To be clear, I'm not claiming Citadel created double digit drops in SK Hynix / Samsung. I am saying that as market vol hits, vol traders might choose to make it worse. And when word hits the street someone has a liquidity position, prop traders WILL come and pressure. SA's filings were clear how concentrated they were, and this was known. In this case, Citadel (hedge fund) bought, while I imagine Citadel Securities would have been doing this (speculated upon) trading. We'll know more when the filings come out though. I'll be curious what of the portfolio they kept and what they worked / rolled in the market
It really sounds like market manipulation... But oh well it is the biggest boys doing it so it can't be that illegal... Free markets and everything for them right?
Situational Awareness filed a 13F that lists a hedge fund’s long and short positions with the SEC. It’s public information, forcing an overleveraged fund to liquidate by pressuring the instruments they’re exposed to is not market manipulation, leverage cuts both ways and all of the people/institutions involved are professional/sophisticated investors
There's something amusingly circular about these conversations, because clearly laypeople like me and the person you responding to are saying "that sounds like it shouldn't be allowed" and the invariable responses are always "it is allowed!"
The comment literally says it: "it can't be that illegal"
Im not a trader but my understanding was that some traders at Citadel heard a rumor these guys were exposed, which gave Citadel an advantage because they knew they would have to liquidate? That doesnt sound like market manipulation to me, just trading with all the information you have
You make it sound like a conspiracy theory but it's just rational behaviour.
Large amount of leverage / shorting / concentrated bets in a single stock => increase probability of large swings in that stock's price => bigger risk of sudden market moves => bigger risk to market makers => market makers limit their exposure.
