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'''Seventh''': The regulators are going to want to do ''something'' to ''someone''. It’s hard to see how that could be some HODLer on Reddit. Nor the Hedgies: they were just doing the deep-state, Pizzagate stuff all hedge funds do. A few market infrastructure players look to be volunteering to take the rap by strangling long interest amongst the day-traders, while the lucky old deep-state-connected hedgies carried on with unfettered access (barring the short-tick requirement, which meant they couldn’t short on a down-tick). But the sense the market infrastructure guys were acting out of the same good intentions that path many a road to hell: some little people are, eventually, going to get hosed here, and they were intervening to stop that — took on a rather greenish cast when it turned out that the retail platform’s biggest [[market-maker]], and [[Payment for order flow|payer of an enormous amount for order flow]] was closely associated with one of the significant short positions. Now, there is no allegation of actual dastardly behaviour — these organizations have impermeable [[Chinese wall]]s, but still — it ''doesn’t look great''. | '''Seventh''': The regulators are going to want to do ''something'' to ''someone''. It’s hard to see how that could be some HODLer on Reddit. Nor the Hedgies: they were just doing the deep-state, Pizzagate stuff all hedge funds do. A few market infrastructure players look to be volunteering to take the rap by strangling long interest amongst the day-traders, while the lucky old deep-state-connected hedgies carried on with unfettered access (barring the short-tick requirement, which meant they couldn’t short on a down-tick). But the sense the market infrastructure guys were acting out of the same good intentions that path many a road to hell: some little people are, eventually, going to get hosed here, and they were intervening to stop that — took on a rather greenish cast when it turned out that the retail platform’s biggest [[market-maker]], and [[Payment for order flow|payer of an enormous amount for order flow]] was closely associated with one of the significant short positions. Now, there is no allegation of actual dastardly behaviour — these organizations have impermeable [[Chinese wall]]s, but still — it ''doesn’t look great''. | ||
'''Eighth''': This isn't just “geeks versus masters of the universe”. It is ''humans versus [[algorithm]]s''. The hedge funds industry has the analytical fire power of a fully operational Death Star. They can set their heat ray on an unsuspecting planet and blow it to smithereens. But they didn't bank on a little planet full of cuddly, bear-like, tree-dweling Redditors ''behaving in an unexpectedly concerted way''. Algos can cope with dumb, random, Gaussian behaviour — even the odd tail event. But the retail markets isn’t meant to hit back in coordinated, targeted strikes on weak points. This is predatory, fast learning, velociraptor carry-on. The retail market is meant to be a brontosaurus. | |||
{{sa}} | {{sa}} | ||
*[[Short selling]] | *[[Short selling]] | ||