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HOT TOPIC Reddit r/WSB bankrupts Hedge Fund using Robinhood

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kelvinfernandezm

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Do you guys think Robinhood will be banned and trading restrictions will get tighter from now on? It seems that retail investors are manipulating the markets just like wall street hedge funds.

Here's a quick rundown of what happened this Friday. Someone read through trading reports. They found out that Melvin Capital an investment firm was shorting the Gamestop stock and would close their position this Friday. Word spread around in multiple online trading forums the main one been reddit. The forum users decided to buy Game Stop stocks to prevent the Capitol Firm from collecting on their closing position. The stock goes from around $50 to over $150 in one day. The hedge fund lose their position and goes belly up.


 

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Kevin88660

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Here's a quick rundown of what happened this Friday. Someone read through trading reports. They found out that Melvin Capital an investment firm was shorting the Gamestop stock and would close their position this Friday. Word spread around in multiple online trading forums the main one been reddit. The forum users decided to buy Game Stop stocks to prevent the Capitol Firm from collecting on their closing position. The stock goes from around $50 to over $150 in one day. The hedge fund loses their position and goes belly up.
Sounds like legitimate play.

When you hold a large position close to expiry you take that risk.

Unless the retail is also trading against the hedge fund directly with derivatives bets, it is not a case of illegal manipulation.
 

Zaratustra

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Do you guys think Robinhood will be banned and trading restrictions will get tighter from now on? It seems that retail investors are manipulating the markets just like wall street hedge funds.

Here's a quick rundown of what happened this Friday. Someone read through trading reports. They found out that Melvin Capital an investment firm was shorting the Gamestop stock and would close their position this Friday. Word spread around in multiple online trading forums the main one been reddit. The forum users decided to buy Game Stop stocks to prevent the Capitol Firm from collecting on their closing position. The stock goes from around $50 to over $150 in one day. The hedge fund loses their position and goes belly up.


You should not expect Ferrari when you buy Fiat
 

MitchC

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“wall street bets trader turns $53k into $11m+”

I’m in the wrong business...
 
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c4n

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Do you guys think Robinhood will be banned and trading restrictions will get tighter from now on? It seems that retail investors are manipulating the markets just like wall street hedge funds.

If I understand this correctly: wall street hedge funds get some of their own medicine, and don't like it?

:rofl:
 

Martzee

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Do you guys think Robinhood will be banned and trading restrictions will get tighter from now on? It seems that retail investors are manipulating the markets just like wall street hedge funds.

Here's a quick rundown of what happened this Friday. Someone read through trading reports. They found out that Melvin Capital an investment firm was shorting the Gamestop stock and would close their position this Friday. Word spread around in multiple online trading forums the main one been reddit. The forum users decided to buy Game Stop stocks to prevent the Capitol Firm from collecting on their closing position. The stock goes from around $50 to over $150 in one day. The hedge fund loses their position and goes belly up.


No, there is no reason for banning RH. They are not doing anything illegal. Well, unless the SEC changes the rules. But it is not RH doing anything, it is the members of the community at Reddit who got together and started pumping the market, particularly GME, and now BB and NOK. So, you cannot ban a brokerage house for their clients being at Reddit and pumping the markets.

Out of curiosity, I have joined the WSB group at Reddit. There are a few really good posts out there to read. What is sad and stunning are the reactions of the members' to those posts. It is actually horrifying. Some post a relatively good article on the recent pump and dump stock $BB and the reactions are stunning. Stunning in a negative way. Full of cursing, naming, acting childish. I have not seen a single post-reaction that could add any value. All these people there presented so far were ignorance and stupidity. It indicates that many just join the frenzy with a complete lack of understanding of what they are doing, riding the bandwagon, and maybe, in the end, they will be the lucky ones. But most will just end up holding the bag.
 

kelvinfernandezm

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If I understand this correctly: wall street hedge funds get some of their own medicine, and don't like it?

:rofl:
pretty much, the guy that got screwed is now calling for the feds to investigate

Stunning in a negative way. Full of cursing, naming, acting childish. I have not seen a single post-reaction that could add any value. All these people there presented so far were ignorance and stupidity. It indicates that many just join the frenzy with a complete lack of understanding of what they are doing, riding the bandwagon, and maybe, in the end, they will be the lucky ones. But most will just end up holding the bag.
Lol don't be put off by the way those users act. If you missed it look on the right side and it says "like 4chan found a bloomberg terminal" if you know anything about 4chan you'll understand why they act like that.Screenshot_2021-01-26 r wallstreetbets.png
 
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Martzee

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pretty much, the guy that got screwed is now calling for the feds to investigate


Lol don't be put off by the way those users act. If you missed it look on the right side and it says "like 4chan found a bloomberg terminal" if you know anything about 4chan you'll understand why they act like that.
I think you didn't read my post well. Re-read it.

And to help you understand what I just wrote about, here are some posts under a well-written post in that group. Judge for yourself. There is about 150 more like this...

1611681162480.png
 

kelvinfernandezm

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I think you didn't read my post well. Re-read it.

And to help you understand what I just wrote about, here are some posts under a well-written post in that group. Judge for yourself. There is about 150 more like this...

View attachment 36513
Lol you can't tell this guys are just trolling around? Look how many rockets they post.
 

thechosen1

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Do you guys think Robinhood will be banned and trading restrictions will get tighter from now on? It seems that retail investors are manipulating the markets just like wall street hedge funds.

Here's a quick rundown of what happened this Friday. Someone read through trading reports. They found out that Melvin Capital an investment firm was shorting the Gamestop stock and would close their position this Friday. Word spread around in multiple online trading forums the main one been reddit. The forum users decided to buy Game Stop stocks to prevent the Capitol Firm from collecting on their closing position. The stock goes from around $50 to over $150 in one day. The hedge fund loses their position and goes belly up.



The hedge funds should suffer the risks they knowingly took.

The question is, do regulators have any integrity?

(This is not a political question, it's a question about the stock market) - the answer historically seems to be no.

So we can probably expect some regulatory backlash that will stop the "little guy" from screwing up the game for the "big guys."
 

kelvinfernandezm

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The hedge funds should suffer the risks they knowingly took.

The question is, do regulators have any integrity?

(This is not a political question, it's a question about the stock market) - the answer historically seems to be no.

So we can probably expect some regulatory backlash that will stop the "little guy" from screwing up the game for the "big guys."
Yup, that's what I'm thinking. To trade in the US you need at least $250,000 in your bank account. Robinhood allows you to trade stocks without having that much money. We'll see how this one ends.
 

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WillHurtDontCare

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BizyDad

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Kak

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Crazy. Shows the volatility driven by a new generation of “traders.”

Pride comes before a fall... These stocks only go up, Dave Portnoy followers are going to get burned just as bad.
 

Kak

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Woops I think I meant $25,000 that you need to maintain in a broker's account to be a day trader. I could be wrong.
I don’t think this is right man. Those Robinhooders trade with like $60 in their accounts and even buy fractional shares of companies.
 

kelvinfernandezm

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I don’t think this is right man. Those Robinhooders trade with like $60 in their accounts and even buy fractional shares of companies.
I meant traditional day traders before Robinhood. That's why Robinhood might get shut down because they made it easy to day trade.
 

thechosen1

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Crazy. Shows the volatility driven by a new generation of “traders.”

Pride comes before a fall... These stocks only go up, Dave Portnoy followers are going to get burned just as bad.

GME will have an epic crash, it will just be interesting to see how long it can be staved off.

It appears to be mostly driven by the short squeeze, but exacerbated by WSB traders trying to really milk it.

I think it's pretty great. The hedge funds signed up for this.
 

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thechosen1

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Woops I think I meant $25,000 that you need to maintain in a broker's account to be a day trader. I could be wrong.

That's just to avoid pattern day trading restrictions.

I guess what you'd call most Robinhood traders would be "swing traders," not "day traders," but of course there are lots of them with ungodly amounts of money. I cringe at those screenshots.
 

kelvinfernandezm

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GME will have an epic crash, it will just be interesting to see how long it can be staved off.

It appears to be mostly driven by the short squeeze, but exacerbated by WSB traders trying to really milk it.

I think it's pretty great. The hedge funds signed up for this.
If it'll have an epic crash would it make sense to short it?
 

Rabby

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Taking a naked short position was stupid. Never take a position that can ruin you if it goes the wrong way... that should be common sense. I'm sure there are some among the reddit gang who are making the same mistake. For the love of all that's holy use options and insure your positions if you can't afford the maximum loss.
 

Ravens_Shadow

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I don’t think this is right man. Those Robinhooders trade with like $60 in their accounts and even buy fractional shares of companies.
1611724897524.png
 

ZF Lee

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No, there is no reason for banning RH. They are not doing anything illegal. Well, unless the SEC changes the rules. But it is not RH doing anything, it is the members of the community at Reddit who got together and started pumping the market, particularly GME, and now BB and NOK. So, you cannot ban a brokerage house for their clients being at Reddit and pumping the markets.

Out of curiosity, I have joined the WSB group at Reddit. There are a few really good posts out there to read. What is sad and stunning are the reactions of the members' to those posts. It is actually horrifying. Some post a relatively good article on the recent pump and dump stock $BB and the reactions are stunning. Stunning in a negative way. Full of cursing, naming, acting childish. I have not seen a single post-reaction that could add any value. All these people there presented so far were ignorance and stupidity. It indicates that many just join the frenzy with a complete lack of understanding of what they are doing, riding the bandwagon, and maybe, in the end, they will be the lucky ones. But most will just end up holding the bag.
memes are great though...

TBH, we could expect such ignorance.
What do you expect when stimulus money get sent to people who have had ZERO experience in stock/options trading, and they get more time on their hands to download RH and do the punts?

And WSB also have their own culture, just as we do here in TFLF-hence the rockets, gay bears and 'to the moon' quotes.



“wall street bets trader turns $53k into $11m+”

I’m in the wrong business...

Less of a business, more of a speculation.
Some Redditor OG held GameStop positions from 2019 (when it was in the red) till now...and only sold mere pittances even when millions in the green...
https://www.reddit.com/r/wallstreetbets/comments/l5nphz View: https://www.reddit.com/r/wallstreetbets/comments/l5nphz/gme_yolo_update_jan_26_2021/
 

James Fake

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I think there is a misconception on WSB a bit.

The Reddit community as a whole mostly consists of millennials.

In particular, WSB are much, much smarter than they put on. It's like a bunch of us at a Summit totally cracking jokes and talking shit all while talking about a serious subject lol.

The "bunch of kids in a basement spending stimmy money" actually works in their favor, and was the same thing that totally destroyed Tesla shorters. Under-estimation is quite the edge in a fight. If you don't think some of the PPP or EIDL money hasn't funneled or is inside Tesla stock (or in other stock contributing to the overall equity market exploding), then you may want an awakening, and I don't think kids in a basement are doing that.

Honestly; I think the "kids in their moms basement" narrative was dropped by the big guys awhile back when they realized it wasn't.

What I like about WSB is that their BS filter is on another level, and things will get called out for what it is and ain't very fast.

With all that said....

THIS IS A.... MOVEMENT. NEVER go against a movement lol, as its one of the most powerful things in the world. I think probably most of us here would like to give a huge middle finger to the big guys.

Although it is and will be a pump and dump when its all said and done; the mechanisms of it is extremely unique and never seen before.

Most think; these WSB guys will fall flat on their face.. will they though? I mean, to be honest; most of these guys got in around $30-50. Yes, you see lots of comments about $100-150, but even then; when this things goes to $1k.. Do you think the guys with $150 entries are the ones falling on their face?

Or will it be the media-induced greedy non-WSBer coming around trying to get in on the action buying in at $500+?

The scary part on all of this and "The Movement"? Its exposed something that can be replicated toward other highly short floated stocks. (*achem* AMC. disclaimer: I am balls deep in that from an earlier entry).

Mob Mentality: During a riot; once they see that they can burn down a building and it went successfully; they go to find another building.

Use smart stops, move them up as things move up, learn to get out when you hear average Joes actually buying the hype (and not just talking about it) because their stupider neighbors are richer cause of it, and learn to pull profits on the way up and can say "ah shit, should of held... oh well" as you turn around to smash a Pro V1x down a fairway from your new Taylormade driver.

Then you'll do fine in any bubble. The most gains are in the last stretch anyways.. and we are at the Belief stage where the doubters actually give in and "believe" and put their money in. Then Thrill, then Euphoria. Then GTFO lol.

Rinse, repeat.

$1k. then AMC.
 

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