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Comment by ppod | Hacker News Reader

The article does not really answer the question in the title. Yes, it shows why they still had the ability to execute Sells. But the question most people have is: If you are forced to halt Buys, isn't it fairest to also halt Sells?

Now, I can see the counterargument: if you halt Sells, you are effectively preventing people from withdrawing their money from Robinhood. But, by allowing Sells (which are being bought by another party somewhere) you likely to influence the price, and you're putting your customers in a strange position relative to clients of other institutions who can still buy, and indeed, buy from Robinhood customers. I still haven't seen this question properly addressed. What are the precedents? When forced to restrict trading because of regulatory obligations in the past, has the normal response been to halt all trading or only one side?

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Be careful what you wish for! Levine noted Friday that a huge amount of the trading done in GME was institutional. Large firms can probably handle whatever collateral requirements there will ever be for a specific symbol. Here you have a bunch of random people pushing a $15 stock up to $400. Volatility makes it impossible for Robinhood to keep transacting in that stock. They shut down buys and sells. But trading on GME continues elsewhere; in fact, most GME trading has been occurring elsewhere. Now: the market crashes (as it inevitably must). You got in at $250, cheered as it beat $320, and now the stock is heading back to double digits...

> stock is heading back to double digits

You think

I sure do.

Down to 185 in after hours trading (6:16 EST). From a 225 close at end of US trading hours.

Every conversation I get into about this stuff with normal people, I conclude by asking: "have you seen a GameStop?"

The whole thesis here is just so transparently stupid. I know that's true of cryptocurrency stuff that has stayed in the money for a long time. But I mean, really. GameStop is going to zero.

It's not just that every downloads their games now; it's that the whole turnaround pitch ("we'll be the Apple Stores of gaming") ignores the bargain-basement commercial real estate GameStop occupies.

This is actual intersting debate. When the exchange itself halts, they (necessarily, mathematically) halt buts and sells. But there's no correct answer possible for just one brokerage.

So now we go meta and ask "should it be legal to be a brokerage without a much larger cash cushion than current rules? Or should clients be warned about the possibility of freezes like this? Or should buyers take responsibility and not put their money in discount low-quality brokerages if they want to day-trade run hedge-fund style manipulation plays?

All in all, if you hate sleazy hedge funds, you should have any sympathy for day traders and squeezers either, as as they intentionally are playing the same no-holds-barred game, not doing investing as the market system intends.

If you want to hold Melvin accountable by law for alleged misdeeds, it's silly to say the law should require brokers to aid in market manipulation activities against their own solvency interests, instead of the law should require (and enforce) that Melvin do whatever they are doing wrong.

From understanding the issue is that RH didn't have enough collateral to execute buys. If they restricted sell on RH in the name of symmetry, but other broker with no collateral issue would still allow buy and sell the stock would remain volatile. In this case, not being able to buy is a nuisance, but won't make you loose money directly. Not being able to cash out in the event of a steep decline on the other is directly and highly prejudicial.

I understand that restricting buys affect the price for those who already bought in, but at least they can still cash out..

https://mobile.reuters.com/article/amp/idUKKCN2253T2 https://mobile.reuters.com/article/amp/idUSKBN1FT2S4

i'm not an expert in any of this, but I've heard/read multiple people comment that there is no situation where you're legally allowed to halt sells short of the SEC or market (NYSE/Nasdaq, etc) saying so

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