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Hey /biz/ going to give a public service announcement cause some of you are alright. What happened with eth today provided a good lesson on why you need to be careful when margin trading. Reddit users got completely cucked because they didn't understand the implications of margin calls. Basically if a broker (in this case gdax) lends you money and you put it into crypto then they have the right to sell that crypto if the total value of it drops below maintenance margin (the amount of value you need to maintain after a trade). When a whale came and started selling like mad the price shot down and the value of peoples crpyto started to go below their maintenance margin which triggered gdax to sell it off which then caused a cascade effect to the point where gdax started selling people's eth for insane prices.
Here's a couple reddit crybabies for your reading pleasure.
https://www.reddit.com/r/CoinBase/comments/6ioj59/gdax_just_raped_me_out_of_10000/
https://www.reddit.com/r/CoinBase/comments/6ipdm0/the_hi_coinbase_are_you_going_to_repay_us_thread/
So remember, don't margin trade unless you absolutely know what the fuck you're doing.
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should post this on reddit but downvotes make me cry
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>>2553472
Coinbase is cancelling the trades that caused the flash crash, though. Nobody's getting fucked.
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And another
https://www.reddit.com/r/ethtrader/comments/6iokzy/gdax_just_sold_a_good_chunk_of_my_ether_at_10/
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>>2553525
do you have a source?
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Good shit pede. Upvoted.
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Should I always keep low buy orders on exchanges with a little sum of money along with it to buy at events like the flash crash today?
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>>2553588
yes
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>>2553588
but understand that an event like this is extremely rare.
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>>2553472
Interesting. So this means that nobody bought ETH for 0.10, right? All the profits went to GDAX.
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>>2553855
No gdax sold the coins for fiat, the profit likely went to other whales who were in on it.
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>>2553889
i don't understand...
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>>2554001
I understand that part. A whale who bought ETH during the ICO dumped 39k ether, which filled everyone's purchase orders, driving ETH prices down. RIght?
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>>2553978
yes, gdax sold their crypto until their account value went back above the maintenance margin (often this lead to gdax selling off ALL of their coins).
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>>2553472
so say all my eth was sold off because of this event, do they have my back?
...or am I fucked?
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>>2555397
you're fucked
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>>2554024
plus the margin calls, because apparently there is a shit ton of people trading on margin that shouldn't be
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lmao /r/coinbase
I'm a retard who did margin calls, but I only did it with 25 bucks invested because I'm a new poorfag.
I am more retarded for not buying ETH at $16 dollars
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https://blog.gdax.com/eth-usd-trading-update-5d8142b5bdc1
"Our initial investigations show no indication of wrongdoing or account takeovers. We understand this event can be frustrating for our customers. Our matching engine operated as intended throughout this event and trading with advanced features like margin always carries inherent risk.
We are continuing to conduct a thorough investigation and will keep customers updated with any resulting actions. With that in mind, it is important to note that these trades are final in accordance with our GDAX Trading Rules (Section 3.1). Honoring properly executed orders is critical to maintaining the integrity of an exchange."
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>>2556211
Normies BTFO
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