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Comment by sillysaurusx | Hacker News Reader

I highly recommend https://youtu.be/4RS4JIEVyXM?t=60 -- I didn't understand any of this myself till watching that. (Still don't! But I'm less confused.)

My understanding is that the clearing firm informs everyone "Hey, we no longer support opening positions in three stocks specifically: GameStop, AMC, and KOSS."

Literally everyone, including Robinhood, was forced to only allow people to sell GME.

Somehow Fidelity was the only market maker to avoid this -- you couldn't buy GME anywhere else due to the clearinghouse's decision.

(Why was Fidelity the only broker able to sidestep the clearinghouse's decision? An interesting mystery; perhaps someone here knows the answer.)

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> Literally everyone, including Robinhood, was forced to only allow people to sell GME.

Not literally. I was able to buy w/Schwab when it was restricted by RH. I tested this specifically to see if I should change brokers.

There's more than one clearing firm in the market. The more money the clearing firm has, the more likely it'll be able to continue trading highly volatile stocks at high volume. Fidelity, as a huge financial firm that's been around for a while, had the assets to afford to keep trading it (and/or their customers weren't trading enough to put strain on them), robinhood (which has its own, small, clearing firm) couldn't, simple as that.

No, buying worked on many brokers.

This is not true, you could buy GME at almost every broker except a handful too thinly capitalized to support their volume of GME trades.

Fidelity is largest stock holder of GME.

So in the end it can be done when the right people make profit

Or rather because the trades could be done internally (Fidelity could sell off the stock they own)

EDIT: It seems my assumption was incorrect. This link posted by grandmczeb shows that RH needed more capital by a downstream dependency to ensure those trades: https://archive.is/GFtf2

Actually you were right, Fidelity did sell off all the stock they owned.

https://www.wsj.com/articles/fidelity-cashes-in-most-of-game...

https://www.bloomberg.com/news/newsletters/2021-02-11/why-ga...

They owned 13% of the company; now they own only 87 shares; they sold 9.3 million shares in 1 month.

So, during the Robinhood GME debacle, Fidelity could sidestep the issue, since they wanted to sell their own GME shares anyway, and also managed to look good in the process (no GME buying restrictions compared to Robinhood etc); win win for them

Fidelity is the largest shareholder in many stocks, it has a massive amount of client funds.

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