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Message
re: Holding AMC Thread- Diamond hands unite
Posted on 6/13/21 at 11:47 am to slackster
Posted on 6/13/21 at 11:47 am to slackster
quote:So the hidden nature of those trades, and the ability of MMs to route those trades thru a hidden, and unregulated system does not bother you? Not dark pool, but some MMs were fined for processing their trades before retail, even though the retail orders originated first. If they have the ability to do that, thereby manipulating pricing, then holy shite, dark pools are on on a whole other level!
Likely? No, not really. Dark pools have a negative connotation but the vast majority of trades there are simply designed to spread out very large blocks efficiently.
If the true price is $1500, and it is being hidden thru dark pools, I can easily see why they would do this, especially in case of a stock that is 80% owned by retail. Imagined the FOMO if the stock was just at $100. They are currently routing half of all trades thru dark pools at the current level. IMO, every trick in the book will be used to keep the price down, and lower it. The alternative is Armageddon for them.
quote:
Robinhood and others did that because of capital requirements. I know it’s not a great story, but it’s almost certainly the case. No different than you buying and selling in a day and having to clear funds by settlement in your own account. They had to raise a ton of extra capital from investors during that ordeal. They were about to be fricked. It wasn’t nefarious Citadel pressure or some BS.
Look, I’m no fan of payment for order flow. I think Robinhood is a net negative and ultimately hurts retail investing long term, but that’s a story for another day. I’m no fan of hedge funds either. I have said time and time again I want y’all to kill it. I truly do, even if I think your logic is loopy.
This is where I 100% disagree. Their was a reason why congressional hearings were called. The move to restrict buying during an upswing, stunk to high Heaven. Especially considering that RH's major source of revenue was from institutions like Citadel who had extremely and substantial losses if people continued to have the ability to buy. Did you also forget that Vlad gave different excuses on different days, during the outcry? He finally settled on the "capital requirements" excuse.
At the end of the day, you have MM's like Citadel, who had a large investment that was going south. They also had the ability to influence brokers who they were paying for order flow. At the very least, an MM should not be in this kind of conflict of interest. It's telling that you have politicians like AOC, Maxine Waters, AND Ted Cruz on the same side of an issue.
3
Posted on 6/13/21 at 12:14 pm to greygoose
quote:
This is where I 100% disagree. Their was a reason why congressional hearings were called. T
I thing Congress is far worse than financial institutions, so forgive me for erring on the side of the latter.
quote:
So the hidden nature of those trades, and the ability of MMs to route those trades thru a hidden, and unregulated system does not bother you?
It’s not unregulated. Not sure how that misunderstanding came to be. Anonymity =/= unregulated.
quote:
f the true price is $1500, and it is being hidden thru dark pools, I can easily see why they would do this, especially in case of a stock that is 80% owned by retail. Imagined the FOMO if the stock was just at $100. They are currently routing half of all trades thru dark pools at the current level. IMO, every trick in the book will be used to keep the price down, and lower it. The alternative is Armageddon for them.
But that’s ignoring the dynamics of the current market prices and volumes. Plenty in this very thread have sold already. Hedges that are covering could have easily bought from them.
Where the conspiracy really loses any validity it may have had is the failure to explain why everyone under the sun wouldn’t take advantage of this, if true. Why wouldn’t institutions and other hedges obliterate this inefficiency and arbitrage the shite out of it? Why wouldn’t all the long money out there drive up the price (from their demand) in the open market and then sell it in these dark pools? Thats why the theory is hogwash IMO - if they’re having to cover at $1500/shr in dark pools, and retail owns so much but isn’t selling (which is obviously BS too), then the price on the open market would very quickly reach equilibrium.
Vlogs are really trying to float this idea that shorts are covering at $1500/shr while John Doe is happily selling his AMC shares on Robinhood for $45. That makes zero sense. The stock wouldn’t trade for $45-$50 all week if there was an opportunity to sell it in high volumes on another exchange for $1500.
This post was edited on 6/13/21 at 12:26 pm
Posted on 6/13/21 at 12:24 pm to greygoose
quote:
Especially considering that RH's major source of revenue was from institutions like Citadel who had extremely and substantial losses if people continued to have the ability to buy. Did you also forget that Vlad gave different excuses on different days, during the outcry? He finally settled on the "capital requirements" excuse.
Robinhood nearly failed. Plain and simple. The fact they tried to hide it isn’t surprising. Drew down their credit lines and raised a billion in additional investments in order to keep the doors open. You don’t do that if it’s simply a matter of Citadel putting pressure on you.
Your point about the conflicts of interest that exist is sound, but this was essentially an administrative issue. You like to talk about the DTCC, and this was that. The alternative could/would have been far worse for retail traders.
Posted on 6/13/21 at 12:55 pm to greygoose
And one last thing…
If retail owns 80% or the stock and, at best, 30% is short (even accounting for made up math/naked shorts), how does this work? How do all of the current retail shareholders sell their shares to far fewer buyers than there are sellers? There aren’t enough unhedged options, short sellers, etc out there for everyone to get out orderly. This is the elephant in the room that no one seems to want to address.
The entire thesis was blown up with the share count. You may be able to sell high, but the majority of you (retail) cannot do so without selling it to other retail. I’m genuinely impressed that no one seems to give a shite about that very inconvenient truth.
quote:
especially in case of a stock that is 80% owned by retail.
If retail owns 80% or the stock and, at best, 30% is short (even accounting for made up math/naked shorts), how does this work? How do all of the current retail shareholders sell their shares to far fewer buyers than there are sellers? There aren’t enough unhedged options, short sellers, etc out there for everyone to get out orderly. This is the elephant in the room that no one seems to want to address.
The entire thesis was blown up with the share count. You may be able to sell high, but the majority of you (retail) cannot do so without selling it to other retail. I’m genuinely impressed that no one seems to give a shite about that very inconvenient truth.
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