02-03-2021, 10:27 PM
(02-03-2021, 04:40 PM)chascornell Wrote: One thing they don’t explain very well on Wallstreetbets Reddit page is what happens when the HFs can’t cover their shorts
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The shorter of course goes bankrupt.
Then the broker they have been using would be responsible for sorting out the mess. (this is to ensure that the broker keep an eye on their clients risk profile.. which they didn't do apparently. This is why your broker has margin limits etc and will margin call the second they feel it's necessary.)
I have no idea what happens if the broker can't cover the losses either. But somehow the positions have to be cleared, and they won't clear in the bankruptcy of an investing company because that doesn't makes stocks disappear. (or appear out of nowhere in this case)
The US and blatant corruption at the top level... it never ceases to amaze me how easy it is there. Sure, it happens in the majority of countries but at least the others TRY to hide it!
Apparently someone has decided that Janet Yellen is a good person to be pulling the ropes in the official side on this. Despite that it's public knowledge that Citadel (owner of Robinhood) just paid her $800k recently to make a speech or something.