AAL
Do retail traders need protection? Reddit/WSB names resume rally
- The retail trading world is outraged at the trading limits imposed by
Robinhood (RBNHD) and other brokerages yesterday and questions are
circling about the protections that should be in place for investors.
While
Robinhood cited clearing house requirements as reasons for the stoppage,
it also said "these requirements exist to protect investors and the
markets
and we take our responsibilities to comply with them seriously."
Robinhood
restricted trading in thirteen equities amid a wild week of retail
trading
stemming from the WSB Reddit forum, but those plays are soaring again in
premarket trade: AAL+8%, AMC+57%, BB+17%, BBBY+15%, CTRM+24%, EXPR+43%,
GME+104%, KOSS+102%, NAKD+41%, NOK+4%, SNDL+12%, TR+0.2%, TRVG+12%.
- Investors and policymakers alike lambasted the trading limits,
including Dave Portnoy, Alexandria Ocasio-Cortez and Ted Cruz, accusing
the
trading platform of seeking to protect Wall Street's interests at the
expense of smaller investors. "We need an SEC that has clear rules about
market manipulation and then has the backbone to get in and enforce those
rules," added Sen. Elizabeth Warren, a longtime critic of Wall Street.
"You've got to have a cop on the beat."
- How should market manipulation be defined? We're also talking about
public markets here, where every share is only worth as much as people
are
prepared to pay for it - regardless of the fundamentals of the company.
Regulators can't pick and choose which market participants are able to
play
in the market or the value of healthy share prices (or can they?). The
pros
are also going to have to get a whole lot smarter on how they take bets
against companies if an army of day traders can be rallied within hours
to
make that bet go wrong.
- *Thought bubble:* Should a hedge fund be able to get 10x leverage and
short 140% of a company in a healthy market? Should mob and herd
mentality
of rolling into stocks be curbed? Regulators may want to step in on both
sides, but government bodies may also be fueling the bubble. Easy money
policies from the Fed have also driven consumer out of savings accounts
and
CDs, encouraging more riskier behavior and flows into related products.
|Today, 4:43 AM|45 Comments
Do retail traders need protection? Reddit/WSB names resume rally
- The retail trading world is outraged at the trading limits imposed by
Robinhood (RBNHD) and other brokerages yesterday and questions are
circling about the protections that should be in place for investors.
While
Robinhood cited clearing house requirements as reasons for the stoppage,
it also said "these requirements exist to protect investors and the
markets
and we take our responsibilities to comply with them seriously."
Robinhood
restricted trading in thirteen equities amid a wild week of retail
trading
stemming from the WSB Reddit forum, but those plays are soaring again in
premarket trade: AAL+8%, AMC+57%, BB+17%, BBBY+15%, CTRM+24%, EXPR+43%,
GME+104%, KOSS+102%, NAKD+41%, NOK+4%, SNDL+12%, TR+0.2%, TRVG+12%.
- Investors and policymakers alike lambasted the trading limits,
including Dave Portnoy, Alexandria Ocasio-Cortez and Ted Cruz, accusing
the
trading platform of seeking to protect Wall Street's interests at the
expense of smaller investors. "We need an SEC that has clear rules about
market manipulation and then has the backbone to get in and enforce those
rules," added Sen. Elizabeth Warren, a longtime critic of Wall Street.
"You've got to have a cop on the beat."
- How should market manipulation be defined? We're also talking about
public markets here, where every share is only worth as much as people
are
prepared to pay for it - regardless of the fundamentals of the company.
Regulators can't pick and choose which market participants are able to
play
in the market or the value of healthy share prices (or can they?). The
pros
are also going to have to get a whole lot smarter on how they take bets
against companies if an army of day traders can be rallied within hours
to
make that bet go wrong.
- *Thought bubble:* Should a hedge fund be able to get 10x leverage and
short 140% of a company in a healthy market? Should mob and herd
mentality
of rolling into stocks be curbed? Regulators may want to step in on both
sides, but government bodies may also be fueling the bubble. Easy money
policies from the Fed have also driven consumer out of savings accounts
and
CDs, encouraging more riskier behavior and flows into related products.
|Today, 4:43 AM|45 Comments
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