Also, considering 99.9% of people jumping on the bandwagon have absolutely no idea what they're doing, they'll probably thank RH down the road for preventing them from losing all their money.
And to add to that, a company (Citadel) that pays Robinhood a large amount of money for their data is one of those with the short positions. So Robinhood itself has a stake in this.
Disclaimer: I have no idea what I am talking about and this is only my opinion.
That’s quite a claim. Got a source on that?
https://www.equities.com/news/robinhood-is-said-to-get-40-re...
https://twitter.com/justinkan/status/1354853920762253315
I'm no market expert, but I know that when cash is flowing between two companies, they generally have shared interests.
I'm on a cash account because I like to avoid their "pattern day trader" protection.
Edit: And I just found out my platform (Binck) doesn't accept trades anymore.
Edit: Apparently they do accept trades, but only if your limit is close to the current price. I was increasing mine because it wasn't executing at the lower price. Eventually I did get in at the lower price. We'll see where this goes.
But it's definitely risky. You could lose a lot of money. Many of the people buying are also doing it to stick it to the hedge funds and give them a taste of their own medicine.
Can you be more specific? Robinhood & Webull are the only two that I'm aware of.
blocking purchases of shares from accounts that have enough to cover the contract: highly sketchy and worthy of deep scrutiny
some broker did 1, some did 2, but form screenshots alone is hard to tell which did which
Likely because it has the most impacted users. I suspect other platforms will get lawsuits as well in time if this one proceeds.
That's my understanding. What happens afterwards? No ideas. Some people want to see hedge funds burn, I would not mind that either.
Nobody is going to make the hedge funds burn. At this point the hedge funds are fleecing whoever was buying shares or options yesterday (who do you think they bought them from?).
Imagine there are only two shares GME.
You buy two GME for $1ea. Two short sellers needs 1 GME each lest they hemorrhage money on fees. You loudly announce your plan to hold half your GME forever. The short sellers trip over each other to pay you stupid money for the one GME you are selling. You then sit on the other GME for awhile, maybe sell it in a year or two for a buck. In any case despite buying two and selling one you've made a ton of profit.
Now scale this up to several million people.
And many more shares, most of them hold by corporate and institutions (some of those institutions will be happy to lend shares as well). Also more shares can be issued.
There's so much discussion on HackerNews today about people who are going to lose out on these stocks where I've seen a healthy amount of comments on Reddit in the last week of people buying stock merely "for the lulz". I think there's a non-insignificant amount of "investors" who have tossed paltry sums at $GME with no plans on making a return.
Honestly, I'd have done the same, but I don't do any form of stock trading so I don't have accounts on any platforms to do it. I've done the same with various crypto shitcoins and made a few bucks off throwing $50 or $100 at something I don't expect to ever see return on too.
if the stock price is higher when they borrow and sell, and lower when they buy and return, they make a profit equal to the difference. they lose money if the stock price goes up. all these people buying GME and driving the price up will hold GME stock, and the shirt sellers will be forced to purchase back the stock at premium prices. even if the stock price goes down slightly, the people buying up all the GME will still profit.
but more importantly a lot of people's goal is to f over a major firm that constantly over leverages itself.