This sounds both conspiratorial and totally plausible.
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Robinhood to me looks like poker from 2003-2005 or crypto when it spiked. So many fish.
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Let’s say I want to engage in some speculative investing. Let’s say I expect significant economic pain in certain sectors in certain states/locales that I think Wall Street is blissfully ignorant to. Are there any tools available to research publicly traded companies that have significant exposure to specific areas?
Like, say, restaurants in Arizona, bars in Texas, hotel companies in South Carolina, etc?
I feel like nothing publicly traded will let me drill down far enough to really make this play, but I also think there are likely regional chains that have more exposure in this situation. Short of going company by company, anyone have any research ideas?
Also, what else is likely to crash? What were the biggest losers of the first crash, and what were the biggest winners? I’ll be researching this over the weekend, but I feel like there may be no winners this time around. Like ZM is already up over 100% since 3/1, Kroger is up 15%, all the vaccine companies aren’t impacted. Did anything go up with the crash, then fall back down with the recovery, that will get pumped back up this time around?
Given the model I’m working on in the COVID-19 thread, the collective knowledge of UP, and the fact that we’ve been consistently ahead of the curve COVID-19 developments, it seems like we should be able to make some profitable options trades over the next month or so.
I claim zero stock expertise, but I \wonder if Costco is a good play. They went up in the first crash and then faced some volatility possibly associated with their mask policy. But it seems like there is room to rise again both as a second wave validates that policy and again drives increased demand for bulk goods.
“investing” is just gambling at this point IMO, if you have the disposable income for it go for it but an aggressive 401k putting in 19k a year is almost certainly a better bet I would think.
Blue Apron went up like 1000% in less than a week in March
Shorting DraftKings seems like a possible play if you think the pro sports leagues will have to shut down again.
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One thing to think about is pent-up demand. Covid is the best thing that ever happened to my gym owner, he’s gotten so many new signups. I’m sure manicurists and hair-stylists are swamped right now.
So even if we have to shut down for 2-3 months again, the crushing effect on a lot of business that have to shut down could be smoothed over somewhat by people going before and after the shutdown.
I agree with this, but like if Arizona and major metro areas in Texas have to shut down, the market is going to crush any retail/hospitality/live entertainment business that has a ton of exposure there. Might help that their tourism season isn’t over the summer, though, but I’m thinking that like a restaurant chain that has disproportionate exposure there is likely to lose 20-40% of its value in the immediate (over)reaction.
Generally I agree, but gambling can be +EV and then you just have to manage your bankroll. I don’t think any of this is a “lock” but I’m pretty confident that UP has a better grasp of when these shutdowns (whether mandatory or just people getting shook and staying home) are going to arrive than the market does.
Like, you have to answer three questions here:
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Who’s done a better job predicting COVID-19 so far, Wall Street or Unstuck Politics?
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Is there any reason you expect that to change in the next month or two?
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Is COVID-19 running rampant in numerous states going to move the market?
I’m very confident the answers are UP, no, yes. If so, we should be able to profitably trade on this black swan event.
The other part is to some degree this has to be priced in. No one thinks restaurant stocks should be booming. But then again if you find one at an all time high… maybe there is something there.
Can someone ELI5 how this type of STONKS thing happens? How does someone get 700K in the hole with no collateral? What happens when Robinhood asks for the 700K and he can’t pay?
https://twitter.com/billbrewsterscg/status/1271802132979748866?s=21
That story sounds…not true. But if it is true and a 20 year old kid with no income ended up $700,000 in the hole it’s a shame that he killed himself because I think he could probably just tell Robinhood to fuck off. Worst case scenario is bankruptcy. I mean I guess worst case scenario is not understanding your options and killing yourself, but again this story seems made up.
edit: not saying the guy tweeting is making it up or that someone he knows didn’t kill himself. Just seems hard to believe that Robinhood exposes themselves to that sort of liability and is still in business.
https://twitter.com/BillBrewsterSCG/status/1271832856222990336
It would be pretty hard for this to happen, but not impossible. There are fairly strict FINRA rules regarding margin accounts with respect to how much capital you must maintain in the account. If you fall below the requirement, the firm will suspend your buying ability and send you a margin call (I think this always happens at the end of the day). If you don’t then send the money, they’ll liquidate your position and you owe the difference. So the only way to get $700k in the hole would be to do it in one go.
Brokers protect themselves against this by limiting your buying power based on net capital, so you can’t lose too much in a single day. That said, Robinhood has clearly had some problems with its buying power limits. In late 2019, people found a glitch that allowed you to have super high buying power with a small deposit.
So it’s possible he found a similar glitch and took a huge position and lost $700k in one day. The other possible way he could do it is if he was running hot, ran up to a big amount, bet it all plus all that he could borrow against his account and lost it all plus the $700k in one day.
Man if a 20 year old with no income could find the infinite margin glitch he could just make a huge flip and tell Robinhood to fuck off if he loses and collect if he wins, right?
That’s what I’m trying to figure out. Certainly seems like our financial system is a house of cards with no logic behind anything. Why can’t a legion of r/wallstreetbets kids find these exploits, make these huge plays and either PROFIT or tell Robinhood to go fuck themselves when they are all 6 figs stuck?
Uh bankruptcy is not a joke. RH almost certainly has a collections department that will see that through.
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The RH margin glitch has to involve some kind of fraud, right? I expect there has to be a criminal penalty for misrepresenting something. Cannot imagine a pure programming glitch causing that.
And if I was aware of such a glitch I would want my money as far away from that site as possible because someone will bankrupt them if they are this careless. It’d be like trusting the bitcoin exchanges in the early days
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If you’re a 20 year old with no assets, I can think of worse things than flipping a coin and either declaring bankruptcy or profiting 6-7 figs on money you don’t have.
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Like working for minimum wage your entire life with no healthcare or social safety net.
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