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Comment by yongjik | Hacker News Reader

Let me see if I understood it correctly:

(1) If you're buying GME today, there's good (~50%?) chance you'll lose most of your money in two weeks. (Of course there's also a decent chance that you'll make out like a bandit, but I'm not worried about that.)

(2) Moreover, if you're buying GME today, there's a very good chance that you're utterly convinced that you'll make a lot of money.

(3) So, in two weeks, with high probability, these people will flood Robinhood's customer support, and something tells me that they won't take "What do you mean? You made your trade entirely on your own, and nobody can guarantee future prices!" as an answer. (Supporting evidence: see today's talk of lawsuit.)

So, given all this, Robinhood is just limiting the amount of headache it'll face when the shit eventually hits the fan. Sound like good business decision to me.

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You seem to be making a lot of flawed assumptions here.

Even IF you are to assume this is a simply speculative "greater fool" scenario Robinhood just ensured through their interference that the last buyers are less likely to profit.

Robinhood's job is not to police transactions it is to process them. That they would do this for a few million $ in potential customer support time is so naïve.

Letting them off the hook for illegal manipulation because "it is a headache" is one of the stupidest arguments I have heard.

This is the "regular people are too dumb to play with the big-boy risk" approach to market access.

It seems classist and doesn't really line up with my concept of the free market.

Regular people are too dumb to play with big risk, including you and me. There's a reason why most countries have a very tight control of gambling places, and that's not because they're classists. When gambling is allowed, the whole society suffers, because there will be a few lucky winners and many who just lost their life savings, and they still have to eat (and their families have to eat) so someone's tax payment is going to pay for them.

I agree that it's a problem when "too big to fail" players get away with their shenanigans, but that's a separate problem, and you don't solve that problem by encouraging common folks to gamble away their wealth.

I've managed my fair share of big-boy risk. I personally believe myself to be qualified.

People should be permitted to buy publicly traded corporate assets. Your gambling analogy doesn't apply here. Robinhood saw fit to approve these people for brokerage accounts (and in many cases options trading). They were allowed to walk into the exchange so to speak, up until the point that they found a favorable position that they wanted to keep trading despite elevated volatility.

It's not the government's job to tell one class of people that they cannot participate in asset markets, while repeatedly bailing out a totally different class of people that blunders its role in the very same markets.

> So, in two weeks, with high probability, these people will flood Robinhood's customer support

Robin Hood is a brokerage. It is totally normal for them to have clients which (unwillingly or, in this case, willingly) have lost money - their customer support should handle this just fine. A lawsuit for allowing normal trading is going to be laughed out of court; this, on the other hand, will not be good for them, no matter how the lawsuit turns out. Not to mention that the SEC will take a nice long look at what happened here.

If customer support overhead would be their actual worry, they could've simply implemented a large checkbox saying "THIS STOCK IS HIGHLY VOLATILE. YOU _WILL_ MOST LIKELY LOOSE YOUR MONEY. Continue at your VERY OWN risk" and be done with it (you might argue this is still somewhat manipulation, but that could've easily been done in good faith).

It seems like a fair chuck of the WSB folks know they are possibly going to lose money here, but they don’t care as long as they can help screw the hedge funds.

https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_o...

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