striker42
Well-known member
It is. I'm thinking of getting into options but I'm going to have to do a ton of research first and then play around with money I don't care about losing for a while.
Economics Thread
- Thread starter sturg33
- Start date
It is. I'm thinking of getting into options but I'm going to have to do a ton of research first and then play around with money I don't care about losing for a while.
nsacpi
Expects Yuge Games
You learn a little about yourself when you do something like that. A journey of self-discovery!
striker42
Well-known member
I have to admit I'm a little intimidated by it. I don't know why. I passed the bar exam without issue and deal with complex legal issues all the time. I honestly think half of it's the vocabulary.
nsacpi
Expects Yuge Games
Some traders do better in certain markets and with a certain philosophy of trading. You have to figure out what works best for you. I kinda like a baseball analogy here. Some ballparks are better suited for a particular type of hitter. So figure out what kind of trader (hitter) you are and what kind of market (ballpark) suits you best. I've known very good traders who were the equivalent of singles hitters. They make a little money each day and are amazingly consistent. And I've known some very good home run hitters (and some of them do strike out a lot).
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nsacpi
Expects Yuge Games
At least three brokerages said the trading restrictions stemmed from mandates from their clearing firm, which process the securities on the back end after a user executes a trade with their brokerage. Webull Chief Executive Anthony Denier said his platform’s clearing firm, Apex Clearing Corp., notified him Thursday morning that Webull needed to shut off the ability to open new positions in certain stocks. Otherwise, Apex wouldn’t be able to settle the trades, he said.
“It’s a domino effect,” Mr. Denier said, adding the industry was likely reckoning with the question of whether “customers could pay for the stocks they had to buy to cover their short positions.”
“If [they] are not able to pay to cover their short positions, someone else is going to have to pay for that purchase,” he said. “And if their clearing firm fails and there’s not enough collateral in the account to cover the purchase, that trade fails and will cascade into multiple trades with multiple customers.”
Apex didn’t respond to a request for comment.
Webull later reopened trading in the three stocks it restricted: GameStop, AMC and Koss. Robinhood also said it would allow limited purchases starting Friday of the at least 13 stocks it restricted. The company said its initial decision to curtail trading in the stocks was based on its capital obligations and clearinghouse deposits, which fluctuate based on volatility in the markets. It added the decision wasn’t made on the direction of any market maker to which it routes orders, noting it was a “risk-management decision.”
Mr. Denier at Webull said the restrictions originated Thursday morning when the Depository Trust & Clearing Corp. instructed his clearing firm, Apex, that it was increasing the collateral it needed to put up to help settle the trades for stocks like GameStop. In turn, Apex told Webull to restrict the ability to open new positions in order to prevent trades from failing, Mr. Denier said.
DTCC, which operates the clearinghouses for U.S. stock and bond trades, is a key part of the plumbing of financial markets. Usually drawing little notice, it facilitates the movement of stocks and bonds among buyers and sellers and provides data and analytics services.
In a statement, DTCC said the volatility in stocks like GameStop and AMC has “generated substantial risk exposures at firms that clear these trades” at its clearinghouse for stock trades. Those risks were especially pronounced for firms whose clients were ”predominantly on one side of the market,” a reference to brokers whose customers were heavily betting for stocks to rise or fall, rather than having a mix of positions.
The statement added that when volatility increases, it increases margin that DTCC collects from the banks and brokers that use its clearing services. “Margin requirements protect the entire industry against defaults and systemic risk in volatile markets,” it said.
Other brokerages including Ally Financial Inc. and Public Holdings Inc., which runs social investing network Public.com, also said Apex Clearing halted all opening transactions on GameStop, AMC and Koss.
“While we cannot speak to the specifics behind Apex’s decision, these types of restrictions are typically put in place due to increased volatility, when securities transactions introduce systemic risk to trading platforms, customers, and the market at-large,” a spokeswoman for Ally said.
Ultimately, trading in all three stocks was restored on Ally and Public.com as well.
Retail trading platforms, including Robinhood in particular, have been facing increased scrutiny from regulators. Massachusetts securities regulators filed a complaint against the company in December alleging it aggressively markets to inexperienced investors and failed to implement controls to protect them.
https://www.wsj.com/articles/online...frenetic-trading-11611849934?mod=hp_lead_pos1
“It’s a domino effect,” Mr. Denier said, adding the industry was likely reckoning with the question of whether “customers could pay for the stocks they had to buy to cover their short positions.”
“If [they] are not able to pay to cover their short positions, someone else is going to have to pay for that purchase,” he said. “And if their clearing firm fails and there’s not enough collateral in the account to cover the purchase, that trade fails and will cascade into multiple trades with multiple customers.”
Apex didn’t respond to a request for comment.
Webull later reopened trading in the three stocks it restricted: GameStop, AMC and Koss. Robinhood also said it would allow limited purchases starting Friday of the at least 13 stocks it restricted. The company said its initial decision to curtail trading in the stocks was based on its capital obligations and clearinghouse deposits, which fluctuate based on volatility in the markets. It added the decision wasn’t made on the direction of any market maker to which it routes orders, noting it was a “risk-management decision.”
Mr. Denier at Webull said the restrictions originated Thursday morning when the Depository Trust & Clearing Corp. instructed his clearing firm, Apex, that it was increasing the collateral it needed to put up to help settle the trades for stocks like GameStop. In turn, Apex told Webull to restrict the ability to open new positions in order to prevent trades from failing, Mr. Denier said.
DTCC, which operates the clearinghouses for U.S. stock and bond trades, is a key part of the plumbing of financial markets. Usually drawing little notice, it facilitates the movement of stocks and bonds among buyers and sellers and provides data and analytics services.
In a statement, DTCC said the volatility in stocks like GameStop and AMC has “generated substantial risk exposures at firms that clear these trades” at its clearinghouse for stock trades. Those risks were especially pronounced for firms whose clients were ”predominantly on one side of the market,” a reference to brokers whose customers were heavily betting for stocks to rise or fall, rather than having a mix of positions.
The statement added that when volatility increases, it increases margin that DTCC collects from the banks and brokers that use its clearing services. “Margin requirements protect the entire industry against defaults and systemic risk in volatile markets,” it said.
Other brokerages including Ally Financial Inc. and Public Holdings Inc., which runs social investing network Public.com, also said Apex Clearing halted all opening transactions on GameStop, AMC and Koss.
“While we cannot speak to the specifics behind Apex’s decision, these types of restrictions are typically put in place due to increased volatility, when securities transactions introduce systemic risk to trading platforms, customers, and the market at-large,” a spokeswoman for Ally said.
Ultimately, trading in all three stocks was restored on Ally and Public.com as well.
Retail trading platforms, including Robinhood in particular, have been facing increased scrutiny from regulators. Massachusetts securities regulators filed a complaint against the company in December alleging it aggressively markets to inexperienced investors and failed to implement controls to protect them.
https://www.wsj.com/articles/online...frenetic-trading-11611849934?mod=hp_lead_pos1
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striker42
Well-known member
The next generation of batteries should be something to behold. I just hope our power grid is ramping up for the extra strain.
sturg33
I
Nuclear nuclear nuclear
striker42
Well-known member
I read an article about batteries powered by diamonds made from nuclear waste. Crazy stuff.
sturg33
I
Yes because a bunch of people breaking no laws and peacefully organizing and making money is the same as storming the Capitol and killing people.
Nsacpi mad that the old rich people getting it handed to them by the young people. Need more cops! More regulations!
Tyrants gonna tyrant
Nsacpi mad that the old rich people getting it handed to them by the young people. Need more cops! More regulations!
Tyrants gonna tyrant
nsacpi
Expects Yuge Games
Different manifestations of a flash mob. No need to misconstrue other people's words. What's the matter with you?
https://www.youtube.com/watch?v=idP5-vtkhBE
https://www.youtube.com/watch?v=idP5-vtkhBE
sturg33
I
After claiming we need more cops to stop this in the future, she said the situation was "not unlike what happened on Jan 6"
You predictably stated "she's not wrong"
My bad for construing your words precisely as they were said
nsacpi
Expects Yuge Games
Robinhood Markets Inc. raised more than $1 billion from its existing investors, an infusion meant to help the company meet rising demands on its cash stemming from frenzied trading in GameStop Corp. GME -6.17% and other hot stocks.
Robinhood and other brokerages in recent days have experienced a surge in trading volume in a small number of stocks, prompting the clearinghouses that help process and settle trades to ask them for more cash to cover the transactions. To help manage those demands, Robinhood raised fresh equity late Thursday, the company said Friday. It also tapped its credit lines with banks.
Because of a lag between when investors book new positions in a stock and when their cash is actually exchanged for securities, brokerages like Robinhood have to maintain deposit accounts at the clearing firms that help finalize trades. Clearing firms, such as the Depository Trust & Clearing Corp., require brokerages to post more of their own money in riskier times to insure against losses.
Robinhood’s swelling popularity—it was ranked as the top free app in Apple Inc.’s app store on Wednesday, according to App Annie—combined with the trading boom to prompt an unprecedented increase in Robinhood’s deposit requirements, Chief Executive Vlad Tenev said in an interview late Thursday. Robinhood restricted investors’ ability to purchase shares in GameStop and 12 other companies on Thursday to try to limit future increases in those requirements.
https://www.wsj.com/articles/robinh...ing-cash-demands-11611928504?mod=hp_lead_pos2
Robinhood and other brokerages in recent days have experienced a surge in trading volume in a small number of stocks, prompting the clearinghouses that help process and settle trades to ask them for more cash to cover the transactions. To help manage those demands, Robinhood raised fresh equity late Thursday, the company said Friday. It also tapped its credit lines with banks.
Because of a lag between when investors book new positions in a stock and when their cash is actually exchanged for securities, brokerages like Robinhood have to maintain deposit accounts at the clearing firms that help finalize trades. Clearing firms, such as the Depository Trust & Clearing Corp., require brokerages to post more of their own money in riskier times to insure against losses.
Robinhood’s swelling popularity—it was ranked as the top free app in Apple Inc.’s app store on Wednesday, according to App Annie—combined with the trading boom to prompt an unprecedented increase in Robinhood’s deposit requirements, Chief Executive Vlad Tenev said in an interview late Thursday. Robinhood restricted investors’ ability to purchase shares in GameStop and 12 other companies on Thursday to try to limit future increases in those requirements.
https://www.wsj.com/articles/robinh...ing-cash-demands-11611928504?mod=hp_lead_pos2
nsacpi
Expects Yuge Games
She made an analogy that I think is apt. When you make an analogy it is not to say the two situations are identical. She noted that in some ways the two situations are "much different."
analogy
[əˈnaləjē]
NOUN
a comparison between two things, typically for the purpose of explanation or clarification.
"an analogy between the workings of nature and those of human societies" · [more]
a correspondence or partial similarity.
"the syndrome is called deep dysgraphia because of its analogy to deep dyslexia"
synonyms:
link · relationship · relation · relatedness · interrelation · interrelatedness · interconnection · interdependence · association · attachment · bond · tie · tie-in · correspondence · parallel · bearing · relevance
a thing which is comparable to something else in significant respects.
"works of art were seen as an analogy for works of nature"
logic
a process of arguing from similarity in known respects to similarity in other respects.
synonyms:
similarity · parallel · parallelism · correspondence · likeness · resemblance ·