Peterffy - "System Dangerously Close to Collapse"

[Option_Attack]

IB founder says the GME fiasco almost wreaked trading:

"‘What I would like to point out here is that we have come dangerously close to the collapse of the entire system, and the public seems to be completely unaware of that, including Congress and the regulators.’

Really? A couple stocks slamming shorties could have blown out the whole market? Truth? Or drama queen?

https://www.marketwatch.com/story/w...of-gamestop-hearing-11613600319?mod=home-page

 

[zdreg]

Really? A couple stocks slamming shorties could have blown out the whole market? Truth? Or drama queen?

error of extrapolation or tipping point?

 

[betcashrun]

Assuming 62 million of shares sold short and a GME closing price of $997 ($650 above its top) it means an additional transfer of $40 billion from the short side to the long side, enough 'to collapse the entire system'.

 

[Cuddles]

this whole GME animosity to the free market from Peterffy is making me want to look at other brokers. Not that they'd miss my poverty cash

 

[eastern_warrior]

this whole GME animosity to the free market from Peterffy is making me want to look at other brokers. Not that they'd miss my poverty cash

I think you miss the point completely. If you followed him over the years he is all about free markets. He is pointing out a flaw in the system that has been exposed and became apparent to some of the clearing houses and brokers during the GME saga.

 

[ZBZB]

I think you miss the point completely. If you followed him over the years he is all about free markets. He is pointing out a flaw in the system that has been exposed and became apparent to some of the clearing houses and brokers during the GME saga.

You can see his political adverts from 2012 on YouTube.

 

[guru]

this whole GME animosity to the free market from Peterffy is making me want to look at other brokers. Not that they'd miss my poverty cash

The real issue is that other brokers aren’t so obsessive with risk, and sometimes give traders couple days to cover for margin calls. Wouldn’t you be concerned that in worst case scenarios they may go under while only IB might survive?

 

[zdreg]

Wouldn’t you be concerned that in worst case scenarios they may go under while only IB might survive?

No. Risk has been socialized in the US, particularly for the financial industry. Most of us remember bank bailout in 2009. If the shit hits the fan the Fed will lean on IB to bailout a good part of the industry. e.g. jamie dimon and bear stearns

 

[Pekelo]

Assuming 62 million of shares sold short and a GME closing price of $997 ($650 above its top)

$347 was the highest closing price. Also how could be the closing price above its top?

 

[Snuskpelle]

$347 was the highest closing price. Also how could be the closing price above its top?

He is discussing a hypothetical scenario.