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Comment by merkaloid | Hacker News Reader

He's probably not just any engineer because if you actually check the stream it looks like it is viral marketing for "robinhood.com"

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He totally is just some random guy. I know this, because I worked with him for a few years in Amazon Fulfillment. Just found out today that it was him that made this project (haven't talked to him in a while).

user: mabbo created: 1527 days ago karma: 6074

Active, long-standing account. If you're a sockpuppet you're a damned good one. :)

Out of curiosity, how significant is 50K to this guy?

Toy money, i guess. Its suprising who is a millionair and who isnt. In a car factory where my brother works, one of the workers, financing a house with his money and then houses with money from the house, became a millionaire without anyone in the above layer noticing. So if he gets chewed out by one of his fore-masters or executives, they are - not knowing- chewing out somebody who could quit any time.

All it takes is 10-20 years of saving 30+% of your income. Most people balk at that savings rate, but anything white collar pays enough to have that sort of savings if you are willing to life a more modest lifestyle than your socioeconomic peers.

10 years later the interest you earn on it will be more than the 30% you are putting in.

It helps if you have entertainment/activitys that are solitary, cheap and infinite.

Games, books, whatever occupy you without draining resources.

That was automatic for most people not so long ago, at the time house were bought on 10-20 years mortgages.

>10 years later the interest you earn on it will be more than the 30% you are putting in.

How?

5% interest, $1,000 monthly injections, compounded monthly over 10 years. $120k in deposits, $36k in interest.

This is probably it. I personally signed up for Robinhood based on this project. I'm already interested in stock trading though so it wasn't that big of a commitment from me but they do have a nice App and signup process compared to other financial trading outfits I've used.

Yeah, Robinhood is mentioned quite a bit on his site, including a sign up referral link. Seems like their referral program gives you $10 for each signup.

Also he says if it hits $25K, then the game is over. So it's only $25K at real risk, not $50K. (True, the stocks could fall further before he liquidates.)

Also: anyone have an idea as to what regulations he is citing when he says if it drops below 50% he has to close the account? Is that a Robinhood thing, or an equities trading thing? As far as I know, there is no regulation limiting how much a person can lose on the market...

Makes me wonder if perhaps his account balance is $25k personal, and $25k matched by Robinhood for the stunt.

He'll just cut the stream<->robinhood connection, there's nothing from robinhood on down that will save his $25k.

Actually, there kind of is. It will stop you from placing trades if you daytrade with less than that. Your account will be suspended.

https://support.robinhood.com/hc/en-us/articles/217072366-Pa...

Stopping you from trading on the account doesn't protect the value in the account (and makes it harder for you to take action that would protect it, too!)

Typically you're forbidden from increasing your equity loan on a margin call - closes are completely fine (So you can buy shorts, or sell longs, but the inverse is against the rules). I've never used robinhood, but I've been declared a PDT before.

I think you need $25k to be a day trader on Robinhood. So if it drops below that he can't trade the same way he would unless he adds more cash which I guess he isn't prepared to do.

That's not just Robinhood. I'm not aware of any brokerage that lets you trade on the major U.S. markets with less than $25k.

Huh? You can open a Fidelity account with $2500, and buy any stock you want including US and Int'l markets.

Yes, but you can't do that four or more times in a period of five business days if it accounts for over some percentage of your portfolio.

Day trading has a specific definition in this context (can't remember if it's SEC, FINRA, or some other acronym), and refers to the buying and selling of the same security with a single day. That $2.5k Fidelity account will go out of its way to tell you that you're not allowed to do that.

You can trade with less. You can't day trade, defined based on the number of trades in a certain period. Some brokerages may enforce additional limits, but I've personally traded on NASDAQ via US brokerage accounts with less in them than that, so you certainly can do it.

The $25k minimum only applies to day-trading accounts. See sibling comments for details.

The $50k is all mine. I was not given anything from Robinhood except for approximately $500 worth of free shares for referrals.

You can learn more of the $25k rule here: https://support.robinhood.com/hc/en-us/articles/217072366-Pa...

If I were Robinhoood, I'd try to be the facebook of financial startups- give every high school student a starting portfolio of fake stocks to manage through high school so they learn how to invest and manage money, then have avenues to have different "tabs" in their portfolio for real stocks they have gifted by family, and another for real ones they buy...

They can play with purchase what ifs in the stock sandbox, and plan and grow in the real tabs... among many many other things...

I did that with google finance about a decade ago and the financial crisis wiped me out. I wasn't even good at managing fake money.

Disclosure: I have started putting away some money in a vanguard Roth IRA now. I don't think about it too much because it is the minimum vtsax would let me invest anyways.

We were doing that in a high school course. Then 9/11 happened.

I suggested Delta.

A teammate asked his dad for a stock tip and invested the rest in a company none of us had ever heard of.

Delta popped back +25% or so over the next bit (from memory).

His company made some announcement and the stock doubled in value.

... I learned a lot about how the world works from that class.

In my middle school course when we played "the stock market game", I just picked a spread of reasonable stocks at the start. Every time we could rebalance our portfolio, I just read. I didn't care about the game. Got first or second in the class, and thus free pizza, for it. Kinda continuing that with in my current investment life; invest in index funds, walk away.

But is investing in stocks something you would want high school graduates to pick up?

I always thought of stock-picking as something that the average Joe should be careful with. Trading on less information than insiders and slowly being eaten by fees and taxes. It's an under EV game.

Besides that there's the wisdom of crowds that will eventually follow the trends and invest irrationally (pump and dump). That's how bubbles are created.

When I was in highschool, I was attempting to corner the market on commodities - specifically wheat!

Every day I would log in and manage my account - I was a commodities broker and I managed to build a pretty powerful little empire with my savvy transactions.

While not as powerful when it came to ore... my wheat holdings were no laughing matter... that was until the day I smoked pot, dialed in and accidentally sold all my wheat holdings as opposed to buying up all the other supply - thus eliminating my monopoly on the galactic wheat trade...

Man, Trade Wars was a blast in the early nineties.

That's an interesting story and I'm sure you learned a lot through the experience. I'm also sure there are plenty others like you, to whom trading was educative.

But on the other hand I'm sure there are a whole lot of young people on the other side of things. Those who start learning about stock-trading and soon see it as a way to make money fast by taking huge risks. They get spammed by 500$ signup bonuses to various stock-trading platforms, they're presented with 100x leveraged trading options and such. I don't see much benefit in that.

What I think is young people should be taught how the market works with a huge grain of salt. Definitely not by letting them go wild with play-money since we all know what will follow up.

Agreed, it's a fine line between investing and gambling, and much of it has to do with the length of time involved.

The Financial Industry Regulatory Authority (FINRA) in the U.S. established the "pattern day trader" rule, which states that if a stock trading customer makes four or more day trades (opening and closing a position within the same day) in a five-day period the customer is considered a day trader and must maintain a minimum $25,000 account balance.

https://www.finra.org/investors/day-trading-margin-requireme...

> the stocks could fall further before he liquidates that's what "stop-loss" trades are for :p

does robinhood not have that?

Robinhood has stop loss trades.

No, that is not what stop-loss orders are for. A stop-loss order only puts a sell offer into the market when the market prices falls below a certain threshold, there is no guarantee as to what price someone will actually buy your shares at, or that anyone will buy them at all.

If you want to have a hard limit on the loss, you'll have to buy a put option.

Even then you have counterparty risk.

Technically the put doesn't guarantee anything since not everyone is too big to fail but for most purposes this is true.

Not sure why this is being voted down. A counterparty in an option agreement can become insolvent. This is typically analyzed under the name counterparty risk.

Much much much less common than a stock going down, but when large counterparties become insolvent, a lot of people start needing to write off big chunks of their positions.

A stop loss with no limit means "if the price hits X, then sell my shares for as low as 0.01/0.001" (same as a market sell order). You can verify this by imagining a single trade below the stop loss, then the only buy order being at 0.01.

If you put a limit on the stop loss then there's no guarantee it'll clear, but at least you won't sell for some ridiculously low amount.

The exchange might have circuit breakers that won't let a particular symbol change more than X% in a given period of time.

For folks playing at home and wondering "What is Robinhood?"

From [1]

> Robinhood is a stock brokerage that allows customers to buy and sell U.S. listed stocks and ETFs with $0 commission. ... we are able to maintain a lean bottom-line and pass the savings along to you, the customer ... Robinhood is an SEC registered broker-dealer and member of FINRA & SIPC.

[1] https://support.robinhood.com/hc/en-us/articles/202844869-Ab...

Don't waste your money and time trading individual stocks. Invest for your future with dollar-cost-averaging and buying ALL the stocks (AKA a diversified index-tracking fund with very low fees (less than 0.1%/year)).

StockStream was launched independent of Robinhood. I really like their platform, so am glad to include links to their site.

$50k in RSUs annually is a decent target for a mid-level engineer (non-management). With overlap of grants after the first year and price appreciation of the stock, you can imagine how this can grow.

That said, I think Amazon has some unfriendly vesting terms compared to the SFBA-based companies I'm more familiar with.

I think so too. When it first launched I signed up for robinhood and tossed just 100 bucks to see how it worked. App needs a lot of work to be useful so I doubt I'll throw any more money at it. On the plus side, I am up ~4%

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