Robinhood is not the only brokerage that limited buys on GameStop this week, so why is it catching all the heat?

Maybe because @stoolpresidente & others were quick to spread a theory that hedge funds must have forced the move? Or, Robinhood acted alone

A thread on facts 1/X

In our 20-minute interview with Robinhood CEO Vlad Tenev I tried to push for answers tied to their decision in 2018 to internalize a boring but important part of users' trades to boost revenue

Their decision came with a tradeoff: A spike in volatility could be very, very bad 2/X

It's a behind the scenes part of your trade, but Robinhood or E*Trade passes your stock order to what's called a clearing house

They carry some liability in the days it takes for your trade to settle. That usually isn't a problem, but can become one if a stock swings fast 3/X

Most smaller brokers forgo added revenue to outsource the duties of a clearing house to giants like Apex Clearing, which solely focus on this part of your trade

But Robinhood in 2018 decided to cut ties with Apex to build their own clearing house called Clearing By Robinhood 4/X

Building your own clearing house is ambitious. TD Ameritrade and Schwab built their own but they are industry titans

In Robinhood's own blog they trumpeted their achievement as the "only clearing system built from scratch, and on modern technology, in the last decade." 5/X

How I Trade

Easy. I trade with the trend. Buy low sell high for up trends. Sell high, buy low during down trends. I don’t care about fundamentals. Often I don’t even know what sector the stock is in. Half my trades, don’t even know the name of the company.

I look at the setup. I look for skew. If a few other variables line up. I stalk it for an entry.

Then I use options to maximize my capital. I mitigate the risk with diversification.

How to spot the trend?

Let’s take a look at this chart. Now. Let’s trade it.

I have no idea how. There are no landmarks. It could be going up, or down, maybe sideways. If I have no clue where it’s going. How do I make a plan? Where do I enter? Where is the exit?

Elliott Waves Principle

Now this one. A simple fact. If you see a 1-2 setup. 3 is next. 3 runs fast and hard. Usually between 100% to 161.8% of 1. However if price break down below 2. This trade is invalid. We have to consider an alternative.

Can you manage a trade like this?

How long does it take to learn Elliott Waves?

Months probably years to be an expert in it.

Not that is not going to do you any good eh? Years to master something before making any money.

Vascon Engineers; Price objective INR 30
Buy in 2 tranches between INR 14.5-12

Strong Execution record: 
The company has strong clientale  and has more than 30 plus years of experience across commercial, residential and own real estate development which include big names

like Cipla SeZ, Ruby Mills  Mumbai, Suzlon  one, MLCP Delhi Airport and various IT companies like Zensar, WNS , IBM, Mastek, Mphasis  etc.

Company has strong order book of 2000 cr which is 4x its FY20 revenue gives visibility of next 2 -3 years. The company has started

winning new orders also.

The company is confident of  reducing its current NET debt of INR 187crores substantially from revenues of existing projects only, Montization of non core assets and sale of Windermere.

The company has taken various cost measures during COVID and

they are likely to remain and would boost profitability of the company and improve margins.

The company has good real estate pipe line of more than 100 cr plus for next 12 -18 months.

75 pc of order book is largely from Government based projects where cash flow issues are

not there.

Company has witnessed good traction in real estate biz post Maharashtra Government announced stamp duty reduction from 5 pc to 2 pc.

Company is confidence of achieving FY20 numbers in FY21 as execution is now at normalcy with sufficient labor availability against

THREAD: Unless you think $XRP is actually going to zero (spoiler- it's not), it doesn't make much sense at all to sell here. "But Credible, I can put the money elsewhere and it will make me money! Why hold this rotten, centralized, scam coin! It's just going to go down (cont.)

forever!" Well good sir, let me put this into perspective for you. Even if you think $XRP will never see ATH, or even past $1 again, chances we see a dead-cat bounce at the bare minimum, are high. Aside from the fact that we are now in a full fledged bull market, we can (cont.)

see that sell pressure on XRP is waning at this time- not just on the BTC pairing, but also the USD pairing. Bullish divs are popping up everywhere, across all TF's. This indicates that at the very LEAST, we will likely see a dead cat bounce here shortly (if not reversal) (cont.)

. So, lets take the chart below for example. If you hold here, even a dead cat bounce to .40 would increase the value of your position by near 100%. If you moved your funds elsewhere, say ETH for example, you would need to ride ETH from current prices of $750 to (cont.)

$1500 just to get the same rate of return. Or, you would need to ride BTC from $28,000 to $56,000 to get the same rate of return. Do you see what I am trying to say? The ONLY reason you would be selling here is if you think that there is actually a decent chance that $XRP (cont.)

I've been trying to understand for some time the impact of $GBTC (Grayscale Bitcoin Trust) on the price of $BTC. Here's a good article to start, and here's a thread on my current thoughts...

There's no doubt that $GBTC has been a driving force in allowing investors to gain exposure to $BTC. For many investors, it provides the easiest way to get crypto exposure. As a result, $GBTC often trades at a large premium (20%-30%) over spot $BTC 2/9

Recently in January, $BTC prices have declined from a high of >$40k to <$30k (now back near $35k). $GBTC's premium to NAV has also dropped to <5% 3/9

It's worth understanding the mechanics of $GBTC. $GBTC allows accredited investors to buy private shares for 0% premium to NAV, and in return the accredited investors are locked up for 6 months. If you are a non-accredited investor, i.e. retail, you don't have this option 4/9

Many sophisticated investors have taken advantage of this arbitrage opportunity. One way an accredited investor can buy private shares of $GBTC is by depositing BTC (often times with leverage). In doing so, they can collect the $GBTC premium 5/9

It's Sunday morning and I'm grumpy 😑😑 and bored 🥱🥱

Why you ask? It's the weekend, everybody loves the weekend. Time to chill and relax and unwind!!

Yeah talk to a Trader!! We hate weekends and Love Mondays 😂🤣😋

So anyway, my threads on real life practical trading seem to be helping you guys and getting lots of good questions

One which I'm getting asked a lot and a traders biggest dilemma is "WHEN TO SELL"!!

I mean we first look thru a 1000 charts, then we select one to enter, get the entry correct nd wowza it's moving in th right direction nd we're in some profits

Shud be super happy rite?

Unfortunately that's a traders worst nightmare!! Why you ask? Cos goddamit when do we sell?

If we sell too early we risk losing big profits

If we wait too long it might just reverse and we lose most of our profits and most likely even end up in a loss

If we do nothing then our blood pressure goes up cos hey we're traders and that's how we are 😋😋

So here's a "DEEP DIVE WITH DEEPS" on "When To Sell"

** Took me several days to come up with this catch phrase for my learning threads. I hope you guys like it

$TSLAQ Instead of having an accrual palooza, I will dribble these out as I have time and available information. The first account to be reviewed: Automotive Leasing Revenues. The remainder of the planet calls this Sales-Type Leasing (ASC 842.) (1/n)

GAAP allows revenue recognition if a manufacture or dealer leases the preponderance of useful life and economic value of inventory. Computer manufactures are significant users of this accounting treatment. The journal entries for this type of leasing are: (2/n)

The sales are the present value of the payments plus down payment. COGS is the cost of the equipment less the present value of the residual payment. (3/n)

The final receivable entry is the residual value added to the lease payment receivable to remove inventory from the financial statements. $TSLA classifies the lease receivable as an Operating Lease Vehicles, net on the balance sheet and they are subject to depreciation. (4/n)

The assumptions in the calculation that can be subject to manipulation: the implicit interest rate of the lease and the residual payments. Lower rates increase capitalization of the lease which gives higher revenues. Larger residual decreases cost of goods sold. (5/n)

Many traders have no consistency when sizing their positions.

The pros have this down to a science.

Here's my dead simple, 3-step guide to position sizing (and to outperforming 99% of other traders in the process):

Step 1:

Define how much of your account you're willing to risk per trade.

Personally, I never risk more than 1% of my account equity.

If I have $100,000 account, I will never risk more $1,000.

This ensures I will never blow up my account on one single trade.

There are successful traders who risk 2-3% of their account per trade, but I find it most calming to risk 1% or less.

The first step in this process is completely up to you - only you can dictate how much risk you can tolerate.

Step 2:

Look for entries & exits that are within 5% (preferably less) of each other.

This means if I buy a stock & have a 5% stop loss, I can put a 20% equity position on & still be risking 1% of my equity.

Your account will thank you w/ 20% in a stock that goes up 100%.

Step 3:

Position size using this formula:

Total equity (100%) / Trade Stop Loss %

So, if your stop loss is 4%, here's the math:

100% equity / 4% stop loss = 25% Equity Position Size

(assuming 1% equity risk).

Here's another hypothetical calculation:

Everything that I’m about to say is coming from someone that has been in the investment management industry for well over two decades now and knows the inner workings of trading and compliance. I also worked for Morgan Stanley early in my career.

1/15

As a registered representative who is fully licensed by FINRA, SEC, and other regulatory agencies, we are tasked with ongoing education, the bulk of which deals with compliance, anti-money laundering and other kinds of malfeasance that may occur while working with clients.2/15

The recent trending of #HunterBiden’s name on Twitter got me thinking back to when #LaptopFromHell was the big story. Some of the material that was released included investment/banking statements that belonged to him. The BD that custodied Hunter’s account was Morgan Stanley.3/15

This is not a conspiracy theory. I’m a believer that there’s truth and then there’s a not quite the truth. Now, every year I must attend a few Anti-Money Laundering (AML) courses to stay current on my continuing education. This is a BIG FUCKING DEAL in the investments world. 4/15

Rarely trust what you hear and always verify everything...including this tweet. MS’s internal trade review desk and other compliance groups SHOULD HAVE FLAGGED Hunter Biden’s accounts for suspicious activity. As far as we know, they didn’t. Why???

5/15

Things I've learned trading for the past 4 years in no particular order while reflecting this Sunday on it all:

* It always goes higher than you expect it will.

* It always comes back down.

* It is very easy to make money in these markets. It is much harder to keep it.

* You will FOMO no matter how much you say you won't. Make sure you don't FOMO with everything and blow your account.

* You don't need some fancy indicator to be profitable. Get solid with a few (personally for me, Ichimoku and OBV are my favorites)

* Horizontal levels are more reliable than diagonal.

* Trade with friends. They'll tell you when you've fucked up and shame you for it.

* You can follow someone else's TA, but you better be able to tell if they're full of shit or not.

* Risk Management will ultimately lead to your success over time. Luck runs out.

* "As soon as you stop trying to get rich quick, you'll get rich quick."

* Beware of getting sucked into coin communities. They're full of hopium, bag hodlers, and outrageous price predictions. Echo chambers are dangerous.

* Always leave behind a small moon bag. Makes you feel better when it does another 10x.

EXTREMELY IMPORTANT INTERVIEW FOR INVESTORS
Especially new ones!

I disagree with most of it, but ULTRA-IMPORTANT!

Here's why
1/
https://t.co/THWfs2SI2y
@stevenmarkryan
@jpr007 @stekkerauto @garyblack00 @TeslaBest @iamtomnash @TeslaPodcast @EvaFoxU @WR4NYGov
$TSLA #Investing

2/ Grantham from GMO is labeled as a value investor, but don't let it fool you. Unlike other "geniuses" he doesn't just check P/E or P/S, but also factors in growth, including possibly huge growth.

Ultimately his preference or bias is for dividend stocks, but he's doing it right

3/ He sees the current condition as a bubble that should burst in. 2 months - unless further inflated by the fed.

If you disagree don't stop reading. Important!

4/ Before pointing to where i agree and where i don't, i think it's ULTRA IMPORTANT for investors to hear opposing views, when they have firm grounds

Fine to disagree but bad to just dismiss or ignore - do that and you might lose everything

(that's the only ADVICE i give, BTW)

5/ Grantham sees the market as a bubble that should burst in. 2 months - unless further inflated by the fed

History shows that on bull mkts once everyone is HUGELY optimistic and put EVERYTHING they have in the mkt, there is nowhere else to go (unless fed gives even more money)

Saturday Thread Time.
Re-Read interview of Ed Seykota from @jackschwager
book "Market Wizards". It's the most philosophical interview among all interviews. Needs to re-read it over and over.
@vivbajaj Sir, a re-tweet would be highly appreciated.

1. Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible

2. The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system.

3. The profitability of trading systems seems to move in cycles. Periods during which trend-following systems are highly successful will lead to their increased popularity.

3.1 As the number of system users increases, and the markets shift from trending to directionless price action, these systems become unprofitable, and undercapitalized and inexperienced traders will get shaken out. Longevity is the key to success.

4. In order of importance to me are (1) the long-term trend, (2) the current chart pattern, and (3) picking a good spot to buy or sell.

1) As the miserable year of 2020 reaches its end, it's time to return to the offices of Hindsight Capital LLC.

For those unfamiliar, this great, albeit imaginary, hedge fund invests with the benefit of a style guaranteed to beat all others: hindsight

2) As such perfect vision would allow infinite returns, certain limits are imposed on Hindsight Capital’s managers:

🚫It can't trade during the year
🚫It can't use leverage
🚫It can't invest in individual stocks
✅It must make broader or sectoral

3) Hindsight can, however, make “long-short” trades.

But the hedge fund must be able to explain how someone might have made such a trade based on only what they knew at the time. Foreknowledge of earthquakes and hurricanes, for instance, is not allowed

4) As for the pandemic, Hindsight Capital’s managers were aware of the novel coronavirus in Wuhan and had little difficulty in predicting how the world would react and what its effects would be.

That was crucial, as will be seen in this thread

5) Hindsight Capital always bases itself in the country with the year’s weakest currency.

In 2020, that was Brazil, giving its managers a great excuse to live out the pandemic from an office overlooking Ipanema Beach

Even though Ryan did an impeccable job at explaining shorting stocks, I just thought of an even simpler explanation using candy bars instead of stocks. @MattJonesRadio @DrewFranklinKSR @ShannonTheDude @ryanlemond

If you buy a candy bar for $1 and sell it for $1.50 you make $.50 profit. Everyone understands that. You expect that the price of candy bars will go up. But what if you expect the price of candy bars to go down? That is where shorting stocks comes into play.

Shorting a stock is like bumming a candy bar worth $1 from a friend with the promise that you will replace it in a week. You then decide not to eat it, but to sell it to someone else for $1. So you have $1 in your pocket, but you owe a candy bar worth $1 so there is no gain.

But, if the price of candy bars drops to $.50 during the week, you have $1 in your pocket from the original sale but the replacement candy bar only costs you $.50, so you make $.50 profit overall.

Buying stock has unlimited profit potential, but low risk. You can only lose your original cost. Say you buy a $1 candy bar to sell, but your stupid brother eats the candy bar before you could sell it. The most you could lose is the original price of the candy bar or $1.

There is a serious misreading, particularly on the Left, as to what is going on with Gamestonks, $GME, $AMC, $BB, $NOK, the whole kit and kaboodle. Equating this with the Capitol Hill insurrection or with Trump or 4Chan is a mistake. Thread.

A lot of leftists are imposing their ideology on Gamestonk, rather than analyzing the conditions. This is a good explainer by @JamesSurowiecki. Using social media, options, and discount brokers, the mob figured out a way to exploit Wall Street.

Of course it's not so simple. Wall Street loses, Wall Street wins. @alexisgoldstein explains how some hedge funds make a killing even as some take a bath. But 1000s of retail investors are being screwed by Wall St and Washington in all of

Additionally, three Wall Street oligarchs have made a collective $2 billion of GameStop alone. Michael Bury, one of the famous traders from "The Big Short," has also apparently made $250 million. So, yes, rich are getting richer.

But if all you focus on is the wealthy, than you cannot explain why there is blatant market manipulation going on with many brokers suddenly preventing retail investors from buying "meme stocks" like GME, AMC, BB, NOK, BBBY. In fact, they can only sell. Who does that benefit?

A lot has been written today about the $GME pump on /r/WallStreetBets from a financial angle.

But I think there's another angle - this it also works as a *multiplayer game* and one with an interesting design.

Don't believe me? Let's look at it structurally!

1/

WSB pump of $GME exhibits a number of gamelike elements:
1. resource mechanics
2. multiplayer social mechanics
3. progression mechanics
4. multi-system interactions
5. prediction complexity, and
6. a powerful player fantasy to tie them together

2/

1. Just by itself, the stock market is an engrossing game (for those who can afford the time and money). It's got a variety of simple resource mechanics (buy / sell stocks), more complex mechanics (buy / sell options), super complex mechanics (would you like some futures?) ... 3/

... and a very high analytic complexity (which mechanic should I apply to maximize return, short term or long term?).

Like in chess, this analysis is very hard but therefore interesting.

And the system gives somewhat clear feedback about how well you're playing ($$$). 4/

2. Now WSB specifically adds social mechanics. Being a lone wolf timing the market is one thing - but banding together to see what you can do together, now that's something else!

Specifically WSB allows not just socializing/meta, but also for coordination. 5/

1/7: I understand that #Ripple's selling concerns many people. But the question is... how do you responsibly distribute Ripple's 50B $XRP? Ripple holding so much #XRP is one of the biggest complaints about XRP and why so many people don't like it and may also prevent ODL adoption

2/7: Escrow was introduced to help this, but that $XRP is still in Ripple's custody. They really need to distribute it. But how? Ideally, it should already have already been done years ago, but you can't go back in time to do it. @JoelKatz has talked about this challenge before.

3/7: So we're against them holding it and we're also against them selling it. So how do they distribute it? They can't give it away, who gets it, how do they choose? Giveaways this late in the game also negatively affect prices. Higher supply = lower demand = lower prices.

4/7: Ideally, they would only distribute this to Financial Institutions for use in #ODL, but unfortunately, there's not enough demand for the utility of XRP through ODL. Perhaps because Finacial Institutions don't want to hold it/use it due to regulatory uncertainty.

5/7: As I see it, there are a few options for distribution:
a) Incentivize the use of ODL despite regulatory clarity - such as giving incentives to #Moneygram,
b) Lock it back up in escrow, effectively reducing supply, but giving #Ripple custody.