Mind if I ask you a question? I’ve got my GME through Charles Schwab, is that A good place? I saw something today about “DRS your shares!”
I’ll be the first to admit I’m a total noob to all this, with a very smooth brain when it comes to knowing all the ins and outs. Am I good in Schwab? Do I need to DRS?
If you have a stock brokerage account with any broker, and you don't do anything special, then the stocks are held "in street name." That means they are registered as if they are owned by the broker, even though the broker's account shows they are owned by you.
Stocks held in street name can be borrowed from the broker and shorted.
By registering the stocks in your own name with the Direct Registration System (DRS), the stock is then in your name and not the broker's name. Those stocks cannot legally be shorted.
The fewer shares owned in street name, the fewer shares available to be shorted (legally), and the worse it is for the short sellers.
So this is not financial advice but just what I've been seeing across the communities here: Schwab is a known PFOF (Payment for Order Flow) contributor, meaning that they have an established relationship with larger hedge funds in order to have those Hedge Funds (HF's) service the original broker's transactions for speed and a secret ingredient that makes the whole shebang worth it for these institutions. That's right, many brokers outsource their order flow to HFs with the tech to come out on top, and I'll explain how as best I can.
The tech behind PFOF at places like Citadel is likely more advanced and proprietary than anything we're used to seeing regarding trades and that's what brokers pay for. When a HF like Citadel can essentially "see into the future" regarding trades, they can act as they're supposed to as a Market Maker (MM) and influence price and keep things generally afloat but the tech has allowed them to hedge so far in advance within the settlement time (usually trading time + 2 days (T+2)) that it's been revealed that they've gotten quite greedy and can essentially perform alll kinds of magical fuckery within that T+2 period and longer depending on how much of an opportunity they see. For example with retail stores HFs thought would be dead by now, but instead got a glow-up and are now exposing all this bullshit and catching these short Hedge Funds (SHFs) with their pants down while assuming essentially infinite risk by creating synthetic shares like I explained previously.
**ANYWAY all that to say I can only really recommend Fidelity but have seen/head less negativity around Schwab than almost all the other usual suspects (TDA, Etrade, WeBull, etc.) I would def not use any of those myself and if you can, get your assets out if this and further personal research indicates that you should! **
Schwab is the second largest broker in the US measured by raw Assets Under Management (AUM), coming in second ($6.7T) only to Fidelity ($11.1T) but remember, Fidelity is the choice of a TON of workplace retirement programs and the like, but they also seem have the assets to walk the walk, and are most likely to stay solvent during MOASS/market crash.
I'm still learning too friend, and hopefully you can use some of my wrinkles to help make decisions for yourself, but Fidelity has been the only broker I've seen to execute DRS transfers within a week, where most others are starting to push timeframes further and further back indicating that they are likely having trouble securing the actual shares, or flat out don't want to pay what they're likely trading for in dark pools, which is likely ~5 figures by now based on some glitch-outs and smoothbrain theorycrafting.
Mind if I ask you a question? I’ve got my GME through Charles Schwab, is that A good place? I saw something today about “DRS your shares!”
I’ll be the first to admit I’m a total noob to all this, with a very smooth brain when it comes to knowing all the ins and outs. Am I good in Schwab? Do I need to DRS?
If you have a stock brokerage account with any broker, and you don't do anything special, then the stocks are held "in street name." That means they are registered as if they are owned by the broker, even though the broker's account shows they are owned by you.
Stocks held in street name can be borrowed from the broker and shorted.
By registering the stocks in your own name with the Direct Registration System (DRS), the stock is then in your name and not the broker's name. Those stocks cannot legally be shorted.
The fewer shares owned in street name, the fewer shares available to be shorted (legally), and the worse it is for the short sellers.
How do I go about registering the Stocks?
Call your broker.
Thanks for that info!
So this is not financial advice but just what I've been seeing across the communities here: Schwab is a known PFOF (Payment for Order Flow) contributor, meaning that they have an established relationship with larger hedge funds in order to have those Hedge Funds (HF's) service the original broker's transactions for speed and a secret ingredient that makes the whole shebang worth it for these institutions. That's right, many brokers outsource their order flow to HFs with the tech to come out on top, and I'll explain how as best I can.
The tech behind PFOF at places like Citadel is likely more advanced and proprietary than anything we're used to seeing regarding trades and that's what brokers pay for. When a HF like Citadel can essentially "see into the future" regarding trades, they can act as they're supposed to as a Market Maker (MM) and influence price and keep things generally afloat but the tech has allowed them to hedge so far in advance within the settlement time (usually trading time + 2 days (T+2)) that it's been revealed that they've gotten quite greedy and can essentially perform alll kinds of magical fuckery within that T+2 period and longer depending on how much of an opportunity they see. For example with retail stores HFs thought would be dead by now, but instead got a glow-up and are now exposing all this bullshit and catching these short Hedge Funds (SHFs) with their pants down while assuming essentially infinite risk by creating synthetic shares like I explained previously.
**ANYWAY all that to say I can only really recommend Fidelity but have seen/head less negativity around Schwab than almost all the other usual suspects (TDA, Etrade, WeBull, etc.) I would def not use any of those myself and if you can, get your assets out if this and further personal research indicates that you should! **
Schwab is the second largest broker in the US measured by raw Assets Under Management (AUM), coming in second ($6.7T) only to Fidelity ($11.1T) but remember, Fidelity is the choice of a TON of workplace retirement programs and the like, but they also seem have the assets to walk the walk, and are most likely to stay solvent during MOASS/market crash.
I'm still learning too friend, and hopefully you can use some of my wrinkles to help make decisions for yourself, but Fidelity has been the only broker I've seen to execute DRS transfers within a week, where most others are starting to push timeframes further and further back indicating that they are likely having trouble securing the actual shares, or flat out don't want to pay what they're likely trading for in dark pools, which is likely ~5 figures by now based on some glitch-outs and smoothbrain theorycrafting.