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I reckon Robinhood's trying to keep themselves differentiated in a broker market where all the big players decided to also drop commissions. I think they're the only ones with commission free options trading still, but I'll take paying commissions over my brokerage shuttering because they go bankrupt calculating margin wrong (or because the SEC shutters them because they were calculating margin wrong) and having to chase my account balance through SIPC through months on end.
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Nov 6, 2019 16:02
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By the time you've read the 5th RH story from WSB (now with > 4M of shadow margin created out of thin air) and realized that there could be two, ten or a hundred times as many people playing this game with other wagers and NOT posting about it, if you have even a single red cent in a RH account you'd better get that poo poo out to a reputable brokerage YESTERDAY.
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Nov 6, 2019 16:36
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Why does that sub casually throw around the words "retard" and "autist" like it's a hilarious sub for a wannabe investor?
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Nov 6, 2019 16:52
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cage-free egghead posted:Why does that sub casually throw around the words "retard" and "autist" like it's a hilarious sub for a wannabe investor?
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Nov 6, 2019 16:55
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It's basically /biz/ but with a ban on talking about crypto
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Nov 6, 2019 16:56
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As a person who doesn't know poo poo about stock trading or margins besides "index funds good", can someone tell me if these people with their $1mil+ in RH balances from gaming this bug actually have the ability to cash this out...? Edit: ok I found an article that explains it a bit more clearly https://www.bloomberg.com/news/articles/2019-11-05/robinhood-has-a-glitch-that-gives-traders-infinite-leverage
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Nov 6, 2019 17:32
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Sirotan posted:As a person who doesn't know poo poo about stock trading or margins besides "index funds good", can someone tell me if these people with their $1mil+ in RH balances from gaming this bug actually have the ability to cash this out...? (it's extremely unlikely any of them will walk away with cash)
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Nov 6, 2019 17:34
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It'd be funny if RH confiscated any earnings from the leverage gambles and called it a TOS violation. (But who am I kidding, most of these people are going to gently caress it up hard and bet on green.)
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Nov 6, 2019 17:54
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The only position I've seen go positive was someone who played long-AMD straight with 1.7M of leverage and made like 75k on a 4.5% uptick in the underlying security. I don't know what he's going to do, or if he had the good sense to cash this out, but yeah I would imagine they'd seize the funds as being in violation of their ToS.
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Nov 6, 2019 18:12
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I am sure the RH organization is calling every lawyer they can find to decide what to do to limit their exposure to the SEC
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Nov 6, 2019 18:19
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It's been like a week. At this point the fact the haven't fixed it must mean that either they can't or they won't.
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Nov 6, 2019 18:35
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They attempted a hot fix this morning, disabling buying/selling deep ITM calls. The fact that this is what they're attempting means almost certainly the way margin is calculated is deeply integrated into the platform and would take the whole ship down if they tried to fix it.
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Nov 6, 2019 18:40
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Other than the SEC violations what's happening to the money that doesn't exist that was being used to secure these positions in the first place? WSB is a pretty popular sub on Reddit, there could be an insane amount of this happening. I guess the individuals are on the hook, but these are largely poorish 20 something's so it's not like they are gonna pay it.
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Nov 6, 2019 18:48
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wilderthanmild posted:Other than the SEC violations what's happening to the money that doesn't exist that was being used to secure these positions in the first place? WSB is a pretty popular sub on Reddit, there could be an insane amount of this happening. I guess the individuals are on the hook, but these are largely poorish 20 something's so it's not like they are gonna pay it.
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Nov 6, 2019 18:49
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We're either going to see an absolute cherry bomb of financial reporting about the amount of shadow leverage these traders generated or, more likely, RH is going to pay all of this out of the VC lewt they're rolling in and bury the story so their imminent IPO goes off without a hitch.
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Nov 6, 2019 18:55
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EAT FASTER!!!!!! posted:We're either going to see an absolute cherry bomb of financial reporting about the amount of shadow leverage these traders generated or, more likely, RH is going to pay all of this out of the VC lewt they're rolling in and bury the story so their imminent IPO goes off without a hitch. There was a Bloomberg article on this yesterday. Complete with a screenshot of a wsb redditor doing the glitch.
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Nov 6, 2019 19:01
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Fhqwhgads posted:There was a Bloomberg article on this yesterday. Complete with a screenshot of a wsb redditor doing the glitch. Yeah but it's not one or even 5 people who've done this - I bet it's upwards of 50 and the Bloomberg piece was exceedingly short on details (and schadenfreude) for the trading platform who I'm sure scrambled to kill as much of the content as possible.
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Nov 6, 2019 19:04
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wilderthanmild posted:Other than the SEC violations what's happening to the money that doesn't exist that was being used to secure these positions in the first place? WSB is a pretty popular sub on Reddit, there could be an insane amount of this happening. I guess the individuals are on the hook, but these are largely poorish 20 something's so it's not like they are gonna pay it. The money definitely exists, it's just Robinhood's money that they're stupidly lending to their users. In theory RH can go after the individuals in question for any negative balances that result but in practice they're probably on the hook for all of that. They may try to unwind some of the trades if it gets bad enough but I have no idea how they'd go about doing that.
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Nov 6, 2019 19:04
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EAT FASTER!!!!!! posted:RH is going to pay all of this out of the VC lewt they're rolling in and bury the story so their imminent IPO goes off without a hitch. The fedora wearing Reddit version of Robin Hood, stealing from the rich to give to the stupid
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Nov 6, 2019 19:46
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What's that saying? If you owe robinhood 50K, that's your problem. If 1000 redditors owe robinhood a million dollars, that's robinhood's problem
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Nov 6, 2019 20:01
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BMan posted:What's that saying? If you owe robinhood 50K, that's your problem. If 1000 redditors owe robinhood a million dollars, that's robinhood's problem All I'm taking from this is that we should all sign up and make $$$.
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Nov 6, 2019 20:15
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They've disabled the underlying "trick" by not allowing you to trade deeply ITM options (hence the best and fastest way to turbocharge your leverage is gone) and any play that makes sense (i.e. a long timeframe hold) will get absolutely destroyed by the theta decay on your leverage are some words people said on the internet so I'm not going to do it.
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Nov 6, 2019 20:24
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Given everything else RH has hosed up, has anyone tried depositing a negative amount of money into their trading account just on the off-chance it works? 
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Nov 6, 2019 20:32
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Theta decay on leverage? Uuuuugh.
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Nov 6, 2019 20:59
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I'm just assuming theta decay refers to the angle of the downward red line on the graph of a RH user's net worth since I'm learning trig right now. No one can tell me otherwise 
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Nov 6, 2019 21:06
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BMan posted:What's that saying? If you owe robinhood 50K, that's your problem. If 1000 redditors owe robinhood a million dollars, that's robinhood's problem probably gonna need to stick another zero on it tbh
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Nov 6, 2019 21:15
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Sundae posted:Given everything else RH has hosed up, has anyone tried depositing a negative amount of money into their trading account just on the off-chance it works? If you successfully deposited -$1, you could end up owning all the money in the entire world.
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Nov 6, 2019 21:15
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Shut up Meg posted:If you successfully deposited -$1, you could end up owning all the money in the entire world. My bank account is LITERALLY OVERFLOWING. 
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Nov 6, 2019 21:39
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Sundae posted:My bank account is LITERALLY OVERFLOWING. 
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Nov 6, 2019 22:51
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https://twitter.com/zebulgar/status/1192198379859636225?s=21 BWVC
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Nov 6, 2019 23:37
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This slide is some extremely advanced naked grift
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Nov 6, 2019 23:43
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EAT FASTER!!!!!! posted:They've disabled the underlying "trick" by not allowing you to trade deeply ITM options (hence the best and fastest way to turbocharge your leverage is gone) and any play that makes sense (i.e. a long timeframe hold) will get absolutely destroyed by the theta decay on your leverage are some words people said on the internet so I'm not going to do it. Can we counter this with chroniton radiation and a tachyon beam, mister Spock?
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Nov 6, 2019 23:55
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EAT FASTER!!!!!! posted:theta decay on your leverage are some words people said on the internet so I'm not going to do it. theta decay is describing that as an option gets closer to its expiration, it is worth less. If you consider two option contracts for 100 shares of SPY at 307, one that expires on 15 Nov is worth less than one that expires on 20 Dec. The extrinsic value of a contract (everything that isn't however far in the money it is) trends toward 0, reaching 0 at expiration. For the stupid covered call leverage that the WSB clown was doing, he was selling calls so collecting premium now for the liability in the future of selling at the strike. Theta would have made the calls he sold worth less, so he could buy them back for a profit later, but SEC Regulation T still makes the whole plan a bad idea. For what people are talking about it's probably a synthetic stock (Buy a call and sell a put), where you do get absurd leverage and a profit/loss mirroring owning stock, but the call you bought loses value with every day that you hold it. Basically he dumb, and you shouldn't play with margin, and if you do play with margin, you should drat well understand all the ways that you'll get burned... which leads back to don't play with margin.
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Nov 7, 2019 00:43
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Asleep Style posted:This slide is some extremely advanced naked grift I'm really hoping the PDF that guy uploaded is real.   
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Nov 7, 2019 01:02
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I knew a guy in undergrad who ended up working for the vampire squid in their 1000x leverage desk. He put it as their desk for if institutions want to yolo Wonder what's he thinking now. Gonna email him
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Nov 7, 2019 01:21
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Re: softbank silliness, how about this slide deck about their 30 year vision. It's really something. PDF warning https://cdn.group.softbank/en/corp/set/data/irinfo/presentations/vod/2010/pdf/press_20100625_01.pdf
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Nov 7, 2019 01:27
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cage-free egghead posted:Why does that sub casually throw around the words "retard" and "autist" like it's a hilarious sub for a wannabe investor? I mean, the description is "4chan + Bloomberg Terminal" It's edgy, you autist
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Nov 7, 2019 01:44
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Guinness posted:Re: softbank silliness, how about this slide deck about their 30 year vision. It's really something. um excuse me but I think you mis-labeled this. Clearly the slides indicate that this is their 300 year vision. Way to live in the past. Enjoy all your despair while I'm over here being touched by seeing.
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Nov 7, 2019 01:47
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As a comment on the thread said: EBITNAH.
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Nov 7, 2019 01:51
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Guinness posted:Re: softbank silliness, how about this slide deck about their 30 year vision. It's really something. Pro click for sure
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Nov 7, 2019 01:53
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