It bugged me tho' that the interviewers didn't ask the crucial question - Why should the brokers and the clearing houses avoid the responsibilities of the position they occupy?
They knew the rules. They knew they were exposed in this way when they took on the job. In fact, it is a crucial part of their job.
-----------------------------

I could understand a firm deciding to not allow margin trading of GME - especially in options. That is done quite regularly at the individual level and occasionally its extended across a firm for a specific commodity or stock.

But to tell people that have cash in their accounts that they cannot buy a publicly traded stock is simply bogus.

As for the stated reason about "concern" for counterparties being able to settle - that comes down to liquidity. And each of these brokers has CHOSEN the market makers that they use for their order flows. So to now say - Hey we are concerned - is a bit of a stretch. Not to mention that IB claims to be overcapitalized and have $9 BILLION in cash for operations.

The real kicker is that Robinhood is partially owned by a hedge fund, Citadel. They are one of the funds that bailed out the hedge fund Melvin Capital - who needed a 2.75 BILLION cash injection to cover its GME losses (they were short). SUPPOSEDLY they had covered their position on Tuesday - but that's just based on their public statement. AND Robinhood routes all their orders to Citadel's market making operation. Again, this is supposedly a "separate" entity from the Citadel Hedge Fund - with "chinese walls" between the two..... and if you want to believe that I have a bridge to sell you!

And the potential crime that has taken place is that Robinhood and IB and likely other brokers literally liquidated thousands of GME positions yesterday. They did this by changing margin requirements on GME (even though they weren't allowing anyone to buy!), and not giving anyone the ability to meet the margin requirements - they just liquidated. This is how there were share available to either short or buy yesterday - even though the volume was way down.

There are documented reports of people's ENTIRE GME holdings being sold - amazingly enough the couple I've seen with my own two eyes were near the lows of the day yesterday. They didn't just sell enough shares to meet the new margin requirements - they sold the entire holding saying they were selling due to blah blah blah market conditions blah blah blah risk.... thanks Robinhood. You can easily see these trade notifications online. If it were me I'd be contacting one of the slimy Wall Street Lawyer firms that specialize in this stuff. There has to be a class action lawsuit here.

MustardBlu wrote: ↑Fri Jan 29, 2021 7:33 pm When all the shorts cover then the price has to come crashing down don't it?

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Well, yes and no. I believe its likely that the share price will drop dramatically once the short interest is something more reasonable. But that could also take a while depending on exactly when the option contracts become due and how much pain short sellers can tolerate in the hopes of settling when/if the price declines.

You can remain "short" a stock forever in theory. But you have to pay interest on the borrowed shares. And the higher the stock price the more interest you have to pay. Also, there are margin requirements and the higher the share price goes the more capital you must put up as the counterparty if you wish to remain short - eventually you can't and your holdings are liquidated to meet margin requirements.

Beyond that, yes - its likely GME shares are going to go from $500 or $300 or $150 down to $20 or $30 where this all began. BUT - some said the same thing about TESLA. That it was really a $20 stock and retail investors were propping it up and after time they would lose all their money...... well, the guys that were shorting in 2016 when the stock was $80 lost their shirts (if they were lucky) and the retail investors made a small fortune.

So while I'd agree that GME isn't likely to remain at $500 when short positions are down to a more reasonable level, there is nothing that says it has to go back to $20 or $30 - after all this all got kicked off with some good news from the business and a confluence of events came together to create this storm.

The censorship of WallStreetBets needs to be a watershed moment for everyone

This type of speech has existed in online communities since the advent of online communities. But all of sudden, the day after a hedge fund loses $3bn, big tech takes a stand? Are you joking?

Censorship has now crossed the chasm
. . . It's not about safety, or social justice, or political activism, whatever the justification was before.
It's being used by people in control to keep the control.

Robber Hoods have put a 5 day delay on cryptos, and ameritrade has restricted 11 stocks.
GME Ticker is worth watching at the moment.
Probable suspension if it takes a trend north.
The reddit orcs are trying to drum up a squeeze on silver.
They obviously don't know how much grannies dinner service is sitting in attics.
They be like- we will gut the hedges then move on to silver.
They think themselves some kinda biblical locusts.
Millenials vs boomers!

Ha haa! - thanks Nemo, you just took us back to Repeating History.

Does any else remember Nelson Hunter Bunk? and his two equally stinkingly oil rich brothers?
The Big Silver Corner of '79

Background
Nelson Bunker Hunt, Lamar Hunt, and William Herbert Hunt, the sons of Texas oil billionaire Haroldson Lafayette Hunt, Jr., had for some time been attempting to corner the market in silver. In 1979, the price for silver (based on the London Fix) jumped from $6.08 per troy ounce ($0.195/g) on January 1, 1979, to a record high of $49.45 per troy ounce ($1.590/g) on January 18, 1980, an increase of 713%. The brothers were estimated to hold one third of the entire world supply of silver (other than that held by governments). The situation for other prospective purchasers of silver was so dire that on March 26, 1980, the jeweller Tiffany's took out a full page ad in The New York Times, condemning the Hunt Brothers and stating "We think it is unconscionable for anyone to hoard several billion, yes billion, dollars' worth of silver and thus drive the price up so high that others must pay artificially high prices for articles made of silver".[1]

On January 7, 1980, in response to the Hunts' accumulation, the exchange rules regarding leverage were changed; COMEX adopted "Silver Rule 7", which placed heavy restrictions on the purchase of commodities on margin. The Hunt brothers had borrowed heavily to finance their purchases, and, as the price began to fall again, dropping over 50% in just four days, they were unable to meet their obligations, causing panic in the markets.

from Wiki ^^. The full story >>
https://en.wikipedia.org/wiki/Silver_Thursday

Yep, Truff ^^ that's what monopolies do, and near-monopolies. Bastards.
We pay x10 and make them unimaginably stinking rich - purely through market power.
Plunder, is the perfect word.

But that's a bit different. DeBeers main aim was to stabilise a steadily increasing, overvalued price. And control the whole show.
And they pulled it off - they kept control (largely) of the pricing dynamic even when they were overtaken in production by "outsiders". Like, forever.

So yeah, it is monopoly/cartel stuff.
But nobody ever cornered, shorted or squeeze-shorted DeBeers as far as i know.
And they wanted longterm stability and reliability of diamonds value - so they never went pirate themselves.

Their big disrupteur may be improvements in diamond manufacturing, so lookout for a good short there - one day.

Well, another interesting and frankly disappointing day.

Enough public exposure and pressure and Robinhood and some other brokerages re-open trading on GME and other stocks.......

Until GME hit $363 at about 12pm. Then Robinhood institutes a 2 share limit per account. That's right - TWO shares (and if you already own more than two shares you cannot buy anything. About an hour and a half later the price was at $325. Well, lets try restricting it to ONE share. Because you know there is only 2 hours before option settlement!

This was obviously a sham - making it appear the "little guy" had been allowed back in, but obviously not the case. Other brokers did similar.

The price went down to $265 before rebounding into the close (those last hedge fund holdouts had some expiring options they had to meet). What is interesting is that short interest is still over 100%. Interesting article on CNBC (i'll try to put the link below) which confirms almost all short covering occurred on Thursday - when retail investors saw 1000's of position liquidated due to changed margin requirements at the same time buying prohibited. Outright theft.

I've read that the first class action lawsuits are indeed being organized.

At this point its obvious the fix is in - at least in regard to GME short positions. While its not public information, eventually we'll find out which large hedge fund or funds are still holding their short positions and working behind the scenes to extract themselves from the situation. I've already seen a couple interviews with officials saying things like "we are concerned for the markets" blah blah blah "speculation" blah blah blah "protecting consumers" blah blah blah. So I wouldn't be entirely surprised if by Monday or Tuesday of next week we don't see the FED or Treasury step in with either emergency actions or new short term regulations to try to unwind the situation. It will be a travesty - but hey, if you can allow bankers to blow up your financial system and not go to jail what's 20 or 30 or 50 billion theft to keep your hedge fund buddies solvent.

Had the actions of Thursday and Friday not taken place in regards to liquidating people's positions and restricting trading - its not tough to envision a scenario where the share price might have cracked a $1000. Shows you the reach (financial and political) of these hedge funds.

Link. https://www.cnbc.com/2021/01/29/gamesto ... -year.html

Keep the commentary going TiddlyWinksYou, it's really good to hear the finer details and explanations.
Thanks.