Economy stonks v14, brokergate

[rob mafia]

previous: https://forums.sherdog.com/threads/stonks-v13-gamestonkegeddon.4159963/

v13 sucked ass. ironic, since it filled up in like a day.

robinhood, interactive brokers, TDA/schwab, and webull all restricted gme/amc/bb/etc trading. webull rescinded it later in the day, though.

if you want to leave rh for gme reasons, move to a broker that didn't restrict it. ACATS generally costs $75 and most brokers will waive the fee for incoming portfolios. positions expiring within a week or so might not transfer.

(i have accounts with webull, ibkr, tda, and rh - and i'm not really happy with any. they all have tradeoffs. i keep meaning to use tastyworks, but probably won't ever use them unless they cut their options fees [why does the options-based platform/brokerage have free stock trading, but .65/contract for options? why not... the inverse?] )


@brackis1
@44nutman
@MMAisGod
@reveler
@HockeyBjj
@kahiljabroni
@BIKES!
@Tycho Brah
@G-19
@milkmandanl
@Revolver
@asdffdsa
@Final Say
@Last Samurai
@Wadtucket
@HOLA
@Travis Alexander
@Kowboy Karl
@Cuzcatlan
@PaleMoonlight
@chardog
@SiKnSiN



edit: re: brokergate, here's some pertinent info, instead of all the rampant tin foil/fake news/etc that's rampant


https://www.barrons.com/articles/why-did-robinhood-stop-gamestop-trading-51611967696

Theories abounded online about Robinhood—a mobile-first, low-cost brokerage founded on the idea of expanding access to trading to more people—being in league with the “men in suits” at hedge funds on the losing side of those trades. Politicians on Twitter from across the political spectrum condemned the broker’s move. But Robinhood’s provided reason that it needed to restrict trading in those stocks until it could increase its collateral with the Depository Trust & Clearing Corporation, or DTCC, holds water.

Explaining that requires getting into a bit of market plumbing and elements of the trading process that usually don’t get much attention.

When an investor orders their broker—Robinhood or E*Trade, for example—to buy or sell a security, the broker accepts the trade and sends it to an exchange like the New York Stock Exchange or the Nasdaq. The exchange then matches buyers with sellers, and from the investor’s perspective, the transaction is as good as done. But there are still some mechanics that need to be worked out behind the scenes.


Investors may have noticed that the cash proceeds from selling a stock aren’t immediately available to withdraw from their account after a trade is completed—that usually takes a business day or two. Back in the day, that time was spent physically exchanging stock certificates between brokers. Today’s trading volumes make that an impossible task. (Curious readers should learn about the 1960s Paperwork Crisis.)

Today, after a stock exchange completes a trade, it sends the information to the DTCC, which keeps track of brokers’ books. The DTCC is a clearing house, an important part of the financial system. Clearing houses not only process and complete trades in an efficient manner, they help limit systemic risk. The clearing house promises to make good on all trades that happen regardless of what happens to an individual broker.

The DTCC is responsible for transferring ownership of the stock from the seller’s broker to the buyer’s broker—and vice versa for the cash involved. Rather than doing that after every single one of the trillions of dollars of trades each day, the DTCC waits until it can net several trades into “one position per security, per client, per settlement date,” according to its website. The settlement date is the day when the cash and securities involved in a trade actually change hands.

At the settlement date, which falls two days after the investor places their trade, the seller’s broker must deliver the stock being sold and the buyer’s broker must provide the cash. The DTCC guarantees that the transfer will happen and eliminates the risk of a single broker going under rippling across the market.

In exchange, the DTCC collects a fee per trade and requires some collateral from the brokers to ensure they have the assets to complete the transaction. It’s like putting a refundable deposit on a purchase that reduces the middleman’s risk while the package is in the mail, with full payment due once it arrives. The DTCC’s collateral requirements for brokers are calculated by a much more complex formula, based on the specific shares’ notional value, volatility, and other variables.

For a relatively risk-free transaction—in liquid, less volatile stocks like, say, Apple (AAPL) or Microsoft (MSFT)—that collateral requirement could be around the order of 10% of the transaction value. For a stock like GameStop this week, the DTCC’s formula might spit out a collateral requirement several times higher than that because it takes on greater risk. That’s because the DTCC could be on the hook to deliver an asset that’s worth a materially different amount on the settlement date than the trade date if one of the brokers involved can’t complete the transaction.

When traders are using margin to buy, the broker needs to come up with the cash on its own. And when there’s a large imbalance between a broker’s buy and sell orders for a given security, it doesn’t net out as cleanly at the end of the day, meaning more collateral is required.

All of those factors applied to Robinhood and Gamestop on Thursday. The stock traded in a wide range from $112 to $438 on heavy volume, its users were predominantly placing buy orders for the shares, and many were using margin.

And those are the reasons the DTCC asked brokers for more collateral for each such trade. The clearing house didn’t want to be caught with brokers not having the funds they need to settle. Therefore, Robinhood and others restricted buying on these highflying stocks until it could come up with enough cash to pay collateral. Robinhood allowed users to sell the stocks because the selling broker puts up the shares as collateral, not cash.

Since then, the brokerage has drawn down its credit lines at several banks and brought in $1 billion from existing investors to fund additional collateral requirements. On Friday, Robinhood reopened buying of Gamestop and other recently popular stocks.

The DTCC says it processes trillions of dollars of transactions a day, including equities, bonds, mutual funds, and derivatives. It said that collateral requirements for all of its broker clients were $33.5 billion on Thursday, up from $26 billion the day before.

and an interview with webull's ceo from thursday evening:



ibkr email friday evening:

Dear Client, We are seeing unprecedented volatility in GME, AMC, BB, EXPR, KOSS and a small number of other U.S. securities that has forced us reduce the leverage previously offered to these securities and, in certain instances, limit trading to risk reducing transactions. IBKR currently has no restrictions on trading shares in those companies, and customers can open or close positions in those shares. Like many other brokers, IBKR placed options on certain of those stocks in closing only earlier this week. The plan is to lift those restrictions in an orderly manner while closely monitoring market conditions. To be clear, IBKR has not restricted clients’ ability to close existing positions in any of the U.S. securities subject to market volatility, and does not plan to do so.

robinhood's crazyass list of ~50 securities' retrictions

 

[brackis1]

Thanks for keeping these updated Rob.

Please for the love of god people: don't believe every retardo contextless screenshot someone is promoting on reddit or twitter.

 

[Wadtucket]

But are you a well paid dirty little whore?

I'm gay and my dick is small

 

[fordman7795]

I'm gay and my dick is small

But are you an autist?

 

[Wadtucket]

But are you an autist?

No, I'm a retard. We are Legion.

 

[brackis1]

Welp indexes down again on the futures market; glad I kept that SPXU SQQQ and SDOW triple threat on. Will be interesting to see if Spacs get hit in favor of meme stonks or not.

 

[brackis1]

Bumping this so tardz stop posting in the old thread

 

[reveler]

pledge allegiance to the united stonks of america

 

[Last Samurai]

Isn't it today that a bunch of WME shorts were set to expire?


Anyone wanna predict how this all plays out?

 

[reveler]

Isn't it today that a bunch of WME shorts were set to expire?


Anyone wanna predict how this all plays out?

i predict lurking and shitposting

 

[PaleMoonlight]

Thanks for the new thread.

Still holding. Let’s go!

 

[CatchnShoot]

Do you folks have favorite research resources?

Eg) I want to park some money or graphene production & Lithium mines. Do any of you recommend a particular database to compare the companies in a given sector?

 

[Cuzcatlan]

I'm loading up on PGX and SCHZ!
Might start a large position on SCHP and SCHQ.

 

[CatchnShoot]

I'm loading up on PGX and SCHZ!
Might start a large position on SCHP and SCHQ.

If you like ETF’S check out Ark.
ARKK—innovation
ARKQ—robotics/autonomic tech
ARKG—genomics

 

[kahiljabroni]

Anyone know that silver stock everyone was playing?

 

[Last Samurai]

Anyone know that silver stock everyone was playing?

First Majestic Silver Corp (AG)

plus SLV and PSLV

 

[no fat chicks]

Bionano is my pick

 

[BIKES!]

To the fucking moon

 

[Final Say]

v13 sucked ass. ironic, since it filled up in like a day.

robinhood, interactive brokers, TDA/schwab, and webull all restricted gme/amc/bb/etc trading. webull rescinded it later in the day, though.

if you want to leave rh for gme reasons, move to a broker that didn't restrict it. ACATS generally costs $75 and most brokers will waive the fee for incoming portfolios. positions expiring within a week or so might not transfer.

(i have accounts with webull, ibkr, tda, and rh - and i'm not really happy with any. they all have tradeoffs. i keep meaning to use tastyworks, but probably won't ever use them unless they cut their options fees [why does the options-based platform/brokerage have free stock trading, but .65/contract for options? why not... the inverse?] )


@brackis1
@44nutman
@MMAisGod
@reveler
@HockeyBjj
@kahiljabroni
@BIKES!
@Tycho Brah
@G-19
@milkmandanl
@Revolver
@asdffdsa
@Final Say
@Last Samurai
@Wadtucket
@HOLA
@Travis Alexander
@Kowboy Karl
@Cuzcatlan
@PaleMoonlight
@chardog
@SiKnSiN

Was very happy with webull until they restricted. CEO’s interview about it calmed me down though and they allowed buying a few hours later. Think I’ll stay put for now

 

[D 1 Wrestler]

Billionaire playing along