfer out all of your money before you're allowed to close the account. This seems unusual to me from experiences with other brokers.
From my understanding the average retail broker will allow you to transfer you assets out to another brokerage. You can do this as part of closing your account.
While just transferring money out separately and keeping the account open longer isn't a big deal, there's tax and other financial implications to having to close your positions instead of transfer them. You'll have to realize capital gains. You'll also have multiple banking days in which the price could move up while your money is transferred to another brokerage to re-buy the shares.
I don't mean to recommend IB as opposed to other brokerages in the current moment, I pasted their link because I transferred an account into IB in this way several months ago so I know it works.
https://robinhood.com/us/en/support/articles/transfer-stocks...
I can't find a history that shows when they added this, but it appears they at least added transfers in a few years ago:
https://www.reddit.com/r/RobinHood/comments/6tre6o/transfer_...