Hacker News Reader

Comment by fairity | Hacker News Reader

> They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system?

I can almost guarantee you that this decision was made to protect retail clients -- not as part of some conspiracy against them. It's very clear that retail is going to lose their shirts in the end of all of this, and by blocking new buy orders, the brokerage is effectively protecting its naive clientele.

Come back to your comment in a month, and I think your perspective will have shifted.

View on HN

I sincerely doubt that many retail investors expect to make money on this. I have a couple buddies who made robinhood after seeing this on the news just for the opportunity to make a hedgefund bleed. I was in the same boat, but I already had an account.

No matter how paternalistic the intent may have been on Robinhood's end, the message is all the same to us on the outside: the game only has rules when we get to win it

Guarantee as soon as the hedge fund guys are all safely out of their positions and stopped their losses, Robinhood and the other retail brokerages will suddenly be like "Well, we did a great job and protected retail clients! All done with that trade limiting business. Back to normal, everyone."

You don't think the shorts are getting a chance out of their positions here?

Slight miscommunication -- what's happening is they're preventing any new positions from being opened. You can close positions, whether short or long.

YOU can't buy, only sell. That means buying power of the Reddit mob was taken away.

The retail brokers bailed out the hedge funds!

You are right that a big part of retail will be left with enormous losses. But that doesn't in any way excuses brokers who manipulate price letting only SELL orders in

If they only allow sell orders, who is buying what is sold?

The hedge funds who are in trouble and need to exit their short positions?

It's not Robinhood's responsibility to protect retail clients. They are not financial advisers. By doing this they have violated their mandate. Why? Maybe it's for their clients, but when you consider their incentives, that seems at best suspiciously convenient, and at worst deliberate market manipulation to save their ass.

How is Robinhood in danger through all of this? My understanding is they make money by selling order flow. If anything, they're losing money by halting trades?

The story is that they're subservient to interests which are losing money from the GME shorts.

Reply on news.ycombinator.com