Don't know if this has already been posted - Fidelity has halted trading as well. Or at least functionally. Their trading ticket apparently doesn't allow limit buy orders above the share price. The ticket says 10%, but I just tried to enter an order for $240 (shares $230) and was denied with that reason.
I plan to write a blog about this (I don't have a twitter account, else I'd post there and try to drum up support for this): whether the SEC steps in and eliminates the close-only status, the thoughts I have here apply. I'm sure I won't be the only one - I'll be one of many.
First observation is the incredible moral hazard the Shortseller's Enrichment Commission has just implemented. The ONLY way this could have vaguely been ok would have been to implement the close-only, but lock the share and option prices either at the closing price at end of after market yesterday, or at open of market today. Or at the moment that the decision was made industry wide. So yes, buyers can buy, and sellers can sell, but if the shares were at $400 at the moment that was enacted, then all of those transactions would be happening at $400. The SEC might also have offered to remove regulatory fees either on these limited list of companies, or for the whole market, for the duration of this freeze.
It still wouldn't have been ok, but it wouldn't have been such a grotesque market manipulation by the regulators of that market.
I'm holding my trivial position (100 shares / $30k) specifically in order to maintain my personal interest in this situation. Knowing full well that the SEC has made it clear that they can and will take my $30k and give it to the hedge funds.
My view on this is that the ramifications for this are going to be far reaching. I'm not only going to be contacting my congress critters, I will also be contacting the opposition parties about this and making my feelings clear on this. This is sufficiently bad enough, that the SEC has just turned me nearly completely into a single issue voter.
I'll tell my current representatives that anything other than their name on both an immediate and unanimous resolution condemning this regulatory choice, encouragement of the executive branch stepping in and making this right (meaning - either bust all of the post freeze trades, and reenable trading at that fixed price, or better - reopen trading immediately and figure out how to compensate the losses of the panic sellers), AND fast action on financial market reform (it might be as simple as reimplementing the uptick rule full time, for all shares).
I'll tell the other parties that if the incumbent doesn't take this action, then all they need to do is run a candidate on this issue as their platform with candidates that are better than fringe lunatics (hopefully a lot better, but my standards just got really low) to earn my vote.
And I plan to agitate for this stance by all citizens.
I skipped a bunch of pages, but I did see somebody point out that every seller needs a buyer, every buyer needs a seller. This close-only directive is purely to the short sellers benefit. They could simply chat at the country club about what price they find acceptable for closing their positions, make that offer, and wait for the panic sellers. If they're vaguely smart, they will compete amongst themselves to see who can get out of their position the fastest, which will slow the rate of decrease in the share price. If they're stupid and view it as the money making opportunity that it is, they could decide on $10, or $1, or $0.01 per share.
But this position is 100% thumb on the scale to the benefit of the short sellers (and option sellers - it just occurred to me that all options might need to have their expirations extended by 1 week per week that this continues).
I realize that this has always approximately been true. But now it is out in the shadows in such a way that people not directly impacted can understand it, people with a good understanding of how the stock markets work as well as a poor understanding of how the options markets work, as well as people who don't really follow the markets. PLUS the people that these people know.
Enough people to start a political movement (not enough to start a political party).
I explicitly grant, and encourage, anybody and everybody here, to share these ideas with others as they see fit. That could mean stealing the ideas with or without attribution to write your own blog, tweet about this, link to this particular post via other resources, or anything else that strikes your fancy.
I plan to be developing these ideas into a blog and posting that when I have it done. The challenge for me when that blog is written is that I have a nearly 0 social media presence, so I'll be looking for others to help with socializing this. I think that Elon and Chamath at minimum have big followings and would most certainly get on board.
I think that Obama would get on board. I think that Donald would get on board. I think that all of the former presidents would get on board (they're post elections for themselves - that provides a lot more freedom to take this sort of position. For Donald specifically, this position will cost him finance industry donations, but will be add luster to the populist position he promotes (which is why I think he would get on board as well) and he could easily turn this into an issue if he decides to run again in 2024 as he's been hinting..
I think that we can even get our brokers on board, at least with the reforms. They might not be able to survive this situation without this particular remedy, but I think they can be helped to see which way the wind is blowing. I'll be talking to Fidelity about this situation, and their apparent absence at the SEC when this notion was being considered. Considering their size, I'm confident they were consulted at least a little bit, and that means that my broker wasn't there in the room and advocating on my behalf. Worse they were advocating, or at least going along with, an action that they knew would be detrimental to every one of their customers with a position in any of these companies.
With enough vocalization about this, I think that every elected representative will want to get on board regardless of party. This isn't a party issue.
My disclaimer is brief - I'm not a lawyer, so I may have used terms that have specific legal meanings, without intending them in that fashion. I tried to take out the more incendiary thoughts I had, and keep this as non-inflammatory as possible.
Nonetheless, I'm a mad as hell voter, and my representatives are going to know it.
