The GameStop Hedge Fund fiasco, explained. No, this isn’t a bad thing. Some are trying to position the GameStop populist uprising as something bad, even a "Ponzi Scheme." It's not.

NOQ Report ^ | 01/28/2021 | Carl Durrek

[SeekAndFind]

A subreddit, r/WallStreetBets, has caused mass hysteria in the financial markets as many hedge funds and Wall Street elites have lost billions as a result of their GameStop play. Was what they did “market manipulation?” Absolutely. Is that inherently wrong or even illegal. Absolutely not.

Briefly, members of the subreddit noticed that most of the active shares for GameStop were in a short position, meaning hedge funds were betting that the stock price would drop dramatically, making them a lot of money. So, the Redditors put out the word to buy Gamestop stocks and drive the price up. It worked. One can argue it worked better than any other price pumping play in history that wasn’t attached to actual news about a company.

Politicians, trading companies, and Wall Street analysts have called for a moratorium on trades of the stocks until market volatility subsides. In other words, they’re trying to buy time for those who have shorted and even continue to short the stock to get their ducks in order to mitigate damage. It’s a play that works against the little guy in favor of the big guys.

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JD talked about this in-depth on his latest episode of Conservative News Briefs (in its triumphant return after months of being offline). For those who want a shorter breakdown, here’s a brief explainer video from Anything Goes (explicit language):

They’re working against the short squeeze to protect assets, oftentimes their own. THIS is the only thing that’s bad about all of this. Is shorting stocks bad? No. It’s part of the gamble, and anyone who says the stock market isn’t legalized gambling is delusional. Is pumping the stock the way the subreddit did bad? No. Again, it’s all a gamble.

Hedge fund managers are claiming they don’t like volatility. The truth is they don’t like volatility they don’t control. This action by the masses driven by the “little guys” isn’t in the hedge fund managers’ playbook, which is why they’re trying to quash it.

CLICK ABOVE ARTICLE LINK FOR THE VIDEO

[Alberta's Child]

See Post #157. You immediately make everyone a more skillful driver when you force them to actually drive the car instead of letting the car drive them.

[Amberdawn]

I don’t know that Citadel owns Robinhood, but online trading sites do get their money from Hedge Funders.

[Amberdawn]

You are right, in some ways, but I drove a manual transmission truck up and down I-95 for 7 years while eating and drinking breakfasts and lunches.

[RinaseaofDs]

Citadel is the clearing house for Robin Hood. They handle 65% of their trades.

[gogeo]

Excellent for the Gamestop deplorables. This isn’t the first short squeeze, nor will it be the last.

[mewzilla]

Get a load of this...

https://patriots.win/p/11SKBwcLaN/report—robinhood-auto-selling-s/c/

For “users own good”.

If true...holy bleep.

[Amberdawn]

And they get paid a fee for it, I assume.

[RinaseaofDs]

Just wow.

I know for a fact you can’t automatically sell shares on behalf of clients unless you’ve placed an order to do so.

If this is allowed to stand, I’m leaving the US faster than I planned.

[xp38]

Hanky Panky has been around for a while.

[gogeo]

It's been awhile since I had the license, and rules change, but I believe there's a requirement for notice of intent to sell shares with a required time delay.

One thing for sure...the lawyers are going to make a lot of money.

I don't have independent knowledge from this thread, but think of the lawsuits. Retail customers of Robinhood, for example. If they are refusing to take buy orders from customers, that's actionable. Now...if Citadel does have a financial interest in Robinhood, and arm twisted them to stop filling buy orders...just, wow. Again, actionable. Suppose Citadel borrowed the shares from Robinhood to sell short? Shares are usually held in the name of the firm, not the client. Again. Conflict after conflict after conflict. Their legal exposure is larger than their financial exposure, IMO.

[gogeo]

Your remember the manual transmission cars that are relatively easy to drive. I inherited a 1979 Ford F-250, 4:11 gearing, 4x4, 4sp manual trans with rock crusher clutch.

Driving that vehicle is work.

[Varsity Flight]

AOL and others, decades ago.

[drSteve78]

There is a difference between driving and just steering. A three year old can just steer, but should not drive. And anyone with a smartphone texting while in the driver’s seat in a moving car has the attention span of a three year old.