Comment by ritchiea | Hacker News Reader

Comment by ritchiea | Hacker News Reader

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I've been reading WSB since yesterday and while I understand the outrage about blocking trading. They started blocking trading with $GME trading in the $400's, and a slew of redditors on WSB, Discord & Telegram pushing penny stocks. It started out a crusade against the hedge fund shorting $GME and quickly turned into rallying dumb money to pump and dump penny stocks. Looking at the direction things were going it seems like Robinhood acted responsibly in cutting off the buys of AMC, BB, NOK, etc. They're all stocks that have been propped up artificially in the last 48 hours based on the hype and attention generated by the Gamestop story.

No one serious thinks Gamestop stock is worth $400+. Robinhood cut off buying at the point when unsophisticated investors were caught up in a stampede to "stick it to the man." Seems like they did the right thing.

> Robinhood acted responsibly

No. This is against the Free Market hypothesis. We are supposed to let the Dumb Money get into the market, fail out and learn their lesson.

Wall Street is/will be having a ball with the new administration desperate to keep the market "stable". Stable == deliberately and slowly bled by hedge funds.

What's the Free Market hypothesis?

"This is Wall-street Dr. Burry, if you offer us free money, we're going to take it"

Absolute nonsense. The exchange is protecting the trader from himself!!

The exchange is designed to make money selling and buying. There is no reason they would stop either unless some big wig made a phone call.

Robinhood doesn't make money on trades - they make money off of commisions paid to them by high frequency traders. Basically there's some time between when I place an order and when a stock actually gets purchased. In that time, the price may change a bit. High frequency traders can buy at slightly lower prices than I could, and can sell at slightly higher prices than I could, so they can profit the difference without me noticing. Some of this excess gets paid to robinhood as a sort of finders fee.

Over many stocks and long periods of time, this works quite well. However the system breaks down if everyone is trying to buy the same heavily manipulated stock.

Should Robinhood be an arbiter of what is a reasonable trade and what people can spend their money on? Because if so, they have a lot of restricting to do to keep people safe...

What about the people that are trying to double down to protect their long position? What about the money they will lose? Either the market is efficient or it isn't.

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