The wisdom of Conor Sen

But this is probably a damned-if-you-do, damned-if-you-don’t situation. It’s easy to imagine a scenario where RobinHood lets things play out on their own, and for all we know stocks like GameStop might have doubled or tripled from here. But inevitably, whenever this trend ended, there would be stories of working parents who bought call options because they saw everyone else doing it and lost everything, or people thrown out of work as the bursting bubble had broader economic consequences. Why,  members of Congress will ask, were inexperienced retail investors allowed to speculate in complex derivative contracts at all? So while these preemptive decisions may result in negative consequences for RobinHood and others, the bursting of a bigger bubble would be worse.

RobinHood did the right thing here, but they shouldn’t expect any thank you’s.

Here is more at Bloomberg.  (And very good Matt Levine commentary.)  The simple “the market put in place this restriction, this is right, platforms and exchanges reserve the right to restrict value-destroying trading, as indeed they always have” approach is very much underrated these days.


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