Nothing to see here...move along now...https://twitter.com/primalpoly/status/1355221887559868422?s=20
Nothing to see here...move along now...https://twitter.com/primalpoly/status/1355221887559868422?s=20 If there was something to see it would be seen in the Tug in order not to disturb the old dodgers in their stuffed leather chairs smoking cigars and drinking brandy
You are what you eat...https://www.bloomberg.com/news/articles/2021-01-25/citadel-point72-to-invest-275-billion-in-melvin-capital
AG seems to be the next shorted stock? Threw away some money on that as the market opened this morning. It was a peyote filled vision.Down about a hundie at day end. Dead even on SLV. Just remember, Paper ain’t Silver!
AG seems to be the next shorted stock? Threw away some money on that as the market opened this morning. It was a peyote filled vision.Down about a hundie at day end. Dead even on SLV.
AG seems to be the next shorted stock?
You are what you eat...https://www.bloomberg.com/news/articles/2021-01-25/citadel-point72-to-invest-275-billion-in-melvin-capital Which proves they weren’t caught short because if they were they would have been worried about their own skin and not able to add risk by bailing out others.I wonder what kind of terms they got for that bailout...seems like they likely made out like bandits in this situation. Especially as they benefit when Robinhood volume increases as they take a lot of the order flow.
You are what you eat...https://www.bloomberg.com/news/articles/2021-01-25/citadel-point72-to-invest-275-billion-in-melvin-capital Which proves they weren’t caught short because if they were they would have been worried about their own skin and not able to add risk by bailing out others.I wonder what kind of terms they got for that bailout...seems like they likely made out like bandits in this situation. Especially as they benefit when Robinhood volume increases as they take a lot of the order flow. They added risk by buying into the firm that was short and underwater...magically the market shenanigans happened soon after. I'm sure they made out like bandits because they probably exited most of the position Thursday morning when they were tanking the stock. They are free to open their books up and show everyone they weren't, but that will never happen.Bought some more PINS...assuming Melvin was the ones heavy selling it earlier this week.
You are what you eat...https://www.bloomberg.com/news/articles/2021-01-25/citadel-point72-to-invest-275-billion-in-melvin-capital Which proves they weren’t caught short because if they were they would have been worried about their own skin and not able to add risk by bailing out others.I wonder what kind of terms they got for that bailout...seems like they likely made out like bandits in this situation. Especially as they benefit when Robinhood volume increases as they take a lot of the order flow. They added risk by buying into the firm that was short and underwater...magically the market shenanigans happened soon after. I'm sure they made out like bandits because they probably exited most of the position Thursday morning when they were tanking the stock. They are free to open their books up and show everyone they weren't, but that will never happen.Bought some more PINS...assuming Melvin was the ones heavy selling it earlier this week. A loan is not a position. I am sure that Citadel, being sophisticated market participants, secured adequate collateral rather than putting themselves needlessly in the difficult position of having to rely on potentially illegal actions to manipulate a random small cap stock in order to ensure payback of a loan they made well after the short squeeze became obvious.Your better argument is they needed Melvin not to blow up because Melvin is long a lot of the same stocks as Citadel. But for that all they needed was for Melvin to cover not for the squeeze to fail.
You are what you eat...https://www.bloomberg.com/news/articles/2021-01-25/citadel-point72-to-invest-275-billion-in-melvin-capital Which proves they weren’t caught short because if they were they would have been worried about their own skin and not able to add risk by bailing out others.I wonder what kind of terms they got for that bailout...seems like they likely made out like bandits in this situation. Especially as they benefit when Robinhood volume increases as they take a lot of the order flow. They added risk by buying into the firm that was short and underwater...magically the market shenanigans happened soon after. I'm sure they made out like bandits because they probably exited most of the position Thursday morning when they were tanking the stock. They are free to open their books up and show everyone they weren't, but that will never happen.Bought some more PINS...assuming Melvin was the ones heavy selling it earlier this week. A loan is not a position. I am sure that Citadel, being sophisticated market participants, secured adequate collateral rather than putting themselves needlessly in the difficult position of having to rely on potentially illegal actions to manipulate a random small cap stock in order to ensure payback of a loan they made well after the short squeeze became obvious.Your better argument is they needed Melvin not to blow up because Melvin is long a lot of the same stocks as Citadel. But for that all they needed was for Melvin to cover not for the squeeze to fail. Wasn't there a corollary saying from Trump way back when...owe the bank a little money its a loan. Owe the bank a shit-ton of money and you become an owner? (Not quite the same but similar concept). Not sure what Melvin would be able to pay Citadel back with if they go underwater on the GME short and had to liquidate all of their holdings to help cover...shorting a stock at $10 that then trades at $350 gets expensive real quick. Add too that Citadel's investment in Robinhood and the fact they were likely not liquid...Only thing I'm sure of with Wall Street is that rules are like road markings to the banks and hedge funds...they are a nice guide but they won't keep their car in the lane if they need to swerve to miss something.
No skin in the game? How you figure that?You realize Robinhood is in deep, deep trouble...wonder how their investors/backers are holding up.https://www.zerohedge.com/markets/robinhood-caps-maximum-holdings-36-stocks-just-one-shareOne day after the company drew down on its bank lines and obtain a $1 billion rescue capital investment, the company found itself in lockdown mode, allowing just a handful of shares to be traded at a time, effectively shutting down in all but name (it couldn't risk another day of furious public outcry and massive client departures).However, just before the close, things got downright surreal when in a blog post the broker - which should probably change its name from Robinhood to Suit - made a shocking announcement: going forward, customers will be subject to maximum aggregate limits in 50 securities of which 14 are capped at position limits of just 5 shares, while allowing total holdings in 36 securities to be just one share!
No skin in the game? How you figure that?You realize Robinhood is in deep, deep trouble...wonder how their investors/backers are holding up.https://www.zerohedge.com/markets/robinhood-caps-maximum-holdings-36-stocks-just-one-shareOne day after the company drew down on its bank lines and obtain a $1 billion rescue capital investment, the company found itself in lockdown mode, allowing just a handful of shares to be traded at a time, effectively shutting down in all but name (it couldn't risk another day of furious public outcry and massive client departures).However, just before the close, things got downright surreal when in a blog post the broker - which should probably change its name from Robinhood to Suit - made a shocking announcement: going forward, customers will be subject to maximum aggregate limits in 50 securities of which 14 are capped at position limits of just 5 shares, while allowing total holdings in 36 securities to be just one share! You are once again misunderstanding the relationships between the different involved players. Its almost like you came up with your conclusion first and then went looking for evidence instead of the reverse.Citadel didn't participate in any of Robinhood's 19 funding rounds. They are not an investor in Robinhood.Citadel is a customer of Robinhood. They buy a large chunk of Robinhood's order flow.This gamestop frenzy caused a liquidity issue for Robinhood because they have to post collateral to cover the time period in which their customer's trades settle (t+two business days) and they can't use customer funds to do so.This is usually not a problem since a brokerage is able to net out the buys/sells of any given security to calculate the risk and hence the collateral needed.But reportedly 56% of Robinhood's customers were long GME (and probably a negligible amount short or selling.) Robinhood was forced to post a rapidly increasing amount of collateral with the clearing broker hence the liquidity issue.It is the opposite of a normal liquidity issue stemming from business deteriorating. Instead it was the result of a massive boom in business.Citadel also benefited from that boom in business but was not subject to the regulatory requirements that Robinhood was.
No skin in the game? How you figure that?You realize Robinhood is in deep, deep trouble...wonder how their investors/backers are holding up.https://www.zerohedge.com/markets/robinhood-caps-maximum-holdings-36-stocks-just-one-shareOne day after the company drew down on its bank lines and obtain a $1 billion rescue capital investment, the company found itself in lockdown mode, allowing just a handful of shares to be traded at a time, effectively shutting down in all but name (it couldn't risk another day of furious public outcry and massive client departures).However, just before the close, things got downright surreal when in a blog post the broker - which should probably change its name from Robinhood to Suit - made a shocking announcement: going forward, customers will be subject to maximum aggregate limits in 50 securities of which 14 are capped at position limits of just 5 shares, while allowing total holdings in 36 securities to be just one share! You are once again misunderstanding the relationships between the different involved players. Its almost like you came up with your conclusion first and then went looking for evidence instead of the reverse.Citadel didn't participate in any of Robinhood's 19 funding rounds. They are not an investor in Robinhood.Citadel is a customer of Robinhood. They buy a large chunk of Robinhood's order flow.This gamestop frenzy caused a liquidity issue for Robinhood because they have to post collateral to cover the time period in which their customer's trades settle (t+two business days) and they can't use customer funds to do so.This is usually not a problem since a brokerage is able to net out the buys/sells of any given security to calculate the risk and hence the collateral needed.But reportedly 56% of Robinhood's customers were long GME (and probably a negligible amount short or selling.) Robinhood was forced to post a rapidly increasing amount of collateral with the clearing broker hence the liquidity issue.It is the opposite of a normal liquidity issue stemming from business deteriorating. Instead it was the result of a massive boom in business.Citadel also benefited from that boom in business but was not subject to the regulatory requirements that Robinhood was. This sounds correct to me.I'm going to get baked later and read this thread again to see if I still agree.
I don't even understand this thread but it's fun nodding my head in agreement with most of the posts.
Hey @FremontTroll...question for you. I’m anything but an options guy.A bunch of wildly out of the money GME call options are now in the money...let’s say as an example 1 $300 call option (100 shares) in the money with GME closing at $350. A bunch of RH investors hold it though time because they probably don’t know what to do, which means they now have to put up funds to buy the shares ($30,000).They have, what 2 business days to fund it? Who is responsible for the $30,000 between now and then, especially assuming RH doesn’t have the funds?Now say the next day GME crashes to $50 and RH reddit guy says FU...I’m not paying you $30,000 for 100 shares that are now worth $5,000...try and get your money. Who’s left holding the $30,000 bag on a stock that is now worth a bunch less, especially if RH is already broke.I’m assuming the Clearinghouse (ie Citadel being the primary one), but I don’t know for sure.
My question though is if the broker has no collateral (ie where RH is now), their business model doesn’t require it for their clients (ie RH again...average account size is only a couple thousand), and I’m guessing the liquidity of those options dry up because the main people still buying/selling them are all on the same platform facing the same issues.Somebody holds the bag in the above case...who does that end up being?
The real risk to Robinhood is just a good old fashioned run on the bank. Everyone pulling their money out now.
The real risk to Robinhood is just a good old fashioned run on the bank. Everyone pulling their money out now. https://twitter.com/fxhedgers/status/1355343072129761281?s=21https://twitter.com/rt7683/status/1355344307214036994?s=21https://twitter.com/fxhedgers/status/1355337691726970882?s=21
I’m not trying to be a dick...options are not my thing and only know a bit of how they work. I’m assuming you mean on the hook to these guys since they route most of their trades?Citadel Clearing LLChttps://www.bloomberg.com/profile/company/1314823D:USMy point is if the above is true Citadel is in bed with RH whether they like it or not. Citadel was very lawyerly in their response...they said they didn’t tell them to shut trading down. My point is they didn’t have too...all they had to do was just show them a model if trading continued how much Robinhood would have to pony up to them for different GME price scenarios knowing Robinhood didn’t have a chance in hell of having that money, and also knowing they were completely effed if they were stuck holding the bag trying to sue thousands of small-time RH account holders to try and recover their money on something that is going back to $10/share in a month if not sooner.
