U.S. stock market staged a fierce battle between retail investors and Wall Street institutions.
A stock trading community called Wall StreetBets called on members to buy some of the stocks that were seriously shorted to fight against the large institutions on Wall Street.
Under the long-short duel, the share price of a physical game retailer “Game Post” that was bullish by the agency began to soar.
Just as retail investors were reveling, the fierce battle ushered in a very dramatic sequel: on the 28th local time, Robin Hood, an American securities trading platform, imposed restrictions prohibiting the purchase of some stocks, and game stations, AMC and other speculatively bought stocks fell.
One night of panic! Retail investors forced it short. Wall Street launched a counterattack by “drawing the network line”
Robin Hood, a U.S. securities trading platform, said that users will only sell these shares and no longer be allowed to buy.
In addition to “game post” and “AMC”, Robin Hood’s restricted stocks include American Airlines, Best Buy and Nokia. Robin Hood said they also raised margin requirements for certain securities, a move that could protect startups from stock slumps.
Amazing reversal! Retail investors in the United States were “encircled and suppressed” and group stocks plummeted collectively.
After Robin Hood took action, affected by a large number of retail investors unable to trade, the “Game Post” fell more than 60% after a 37% rise in the opening, and fell by more than 44% at the end of the 28th, rising for five consecutive trading days before the end.
In addition, BlackBerry’s share price plummeted 40%, and “AMC” also fell more than 56%.
Burn yourself! Retail investors sue the U.S. brokerage platform and may be investigated by Congress.
Robin Hood’s move was criticized, and many retail investors sued Robin Hood trading platforms for “game post” stock trading problems.
In addition, the behavior of American brokerages has also aroused concern to the legislature.
U.S. House member Alexandria said on social media that Robinhood Securities’ move was “totally unacceptable”, and Robinhood Securities needed to explain why retail investors were restricted from trading stocks and called for a corresponding hearing.
Speaker of the U.S. House of Representatives Pelosi said on the 28th that Congress will also conduct its own investigation in response to the recent stock market situation.
Speaker of the U.S. House of Representatives Pelosi: This is very interesting.
I know that the government is investigating this matter, and the Securities and Exchange Commission is also investigating. We will all investigate.
What changes may this short-selling wave bring to the regulation of U.S. securities trading, what are the current market expectations, and how will the situation further develop?
Retail investors forced the short tide to spread. Demand for European trading platforms increased sharply.
The trend of retail short-selling from the United States has also spread to Europe in overnight trading.
On many trading platforms, the number of inquiries and trading volumes of these individual stocks that have been pulled up recently has also surged.
Trading 212, a British trading platform, issued a notice saying that it has suspended processing new customers due to unexpected surge in demand.
Robin Hood, the “tail base camp” in the United States, is in the eye of the storm.
However, due to the restrictions taken by several trading platforms in the United States, all relevant stocks closed sharply.
However, the way these trading platforms “roughly” issued bans has also caused great controversy.
In particular, Robinhood Robin Hood, a popular trading platform preparing for listing, was once regarded as the stronghold of retail investors in the United States, but some voices questioned that the real fianioner behind it was actually a large Wall Street company.
Financial institutions, and there are even rumors that the ban was guided by the large hedge fund Citadel, which, despite the clarifications made by castle investment, the opposition between retail investors and institutional investors is still intensifying.
Robin Hood in Focus is a start-up company based in Silicon Valley, California, which was founded in 2013.
It attracts many young retail investors because it does not charge users for transactions. Last year, the number of users of this platform has increased to 13 million, with an average account size of only 1,000 to 5,000 US dollars, which is arguably one of the most important retail gathering places in the United States.
This kind of zero-fee trading platform encounters various social media such as Reddit, which enables retail investors to gather together, amplifies the effect, and eventually ferments into a powerful short tide.
Now, the U.S. Congress has attached great importance to it and plans to hold a hearing on market manipulation, but which party is manipulating the market is still a controversial issue.
U.S. Senator Elizabeth Warren: Now there are many rich people on both sides trying to manipulate the market.
Suddenly, billionaires and some hedge funds began to shout, just because they are not the only ones who profit from manipulating the market.
That’s why we need to have a Securities and Exchange Commission to formulate a Clear rules for market manipulation and the backbone to enforce them.
Who is the winner of the short war?
In terms of regulation, the two most controversial topics are short-selling system and margin trading options.
Musk expressed doubts about the short-selling system on Twitter, but it is difficult to make major adjustments in the short term.
Biden’s newly nominated chairman of the new Securities and Exchange Commission has always been tough on Wall Street, and whether more new changes may occur during his tenure is our priority wait-and-see direction.
Laura Unger, former acting chairman of the Securities and Exchange Commission: Now the Securities and Exchange Commission is in a relatively difficult period. They are in the handover process.
If the SEC believes that the market is manipulated, they have the power to suspend trading. Unfortunately, in this way, it is almost certain that people who hold “game post” stocks will lose money.
After many days of fierce long-short battles, the bearish bets of “game post stations” increased.
Some investors warned that short-selling by retail investors was not beneficial to the public, and inexperienced investors may eventually “immote themselves”.
