Stocks - The Best Buys 2

[Ashasx]

Originally Posted by Krovikan

Market buys are really risky, and the order systems may not (and probably don't, and you wouldn't want them to) have access to you account balance.

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If you make an order, can you specify that you want to buy $5,000 in shares, instead of a specific number of shares, and still have this happen?

[Patek23]

Originally Posted by Cecil Terwilliger

i posted above how Canadian brokerages could be exposed. I wonder if RH is the same.

Apologies in advance if I mess up any details but the general idea is 100% true or at least was when I worked in the industry up until about 2 years ago.


Lets say someone saw the hype at 8pm on Monday when GMC was $5/share. They posted a market purchase order that minute for $5k using all the cash in their account.

The next morning, due to after hours trading, the stock opens at $25/share. Instead of rejecting the trade or partially filling it, the canadian brokers will just overdraw your account, even if you do not have margin trading enabled.

So now that guy's purchase for 1000 shares at $5 each for a $5k purchase just turned into a $25000 purchase for those same 1000 shares. They always base your purchase on the shares requested, not the $$ in your acct.

His account is now at -$20000 and he's being charged 20% interest on the money. His online broker could have, I think, just rejected the trade or only partially filled it but they hold him to that contract and if he doesn't pay they will come after him and file a judgement/collection for the money.

Now imagine that happened to 500,000 people on the same platform who all didn't know how market prices worked when buying stock. The broker could be exposed for millions and millions in uncollectable losses.

easily solved by not allowing market orders. Only allowing you to reduce your position and not buy is market manipulation.

If I want to take my money and throw it all away thats my right. But thats not what this is all about. It's about allowing big money to recover their footing and let them all slip out the back door while the prices are being capped down. I do really hope this gets looked into. And I would imagine RobinHood will never recover from the PR from this. They are going to get taken to the woodshed.

[Krovikan]

Originally Posted by Ashasx

If you make an order, can you specify that you want to buy $5,000 in shares, instead of a specific number of shares, and still have this happen?

Not that I am aware of on Questrade but their are some advanced buy options I don't use.

Edit: Looks like something similar, stop order, buy at market with a high price per share.

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[DoubleF]

Originally Posted by PepsiFree

NOK especially and BB are interesting long plays, you're probably fine getting in now that they've dipped.

But yeah, nothing is going match GME in short-term trajectory.

To the poster who is mad about putting in on NOK because he lost a little bit... it's a day... give it time. Give it a year.

This isn't my first visit to NOK. I made a good investment in TMUS for more than a year that I cashed out. NOK I agree has interesting long play potential which is why I nabbed it. I'm going long on NOK. It's not the losses that are making me mad at myself, it's that I feel like I fell to hype and I'm gambling more on NOK than actually being diligent with my personal investment rules.

[Senator Clay Davis]

Well the wild ride is over for now, things have leveled off the past couple hours.

[Acey]

Originally Posted by Flaming Homer

Ted Cruz quoted an AOC tweet and replied "I fully agree".

What planet are we on?

The same old world, because AOC responded saying that Cruz tried to have her killed so she has no interest in working with him.

[Cecil Terwilliger]

Originally Posted by Ashasx

Can they really do this?

As a former bank employee who pushed online brokerages as part of sales targets, yes they can and no they DGAF if you bankrupt yourself due to ignorance. In fact they’re counting on it. You think they make any money on the $9.95 commissions? Ha!

It’s why I’m no longer in retail financial services. The whole industry is crooked.

[CroFlames]

Originally Posted by Ashasx

Can they really do this?

This literally happened to me, so yes it can. Nothing that dramatic.

My investment account with my bank was -1,800 because I bought shares afterhours thinking it couldn't possibly rise that fast.

I called the bank to see what I need to do, and they said you better cover that off within 24 hours, or they will automatically and arbitrarily sell stock within your account to cover it off.

I shudder to think if you didn't have the money and were -20,000.

[Cecil Terwilliger]

Originally Posted by Ashasx

If you make an order, can you specify that you want to buy $5,000 in shares, instead of a specific number of shares, and still have this happen?

Sort of. You set a limit price. So in the example I posted, if it showed $5 as the closing price, instead of placing a market order you’d place a limit order of $5 a share. That way your trade fails if the price goes above $5.

I’d bet 90% of users don’t know this and most online brokerages don’t exactly advertise this risk in their tutorials.

[ajr4013]

Originally Posted by Cecil Terwilliger

I’d bet 90% of users don’t know this and most online brokerages don’t exactly advertise this risk in their tutorials.

Yep I will ashamedly admit that was me yesterday. Got on the AMC train and was shocked to see a negative balance in my account. Luckily I was able to sell with a small profit to cover it but it was a lesson learned.

[PsYcNeT]

https://twitter.com/user/status/1354853920762253315

[Cecil Terwilliger]

Originally Posted by ajr4013

Yep I will ashamedly admit that was me yesterday. Got on the AMC train and was shocked to see a negative balance in my account. Luckily I was able to sell with a small profit to cover it but it was a lesson learned.

Do not be ashamed, you are not alone. Just be glad you didn’t have a massive 5 figure negative balance. I’ve seen grown men cry because of it.

[puckedoff]

They probably reloaded their shorts when they saw it hit $400. If you know what I mean.

Spoiler!

I mean poop

[Table 5]

Originally Posted by PsYcNeT

https://twitter.com/user/status/1354853920762253315

You think they would let a fantastic opportunity like this go to waste?

[CroFlames]

Guys we are on page 99.

That means the GME will rise to 2,857 tomorrow.

[Cecil Terwilliger]

Originally Posted by Flaming Homer

easily solved by not allowing market orders. Only allowing you to reduce your position and not buy is market manipulation.

If I want to take my money and throw it all away thats my right. But thats not what this is all about. It's about allowing big money to recover their footing and let them all slip out the back door while the prices are being capped down. I do really hope this gets looked into. And I would imagine RobinHood will never recover from the PR from this. They are going to get taken to the woodshed.

How is it market manipulation to refuse to allow people to borrow money to invest? Shouldn’t leveraging be explicitly disclosed and agreed to by the client on each trade? Why wouldn’t they just reject the entire trade?

It’s always seemed like a loophole to me. To benefit the banks of course.

[Fuzz]

Originally Posted by CroFlames

This literally happened to me, so yes it can. Nothing that dramatic.

My investment account with my bank was -1,800 because I bought shares afterhours thinking it couldn't possibly rise that fast.

I called the bank to see what I need to do, and they said you better cover that off within 24 hours, or they will automatically and arbitrarily sell stock within your account to cover it off.

I shudder to think if you didn't have the money and were -20,000.

This seems like something that should be behind a few dialog boxes of "are you sure you want to do this?" Or have an option for a max amount or something that forces you to put something in, even if it's $10 million. This seems like it's setup for disaster?

[CroFlames]

Originally Posted by Fuzz

This seems like something that should be behind a few dialog boxes of "are you sure you want to do this?" Or have an option for a max amount or something that forces you to put something in, even if it's $10 million. This seems like it's setup for disaster?

I figured at the time if the stock rose dramatically, it would automatically just purchase less shares. Not "overdraft" my account.


Lesson learned, and thankfully it wasn't harsh. But yes, you are totally correct.

[PsYcNeT]

From earlier this AM

https://twitter.com/user/status/1354792737074241538

[Patek23]

Originally Posted by Cecil Terwilliger

How is it market manipulation to refuse to allow people to borrow money to invest? Shouldn’t leveraging be explicitly disclosed and agreed to by the client on each trade? Why wouldn’t they just reject the entire trade?

It’s always seemed like a loophole to me. To benefit the banks of course.

Your assuming everyone is using a margin account or putting in a market order. If I have 10k in my account and I wanna throw all of it in a limit order on a stock I should be able too.

I can understand certain things being capped. But if I have the money and you wont let me buy it thats BS.

disclaimer- I dont think this WSB is good in the long run or at all really. And aside from throwing a little fun money on AMC for ####s and giggles Im not involved in this squeeze the shorts hold til we die scheme. But if people wanna spend their money you should be allowed too. Just because wallstreet is getting some of their tricks thrown back at them to push pricing in a profitable position isnt a good enough justification to do what they are doing here.