FINRA should not impede retail traders. FINRA should instead regulate institutions to prevent them from taking too large positions all on one side as seen with so called "meme stocks". Institutions all have the same information, they all bet on the same side of futures and create volatility far in excess of their ability to cover positions. Through this practice of corporations gambling more than they can pay, they tend to reap profits that are inaccessible to individuals, and when they bet wrong they go under and saddle the market and individual customers with the irrecoverable losses. Retail traders are not the problem here, institutions synchronizing their bets is the problem.
Institutions trading should be forced to prove they can cover losses on all positions, and maintain auditable records that prove their risk management practices are satisfied at the time of each trade increasing their exposure. Institutions should not be allowed to place new short or long positions once too many outstanding positions exist for a security or group of securities such as s & p 500.
Kman Comment On Regulatory Notice 22-08
FINRA should not impede retail traders. FINRA should instead regulate institutions to prevent them from taking too large positions all on one side as seen with so called "meme stocks". Institutions all have the same information, they all bet on the same side of futures and create volatility far in excess of their ability to cover positions. Through this practice of corporations gambling more than they can pay, they tend to reap profits that are inaccessible to individuals, and when they bet wrong they go under and saddle the market and individual customers with the irrecoverable losses. Retail traders are not the problem here, institutions synchronizing their bets is the problem.
Institutions trading should be forced to prove they can cover losses on all positions, and maintain auditable records that prove their risk management practices are satisfied at the time of each trade increasing their exposure. Institutions should not be allowed to place new short or long positions once too many outstanding positions exist for a security or group of securities such as s & p 500.