COVID Economy

[reinko]

Heartbreaking story...

https://www-forbes-com.cdn.ampproject.org/c/s/www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/amp/

[jesmu84]

Heartbreaking story...

https://www-forbes-com.cdn.ampproject.org/c/s/www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/amp/

Brutal

Wall Street is a casino.

[Hards Alumni]

Brutal

Wall Street is a casino.

Yes, but play stupid games, get stupid results.

[MU82]

Heartbreaking story...

https://www-forbes-com.cdn.ampproject.org/c/s/www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/amp/

Effen amazing. And extremely sad.

[Jockey]

Brutal

Wall Street is a casino.

Get rich (or in most cases, poor) quick. The American way.

[GooooMarquette]

Heartbreaking story...

https://www-forbes-com.cdn.ampproject.org/c/s/www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-commits-suicide-after-seeing-a-730000-negative-balance/amp/

Very sad. A story like this begs the question of whether a person should be required to be an accredited investor to invest in certain types of trades, even if they involve SEC-regulated securities. This poor kid obviously had no idea what he was doing.

[forgetful]

Very sad. A story like this begs the question of whether a person should be required to be an accredited investor to invest in certain types of trades, even if they involve SEC-regulated securities. This poor kid obviously had no idea what he was doing.

I'm generally against such regulations. But here I see two problems/solutions: 1) In a trade of this type, the book-keeping systems could easily be modified with a warning/alert that the balance does not yet include reconciliation from shares acquired. 2) You should have to approve certain types of trades, and acknowledge associated risk. Here, even after reconciliation, unless I'm reading it wrong, he is purchasing over 700,000 in shares. Unless he had that kind of money in his account, or approved buying on margin, that shouldn't be happening.

[jesmu84]

I'm generally against such regulations. But here I see two problems/solutions: 1) In a trade of this type, the book-keeping systems could easily be modified with a warning/alert that the balance does not yet include reconciliation from shares acquired. 2) You should have to approve certain types of trades, and acknowledge associated risk. Here, even after reconciliation, unless I'm reading it wrong, he is purchasing over 700,000 in shares. Unless he had that kind of money in his account, or approved buying on margin, that shouldn't be happening.

There's lots of things that *shouldn't* be happening on wall St. Alas, deregulation.

[JWags85]

Very sad. A story like this begs the question of whether a person should be required to be an accredited investor to invest in certain types of trades, even if they involve SEC-regulated securities. This poor kid obviously had no idea what he was doing.

As an active stock/options trader, since I was his age really, this story was sad but interesting in a lot of ways. I’m never got to defend Robinhood, I think it’s a scummy app and has been since the beginning. I have no clue how they are in business or retaining customers after their entire platform was down for an ENTIRE DAY multiple times during the crash a few months back.  Not to mention every major brokerage is commission free now, so there is no reason to stay with them other than a “simple” interface. I used it briefly but left when I saw some inconsistencies in order fills and realized it was shady in some ways.

So this isn’t a defense of RH, but I have a bit of trouble completely feeling bad and punting any blame from the victim here. He clearly did no research into his leverage or positions. I get that big red number, but it literally is a simple investigation to find out the balance issue. If he was wildly trading credit/debit spreads without knowing what it entailed or what he was doing, as Hards said, play stupid games, win stupid prizes. Also, you need to apply for higher level option trading clearance to do anything more than naked buying or covered positions. He wasn’t some naive sucker. He took advantage of loose limits and freaked out.

Again, I don’t intend this to be victim blaming, and there is PLENTY to side eye both RH and the stock market about, but it rubs me the wrong way that it’s being made out that this kid was some doe eyed innocent who was deceived into a losing position that pushed him to suicide. I call absolute and complete BS that he had no idea he was trading on margin and did know that things could ballon like that.

I'm generally against such regulations. But here I see two problems/solutions: 1) In a trade of this type, the book-keeping systems could easily be modified with a warning/alert that the balance does not yet include reconciliation from shares acquired. 2) You should have to approve certain types of trades, and acknowledge associated risk. Here, even after reconciliation, unless I'm reading it wrong, he is purchasing over 700,000 in shares. Unless he had that kind of money in his account, or approved buying on margin, that shouldn't be happening.

There is a lot that isn’t being shared from a privacy and disclosure perspective. Like I said, I find it very hard to believe he had no part in the margin process. And as far as your second point, I’ve had multiple times where I have an option finish in the money at expiration, usually by some sort of lack of fill. If you don’t have anywhere close to the equity needed to purchase the shares, there is almost always a clearing activity in which they execute, immediately sell the shares, and the difference is credited to you (minus a fee)

[forgetful]

As an active stock/options trader, since I was his age really, this story was sad but interesting in a lot of ways. I’m never got to defend Robinhood, I think it’s a scummy app and has been since the beginning. I have no clue how they are in business or retaining customers after their entire platform was down for an ENTIRE DAY multiple times during the crash a few months back.  Not to mention every major brokerage is commission free now, so there is no reason to stay with them other than a “simple” interface. I used it briefly but left when I saw some inconsistencies in order fills and realized it was shady in some ways.

So this isn’t a defense of RH, but I have a bit of trouble completely feeling bad and punting any blame from the victim here. He clearly did no research into his leverage or positions. I get that big red number, but it literally is a simple investigation to find out the balance issue. If he was wildly trading credit/debit spreads without knowing what it entailed or what he was doing, as Hards said, play stupid games, win stupid prizes. Also, you need to apply for higher level option trading clearance to do anything more than naked buying or covered positions. He wasn’t some naive sucker. He took advantage of loose limits and freaked out.

Again, I don’t intend this to be victim blaming, and there is PLENTY to side eye both RH and the stock market about, but it rubs me the wrong way that it’s being made out that this kid was some doe eyed innocent who was deceived into a losing position that pushed him to suicide. I call absolute and complete BS that he had no idea he was trading on margin and did know that things could ballon like that.

There is a lot that isn’t being shared from a privacy and disclosure perspective. Like I said, I find it very hard to believe he had no part in the margin process. And as far as your second point, I’ve had multiple times where I have an option finish in the money at expiration, usually by some sort of lack of fill. If you don’t have anywhere close to the equity needed to purchase the shares, there is almost always a clearing activity in which they execute, immediately sell the shares, and the difference is credited to you (minus a fee)

Thanks for the info. I was wondering whether something like the immediate sell would exist.

This is significantly outside my area of knowledge.

[The Hippie Satan of Hyperbole]

As an active stock/options trader, since I was his age really, this story was sad but interesting in a lot of ways. I’m never got to defend Robinhood, I think it’s a scummy app and has been since the beginning. I have no clue how they are in business or retaining customers after their entire platform was down for an ENTIRE DAY multiple times during the crash a few months back.  Not to mention every major brokerage is commission free now, so there is no reason to stay with them other than a “simple” interface. I used it briefly but left when I saw some inconsistencies in order fills and realized it was shady in some ways.

So this isn’t a defense of RH, but I have a bit of trouble completely feeling bad and punting any blame from the victim here. He clearly did no research into his leverage or positions. I get that big red number, but it literally is a simple investigation to find out the balance issue. If he was wildly trading credit/debit spreads without knowing what it entailed or what he was doing, as Hards said, play stupid games, win stupid prizes. Also, you need to apply for higher level option trading clearance to do anything more than naked buying or covered positions. He wasn’t some naive sucker. He took advantage of loose limits and freaked out.

Again, I don’t intend this to be victim blaming, and there is PLENTY to side eye both RH and the stock market about, but it rubs me the wrong way that it’s being made out that this kid was some doe eyed innocent who was deceived into a losing position that pushed him to suicide. I call absolute and complete BS that he had no idea he was trading on margin and did know that things could ballon like that.

There is a lot that isn’t being shared from a privacy and disclosure perspective. Like I said, I find it very hard to believe he had no part in the margin process. And as far as your second point, I’ve had multiple times where I have an option finish in the money at expiration, usually by some sort of lack of fill. If you don’t have anywhere close to the equity needed to purchase the shares, there is almost always a clearing activity in which they execute, immediately sell the shares, and the difference is credited to you (minus a fee)

Plus I am sure there were other issues besides this.

[GooooMarquette]

As an active stock/options trader, since I was his age really, this story was sad but interesting in a lot of ways. I’m never got to defend Robinhood, I think it’s a scummy app and has been since the beginning. I have no clue how they are in business or retaining customers after their entire platform was down for an ENTIRE DAY multiple times during the crash a few months back.  Not to mention every major brokerage is commission free now, so there is no reason to stay with them other than a “simple” interface. I used it briefly but left when I saw some inconsistencies in order fills and realized it was shady in some ways.

So this isn’t a defense of RH, but I have a bit of trouble completely feeling bad and punting any blame from the victim here. He clearly did no research into his leverage or positions. I get that big red number, but it literally is a simple investigation to find out the balance issue. If he was wildly trading credit/debit spreads without knowing what it entailed or what he was doing, as Hards said, play stupid games, win stupid prizes. Also, you need to apply for higher level option trading clearance to do anything more than naked buying or covered positions. He wasn’t some naive sucker. He took advantage of loose limits and freaked out.

Again, I don’t intend this to be victim blaming, and there is PLENTY to side eye both RH and the stock market about, but it rubs me the wrong way that it’s being made out that this kid was some doe eyed innocent who was deceived into a losing position that pushed him to suicide. I call absolute and complete BS that he had no idea he was trading on margin and did know that things could ballon like that.

There is a lot that isn’t being shared from a privacy and disclosure perspective. Like I said, I find it very hard to believe he had no part in the margin process. And as far as your second point, I’ve had multiple times where I have an option finish in the money at expiration, usually by some sort of lack of fill. If you don’t have anywhere close to the equity needed to purchase the shares, there is almost always a clearing activity in which they execute, immediately sell the shares, and the difference is credited to you (minus a fee)

Thanks for your input. My trading expertise begins and ends with buying and selling stocks and mutual funds, so my post throwing out the accredited investor idea was mostly just a shot in the dark. You may very well be right that he was more knowledgeable than the story implies.

[JWags85]

Plus I am sure there were other issues besides this.

Definitely. That was one of my first thoughts as well.

 

Thanks for your input. My trading expertise begins and ends with buying and selling stocks and mutual funds, so my post throwing out the accredited investor idea was mostly just a shot in the dark. You may very well be right that he was more knowledgeable than the story implies.

No problem. He was a 20 year old college student who was trading a 5 figure account. It’s not hard to get over your head and the outcome is still tragic, but it just rings hollow when they act like he was a naive teen buying and selling DIS and AMZN who fell victim to an app and Wall Street.

 No matter how easy and user friendly, putting on any of the spread trades that could likely lead to this sort of temporary balance isnt a ”whoops, I clicked buy when I meant to sell. It’s multiple trades on multiple strike prices. You cant “accidentally” enter a spread, even if the app is as fun and easy as Candy Crush.

As for oversight, when you start trading options, there are various levels of approval. This would be under ”Level 3”. To get past Level 1 and Level 2 approval, you need to meet certain equity balance requirements as well as trading history. It’s not like you’re passing the Series 7, but its not like little Timmy can open an account, put $250 in and start ripping huge trades

[warriorchick]

The one Robinhood investor (low 3 figures) I know had  problem which while not life-shattering, were annoying and relatively expensive.

They gave him one free share of stock for signing up, and then sent him a 1099-misc for it.

His two shares of a particular stock had a gain of some sort that required him to complete an additional form for his tax return.  His gain was something like $15; the version of Turbo Tax that includes that form costs $90.  Otherwise, he could have filed with the free version.

[MU82]

Now that all the brokerages do commission-free trading, there is no reason for anybody to use Robinhood.

Fidelity and Schwab even are letting investors buy "slices" of stocks. I am in the early stages of building a college fund for my new grand-twins, and I just bought $50 each of AMZN and GOOGL using Schwab Slices, totally cost-free.

Schwab and Fidelity are SO much better than Robinhood, with lots of good research available, fast times for trades, excellent customer service, never outages, etc.

[MU82]

I feel really sorry for the many business owners who have been decimated by the ramifications of COVID-19.

There was a very good article in today's Charlotte Observer about several of them, and what happens if the governor doesn't go to the next phase this coming week (supposedly it could start on Friday.)

https://www.charlotteobserver.com/news/business/biz-columns-blogs/whats-in-store/article243631032.html?

In particular, there is the stuff about bowling alleys, and one establishment owner who makes a great case for why they should be allowed to re-open.

Paul Kreins is willing to risk a fine or even jail to reopen bowling at his Victory Lanes Events & Entertainment Center in Mooresville June 26, even if Cooper changes his mind about the timing of Phase 3.

Kreins, the local Chamber of Commerce’s 2020 Entrepreneur of the Year, said he has lost $750,000 in revenue so far during the coronavirus closing. He questions the fairness of allowing small restaurants and retailers with a greater potential for crowding to reopen already.

“We are officially in Phase ‘Enough is Enough,’ ” Kreins told the Observer.

In an email, he also assured the center’s 1,000 bowling league players that numerous COVID-19 preventive measures will greet them when the lanes reopen.

Customers who don’t have their own bowling balls, for instance, will choose a pre-sanitized house ball from an attendant. To ensure social distancing of 8 to 10 feet, a lane will remain dark between any lanes in use.

Bowling shoes will be sanitized and disinfected after each use, and employees will wear masks and be temperature-screened every day before clocking in.

Staff at the entrances and exits of the 48,000-square-foot center also will make sure people are social distancing. And floor decals will denote proper social distancing as well.

This entrepreneur estimates that he already has lost $750K, and said he can't see why bowling alleys are forced to remain closed while brewpubs are allowed to be open.

I generally think our governor has done a good job, but I believe there have been a few inconsistencies in his decisions about which businesses can and can't re-open.

It's certainly hard to argue with this bowling establishment's owner, and his steps to keep his facility safe for customers and staff are laudable. I hope the governor lets him and others go back to earning an honest living.

[GooooMarquette]

I generally think our governor has done a good job, but I believe there have been a few inconsistencies in his decisions about which businesses can and can't re-open.

It's certainly hard to argue with this bowling establishment's owner, and his steps to keep his facility safe for customers and staff are laudable. I hope the governor lets him and others go back to earning an honest living.

I feel exactly the same way here in MN. While I don't always agree with our governor's decisions and timing, he generally seems to be consulting with the appropriate experts and balancing safety with business.

But we too have had inconsistencies or gaps that don't make sense. Recently I read an article about how a certain definition permitted most fitness centers to open, but excluded CrossFit gyms. The owner quoted in the article explained how he was willing and able to implement the same protections as similar facilities, and made a pretty compelling case that the distinction was arbitrary. I haven't heard any follow-up, but I hope this got resolved fairly.

[Warriors4ever]

Curiosity question -how do you effectively sanitize the holes in a bowling ball? I would be using hand sanitizer after every use. The shoes, I’m not as concerned about.

[warriorchick]

Curiosity question -how do you effectively sanitize the holes in a bowling ball? I would be using hand sanitizer after every use. The shoes, I’m not as concerned about.

Wear a latex glove.

[JWags85]

Went to brunch today for Father’s Day in MKE. In lieu of traditional menus, they had a QR code that you’d scanned to pop up a digital menu on your phone. Same way with the check, you scanned and a bill payment interface pops up.

I’ve been pretty bearish on the wide scale changes as a result of COVID as it pertains to businesses or professional situations, but this is something I can see getting legs. It’s “green”, it’s a cost savings for the restaurant, etc...

[GooooMarquette]

Went to brunch today for Father’s Day in MKE. In lieu of traditional menus, they had a QR code that you’d scanned to pop up a digital menu on your phone. Same way with the check, you scanned and a bill payment interface pops up.

I’ve been pretty bearish on the wide scale changes as a result of COVID as it pertains to businesses or professional situations, but this is something I can see getting legs. It’s “green”, it’s a cost savings for the restaurant, etc...

It would be great if things like that catch on widely. Like you said, seems like a win-win.

[MU Fan in Connecticut]

Went to brunch today for Father’s Day in MKE. In lieu of traditional menus, they had a QR code that you’d scanned to pop up a digital menu on your phone. Same way with the check, you scanned and a bill payment interface pops up.

I’ve been pretty bearish on the wide scale changes as a result of COVID as it pertains to businesses or professional situations, but this is something I can see getting legs. It’s “green”, it’s a cost savings for the restaurant, etc...

I was thinking that so many restaurants have expanded and simplified ordering take-out.  You don't have to call in and hope they wrote your order down correctly. 

[pbiflyer]

Wear a latex glove.

Was this advice for the bowling or strip club?

[jesmu84]

https://www.cnbc.com/2020/06/21/banks-have-grown-by-2-trillion-in-deposits-since-coronavirus-first-hit.html

Does this mean good, bad or indifferent things for your average American?

[Frenns Liquor Depot]

Went to brunch today for Father’s Day in MKE. In lieu of traditional menus, they had a QR code that you’d scanned to pop up a digital menu on your phone. Same way with the check, you scanned and a bill payment interface pops up.

I’ve been pretty bearish on the wide scale changes as a result of COVID as it pertains to businesses or professional situations, but this is something I can see getting legs. It’s “green”, it’s a cost savings for the restaurant, etc...

I love this.  I’ve been using an Apple credit card with contactless Apple Pay as much as possible.  Between that and some restaurants taking Venmo, etc.  I hope I never have to sign another CC receipt ever again.