I made this point yesterday and I am going to make it again. The hedge funds are covering their losses by selling off stocks that are not in play with the reddit crowd. If you want to see the fallout from this action, check the latest balance in your retirement account.

Exactly !

Just wait until one of the brokerages can't pay the clearing corporation. The domino theory will be proven at that point. Recipe for another federal bail out

Some think the government shouldn't regulate. If government can regulate this kind of activity it should for the benefit of all of us. I really don't know crap about this but why should this kind of activity be allowed to put all of us at risk?

Consequences for wrongdoing are seldom good.

Lot of the complaints are like the opening scene to Miller's Crossing. Id post it but it has some language.

I fully admit I don't know anything about hedge funds and what they do (that's why I asked); but...

it seems they are in a business where they simply CANNOT lose.

if I'm wrong, so be it.

but I'd like to see a few examples where a major hedge fund went out of business because of bad decisions.

Here ya go.

https://www.investopedia.com/articles/investing/101515/3-biggest-hedge-fund-scandals.asp

Those stories are legion.

thanks, white17...I'll give it a look.

appreciate it!

I am a little confused Hippie. What wrongdoing has the average buy and hold investor committed?

I'm not sure there is any wrong doing by anyone. I think that will take an investigation to determine. Some are certainly guilty of poor judgement

Robinhood is the one that really could get in a heap of trouble unless they corrected their actions of yesterday. It didn't take long for people to start talk of a class action suit against them.

Robinhood reinstated trading last night I think.

Wall Street complained to the White House and got them to shut Robin Hood down so the average American couldn’t buy. What’s not rigged in the system. You don’t see them complaining when the average American is losing everything. I think it was hilarious the average American figures out to stick it to the big guys.

Seems to me that's a long shot. What RH did was completely legal as far as I can tell. SEC sets minimum capital requirements and restrictions on brokers and thus on traders. There is nothing stopping a broker from setting stricter requirements than SEC mandates
' If RH had done nothing and people lots their shirts that same group would be suing them for not doing something to protect them.

If what you say made any sense, then the "White House" would have forced all brokers to shut down. But that didn't happen and only a few brokerages imposed restrictions. It was still possible to buy GME all day yesterday except for 4 or 5 brief trading halts.

There was several online trading places that was shutdown the day before yesterday.

I'm not talking about shutting the trading down. There are folks that had their GME stock sold by RH at the low price for the day, even after it was coming back up. They didn't authorize the sell. MY cousin had his sold off at $180. I haven't talked to him today to see if they had re-instated it, or what. I know late last night there was talk of a class action suit over it.

Got to say I disagree with you Ken. If this squeeze would have went the other way those hedge funds would have had no problem taking that money.

If a short squeeze in a (This word is unacceptable on Trapperman) ant company like gme can bring the whole market down the market is flawed and the answer isn't more regulation.

Free market capitalism is dead

If your cousin had his stock sold out from under him then only three things are possible.

1. He had placed a market order, rather than a limit order, when the stock was dropping............OR he had placed a sell stop below the market and it got triggered.

2. He had purchased the shares on margin and his account no longer had adequate maintenance margin to meet the SEC requirements. That could easily happen if the stock was dropping. In those situations ALL brokerages will liquidate positions in order to restore adequate equity to the account. It states it clearly in the account agreement.

As volatile as GME has been the past week it would be easy to have #2 above happen.

Volatility is the real problem here. Every stock has an Implied Volatility that changes constantly. BUT, most don't fluctuate as greatly as GME has been.

Example. Microsoft trades with a IV of between 29-30 most of the time. That means that the market expects Microsoft stock to move about 1.8 % per day. Gamestop is currently trading at an IV of just over 400.That means the market is expecting movement of 25% per day.

So you can see how it could lose a quarter of its value and thus his account no longer had adequate maintenance margin to continue holding the stock.

If neither of those is the case then there was an error and he should contest the trade.