Nottingham Forest Is Infested With Hedges

 

My favorite Robin Hood film is still the classic film featuring Errol Flynn. Although I don’t remember seeing the scene depicting Robin selling information to the Sheriff of Nottingham.

One of the allegations being made in the GameStop stock run-up is that those running the Robinhood app were selling members’ trading information to the big traders.

Now there’s been a lot of howling from the hedge fund professionals. I find it amusing that those that have two yachts are now worried about the little traders. What is not so amusing is the question of how much leverage was used to stop the trading of Game Stop stock.

I know that Joe Biden is busy in the Oval Office signing stacks of Executive Orders. President Biden is busier than a payday loan officer signing loan approvals in a strip mall. The big boys on Wall Street contributed a lot of money to the Biden campaign so we’ll have to wait and see if there will be an investigation into the stop trade orders of Game Stop.

The little investor will find that the big traders will try to keep them in the forest, and they run the risk of a collusion investigation of using Reddit to stop the short-selling of Game Stop stock. Something that Hedge fund short-sellers do appearing on CNBC, Fox Business News, and on any number of internet media platforms.

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  1. Ekosj Member
    Ekosj
    @Ekosj

    Doug Watt: One of the allegations being made in the Game Stop stock run-up is that the those running the Robin Hood app were selling members trading information to the big traders.

    I’m not sure that’s entirely accurate.    
    Robinhood doesn’t charge commission on trades.    So how do they make money?  They charge for ‘premium’ services.  They earn interest on customer’s cash balances.   I’d imagine that unless customers opt out, they lend out their customer’s securities ( which supports those who short-sell .., that’s where they get the shares to sell ).  But the biggest revenue source … they sell the execution of their customer’s trades.   Believe it or not, the big trading shops will pay to get orders to execute.  It’s called “payment for order flow” – PFOF.  

    Payment for order flow (PFOF) is the practice of wholesale market makers paying brokers (typically retail brokers) for their clients’ order flow. By acquiring order flow in this way, market makers are able to trade profitably against client orders (on average) while clients may benefit from reduced trading costs because the commissions retail brokers charge may be subsidized by the payments they receive from wholesale market makers.

     
    Robinhood is private, so there isn’t a ton of  financial info detail.   But it seems that their largest revenue stream is from PFOF.   And maybe I have it wrong, but I thought I read that their largest PFOF source was also some shop with a big short position in GameStop. (?)

    • #1
  2. Ekosj Member
    Ekosj
    @Ekosj

    Doug Watt: Something that Hedge fund short sellers do appearing on CNBC, Fox Business News, and on any number of internet media platforms. 

    Why is it only a problem when short-sellers do this?   Isn’t it just as bad when folks who are long go on CNBC and talk up a stock they own?   “Its going to the moon, Alice!!!”   Isn’t that just as egregious attempt to manipulate a market?

    And don’t we believe in free speech?   You lose your 1st Amendment rights if you are short a stock?

    • #2
  3. Percival Thatcher
    Percival
    @Percival

    Doug Watt: I know that Joe Biden is busy in the Oval office. He is signing stacks of Executive Orders. President Biden is busier than a pay day loan officer signing loan approvals in a strip mall. The big boys on Wall Street contributed a lot of money to the Biden campaign so we’ll have to wait and see if there will be an investigation into the stop trade orders of Game Stop.

    Furthermore, he’s got to get all those signed before his staff decides it’s time for his afternoon nap and calls a lid on the day.

    • #3
  4. Percival Thatcher
    Percival
    @Percival

    Ekosj (View Comment):
    Robinhood is private, so there isn’t a ton of financial info detail. But it seems that their largest revenue stream is from PFOF. And maybe I have it wrong, but I thought I read that their largest PFOF source was also some shop with a big short position in GameStop. (?)

    There has already been a question as to whether or not our brand-spanking-new Treasury Secretary Janet Yellen should recuse herself from advising the President in light of her having accepted $800K from Citadel, the company that rode to Robinhood’s rescue. Team Biden has already responded: “Take a look at her record on enforcement – this is not someone who pulls punches when it comes to bad actors or bad behavior. You can expect she will bring the same high ethical standards and tough enforcement philosophy to Treasury,”

    Well, that’s a relief. Because Ms Yellen has raked in $7 million from various financial institutions since she left the Fed. Because the sources were so widespread across the industry, there can be no question as to her objectivity, equitability, and unbiased discernment.

    I’m more concerned about poor Jen Psaki. What with all the circling back she’s promised to do already, any more would mean that there is an increasing danger she might screw herself right into the ground.

    • #4
  5. Percival Thatcher
    Percival
    @Percival

    What was the previous record on the quickest time from inauguration until the first pay-for-play scandal?

    • #5
  6. TBA Coolidge
    TBA
    @RobtGilsdorf

    Percival (View Comment):

    There has already been a question as to whether or not our brand-spanking-new Treasury Secretary Janet Yellen should recuse herself from advising the President in light of her having accepted $800K from Citadel, the company that rode to Robinhood’s rescue. Team Biden has already responded: “Take a look at her record on enforcement – this is not someone who pulls punches when it comes to bad actors or bad behavior. You can expect she will bring the same high ethical standards and tough enforcement philosophy to Treasury,”

    I don’t know that a person should have to recuse from advising, generally speaking. OTOH, Biden doesn’t strike me as someone who would have more than one adviser on a given subject. 

    • #6
  7. DrewInEastHillAutonomousZone Member
    DrewInEastHillAutonomousZone
    @DrewInWisconsin

    Percival (View Comment):
    I’m more concerned about poor Jen Psaki. What with all the circling back she’s promised to do already, any more would mean that there is an increasing danger she might screw herself right into the ground.

    Well, also her brother is a portfolio manager at Citadel LLC — one of the hedge funds getting smashed in this GameStop thing.

    • #7
  8. EJHill Podcaster
    EJHill
    @EJHill

    Fail Robin Hood GIF by Looney Tunes - Find & Share on GIPHY

    • #8
  9. Mark Camp Member
    Mark Camp
    @MarkCamp

    Percival (View Comment):
    I’m more concerned about poor Jen Psaki. What with all the circling back she’s promised to do already, any more would mean that there is an increasing danger she might screw herself right into the ground.

    Now, that’s funny.

    • #9
  10. TBA Coolidge
    TBA
    @RobtGilsdorf

    DrewInEastHillAutonomousZone (View Comment):

    Percival (View Comment):
    I’m more concerned about poor Jen Psaki. What with all the circling back she’s promised to do already, any more would mean that there is an increasing danger she might screw herself right into the ground.

    Well, also her brother is a portfolio manager at Citadel LLC — one of the hedge funds getting smashed in this GameStop thing.

    That could not be patheticker. 

    • #10
  11. Vance Richards Inactive
    Vance Richards
    @VanceRichards

    And if you want to complain, make sure you’re complaining to the right people 

    • #11
  12. Percival Thatcher
    Percival
    @Percival

    DrewInEastHillAutonomousZone (View Comment):

    Percival (View Comment):
    I’m more concerned about poor Jen Psaki. What with all the circling back she’s promised to do already, any more would mean that there is an increasing danger she might screw herself right into the ground.

    Well, also her brother is a portfolio manager at Citadel LLC — one of the hedge funds getting smashed in this GameStop thing.

    You don’t say. What a small world it is.

    • #12
  13. Douglas Pratt Coolidge
    Douglas Pratt
    @DouglasPratt

    I was going to make a “Men in Tights” reference but my caffeine ran out.

    • #13
  14. Percival Thatcher
    Percival
    @Percival

    TBA (View Comment):

    DrewInEastHillAutonomousZone (View Comment):

    Percival (View Comment):
    I’m more concerned about poor Jen Psaki. What with all the circling back she’s promised to do already, any more would mean that there is an increasing danger she might screw herself right into the ground.

    Well, also her brother is a portfolio manager at Citadel LLC — one of the hedge funds getting smashed in this GameStop thing.

    That could not be patheticker.

    TBA, it isn’t even two weeks yet! The clown show is only getting started.

    • #14
  15. HankRhody Freelance Philosopher Contributor
    HankRhody Freelance Philosopher
    @HankRhody

    Sherwood Forest. Nottingham is the town.

    That said,

    Doug Watt: One of the allegations being made in the Game Stop stock run-up is that the those running the Robin Hood app were selling members trading information to the big traders.

    This should be visible in the app’s Terms of Service. No, it never occured to me that this was a thing. But now that it is I wouldn’t be surprised if the, ah, small investors headed for the hills. It’s the only appropriate response when you find you’re patronizing a clip joint.

    • #15
  16. Doug Watt Member
    Doug Watt
    @DougWatt

    Allegations aside I find this a very interesting story. It appears that Facebook and Reddit shut down the chat threads from these small investors. I also find it interesting that Robinhood shut down trades in Game Stop, unless you want to sell shares in Game Stop.

     

    • #16
  17. HankRhody Freelance Philosopher Contributor
    HankRhody Freelance Philosopher
    @HankRhody

    Doug Watt (View Comment):
    I also find it interesting that Robinhood shut down trades in Game Stop, unless you want to sell shares in Game Stop.

    I find that interesting too. How do you have a trade without a buyer and a seller? If you can’t buy, then how can anyone sell? If you have sellers, then who is your buyer, and why?

    • #17
  18. Doug Watt Member
    Doug Watt
    @DougWatt

    HankRhody Freelance Philosopher (View Comment):

    Sherwood Forest. Nottingham is the town.

    That said,

    Doug Watt: One of the allegations being made in the Game Stop stock run-up is that the those running the Robin Hood app were selling members trading information to the big traders.

    This should be visible in the app’s Terms of Service. No, it never occured to me that this was a thing. But now that it is I wouldn’t be surprised if the, ah, small investors headed for the hills. It’s the only appropriate response when you find you’re patronizing a clip joint.

    My personal preference is Nottingham Forest, taken from the football club, established in 1865. Notts Forest, or simply Forest helped Arsenal enter league football, and Arsenal still features red in their colors as a nod to Forest.

    • #18
  19. Rōnin Coolidge
    Rōnin
    @Ronin

    DrewInEastHillAutonomousZone (View Comment):

    Percival (View Comment):
    I’m more concerned about poor Jen Psaki. What with all the circling back she’s promised to do already, any more would mean that there is an increasing danger she might screw herself right into the ground.

    Well, also her brother is a portfolio manager at Citadel LLC — one of the hedge funds getting smashed in this GameStop thing.

    The picture in the lower right hand corner says it all.

    • #19
  20. HankRhody Freelance Philosopher Contributor
    HankRhody Freelance Philosopher
    @HankRhody

    Doug Watt (View Comment):
    My personal preference is Nottingham Forest, taken from the football club, established in 1865. Notts Forest, or simply Forest helped Arsenal enter league football, and Arsenal still features red in their colors as a nod to Forest.

    Well, I’m certainly not going to argue with an Arsenal fan.

    • #20
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