LogFAQs > #950064294

HeroDelTiempo17 posted...

It depends. If you are buying into WSB/reddit collectively organizing this on their own, then no. But as more details come out and it seems like more firms are involved, it seems unlikely to be that simple. But if the whole betting structure of shorting is what's causing this regardless of specific actors then maybe that has to go, or be tightly regulated or heavily taxed or something.

As an aside, was looking into the stuff about the sales stop yesterday and part of it was that one of the companies involved had leveraged ALL of its assets as collateral and had no more leverage to buy on behalf of users.



Stuff like this is just insane to me. Why is any of this allowed?

What are you saying shouldn't be allowed here?

You realistically need intermediaries to facilitate trades; without them, I couldn't just say "hey, I want to buy a stock of GME at the current price" and have that happen; there's likely going to be a mismatch between the number of people buying and selling. So what actually happens is that I buy from/sell to a market maker and they figure out the other end of things. But if everyone wants to buy rather than sell because this thing is blowing up like crazy, the market maker's gonna be forced to short the stock themselves and take on a ton of risk unless they stop letting people buy (I guess Robinhood is not a market maker themselves, but they execute trades on behalf of the market makers). Then if they take on so much risk that they literally can't cover it and things fall through, everything's fucked.

It is true that allowing selling but not buying manipulates the market and I can see an argument that if they shut down one they should shut down the other, but my suspicion is that people would also have been mad about that (probably madder?)

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Congrats to azuarc, GotD2 Guru champ!