Student investors reflect on GameStop stock craze
This January, the stock market was rocked by what is now referred to as the GameStop Short Squeeze. Along with others across the country, students at the University of Miami scrambled to get in on the action while it lasted.
This phenomenon started with a group of investors from the subreddit WallStreetBets, who noticed that a hedge fund had purchased shares of GameStop, a company that has been suffering at the hands of digital competitors and COVID-19, at low prices in hopes of selling them short, which has the potential to lead to a short squeeze.
Ken Griffin and
They say the current system added to the
GameStop chaos at the end of January.
Citadel Securities boss Ken Griffin and Robinhood chief Vlad Tenev will both call for a reduction in the time it takes to settle stock trades when they testify to Congress on Thursday over the GameStop saga.
Griffin, whose market-making firm was on the other side of millions of GameStop trades, wants the settlement time to be cut to one day. Tenev will repeat his calls for the system to be instantaneous.
Both executives will argue that the current two-day settlement period exposes buyers and sellers to unnecessary risk, according to testimony released before the hearing.
Andadolu Agency/Getty Images
Reddit day traders tried to beat Wall Street at its own game to prove the system is rigged.
Instead, brokerages locked them out and their holdings tanked, while some hedge funds still won big.
Experts said Wall Street s reaction showed just how high the deck was stacked against small investors.
Keith Gill, the day-trading member of the Reddit group Wall Street Bets who is widely credited with igniting the recent GameStop trading frenzy, claimed in late January that he had turned his $54,000 investment into a $48 million fortune.
Days later, it had been sliced by more than half to $22 million, and regulators had set their sights on Gill, investigating him over potential disclosure violations.
Some protesters vandalized Robinhood s headquarters in Menlo Park, California, according to police. Robinhood security said people threw dog feces and harassed
»
Robinhood s CEO defends high-frequency trading after its handling of the GameStop short-squeeze, saying that the practice yields better prices for the everyday investor
Robinhood s CEO defends high-frequency trading after its handling of the GameStop short-squeeze, saying that the practice yields better prices for the everyday investor
Shalini NagarajanFeb 10, 2021, 21:18 IST
Rafael Henrique/SOPA Images/LightRocket via Getty Images, Brendan McDermid/Reuters
Robinhood s CEO defended the practice of high-frequency
trading, saying it yields better prices.
Vlad Tenev said he ll start a series of occasional posts to explain the mechanics of market makers.
The investing firm was plunged into the spotlight over its handling of the