southsider2k5

Margin is a loan. It is a revenue stream. Firms aren't charging comissions anymore, so they look to things like this for the bottom line.

So take a case like this. Say someone puts $10,000 down, and gets 50% margin on it, so technically they can go to $15k in exposure. They load up on short options in a stock like GME. GME goes from $15 to $300. Those 100 calls that they were selling for 25 cents, or $25 a contract (.25X100 share per contract x100 contracts), are now worth $200 in intrinsic value alone, without adding a penny of volatility or time cost to them. 100 contracts sold makes the user $2500, and leaves the user 6:1 in terms of risk before he even goes on margin call. Again, those $2500 in contracts, now are worth $2,000,000 in JUST intrinsic value ($200.00 X100 share per contract x100 contracts). Add vol and time costs to those, and you are probably talking a $50 per contact price, or $5000 per option. In other words you now are owing someone $2.5 million ($250.00 X100 share per contract x100 contracts), having collected $2500. Your broker has direct access to your $10,000. Sure they can sue, but do you think these people have a space couple of million laying around? Now your introducing broker has to come up with that money. if they can't do it, now the clearing broker has to. If the clearing firm can't, that is when you get a Bear Stearns or EDF Man situation, they blow up and go away. It's an extreme example, but it makes the point of why these restrictions happen.

The dude made it rich off of sexist and racist banter. Now he is putting on a show about something he CLEARLY doesn't understand to win some points. He is way more worried about his stock account than any damage he did to people along the way. No I am not going to be impressed by this.

Throwing other people's money at things doesn't change who you are.

For the record, this is a conversation between two shitbags, but one of them knows what they are talking about.

I think 2 and 3 are 100% true for sure. I think there is no doubt that if COVID doesn't happen, the Sox spent A LOT more this year. It hasn't gotten talked about enough. We have a history that shows the Sox add dollars when they are good, and this is the first time it isn't really proving true, and there is a very big elephant in the room currently. Yes, I wanted them to spend this winter, but it isn't surprising that they didn't. It is also pretty obvious that with Pritzker and Lightfoot leading Illinois and Chicago, they won't be opening up attendance early, and even when they do, it won't be a high percentage until it is more clearly safe. #1 I doubt, because as long as JR has owned this team, he knows what happens to the bottom line when this team is bad. #4, who knows.

I can get with it. I mean options pricing is a University of Chicago Nobel laureate formula (Black Schoals), of which volatility is a huge component. If the market place reevaluates what the odds and possibilities of vol are, and finds they need to be higher, the price of options everywhere will go up. That will server as a deterrent to anyone wanting to trade these, as now they need to risk more capital to engage in their strategies.

That also makes sense. None of these new overnight shops are clearing their trades. They aren't the custodians, so they aren't taking those ultimate risks if something blows up. Trust me when I saw that the SEC isn't just looking at the trades, they are looking at the health of the custodians, and if Robinhood is causing problems for their clearing firm, their clearing firm is going to shut the problem down. So essentially what is happening in my eyes is the clearing firms are probably increasing margins on RH, who is then realizing they can't be profitable or pass the costs on to the traders, so instead they are just shutting things down.

It isn't something used everyday. Typically ordinary rules are enough, such as normal margin requirements and short sale rules. But in a spot where are seeing actual coordination, it isn't a normal time.

The brokerage is also on the hook if John Q Reddit goes belly up and can't pay his losses because he doesn't understand what he is doing, so putting 100% cash restrictions on these underliers is absolutely warranted and it is something with history behind this. I happened in 08-09, it happened in 01, and it will happen again.

I am not sure why anyone would be surprised. I spent the end of the 2020 season and the early 21 off season telling anyone who would listen that the Sox weren't going to spend.

Now THIS would be a time for the GOP to complain about freedom of speech...

Chicago CAN do that, we saw it in the middle 2000's when they were good.

Even as a minority team in the 3rd biggest market in the country, there is still more growth potential than somewhere like Nashville or Portland.

Outside of Hendriks replacing Colome, Tony LaRussa really was the biggest move of the off season. It is amazing that this town should belong to the Sox and they found a way to piss away all of that good will like Mitch Trubisky throwing into the end zone.

I am going to bet he gets charged.

One more thing I want to throw out there for the masses. A bunch of hedge funds deciding to do the same trades at the same time because of the same fundamentals is not illegal or market manipulation. A bunch of people getting together to coordinate the same action in the same stock at the same time IS market manipulation and is illegal. It is the coordination and communications to organize that coordination which are the key's here. People can argue about if it is right or wrong, but that is the way the rules are written as they stand today. From the POV of an exchange or market maker, there is actually grounds for trading halts, and even more so than that, SEC investigations for market manipulations.

100% the SEC would let them fail.

Honestly most of the market movement today was a response to the battle over GME and co, both in stocks and BTC. Once it settles out, there is plenty of momentum to be had from the same forces being freed up. The markets will soak up the lions share of that investment money.

BTC was down over 10% today, about 30% from its highs now. Last I heard they wanted a retest of 40k to hold that level but they never got it.

Exchanges have pretty broad leave to institute halts and slow downs such as fast market conditions in situations that aren't normal market conditions, especially if illegal trading is suspected. For the sake of this, I am going to guess that there is a Chinese Wall between the two entities of Citadel here, which means from a technical and legal standpoint the same entities aren't doing these activities. You pretty much have to have your company divided up this way to prevent regulatory nightmares.