11 ms·

Kearns may not have realized that his negative cash balance displaying on his Robinhood homescreen was only temporary and would be corrected once the underlying

Kearns may not have realized that his negative cash balance displaying on his Robinhood homescreen was only temporary and would be corrected once the underlying stock was credited to his account. Indeed it’s not uncommon for cash and buying power to display negative after the first half of options are processed but before the second options are exercised—even if the portfolio remains positive. “Tragically, I don’t even think he made that big of a mistake. This is an interface issue, they have slick interfaces." I think this is the saddest part. This definitely is entirely Robinhood's fault. Saying so is basically saying a casino is at fault for somebody committing suicide because of a gambling loss. But a better UX could have helped in this case.

awinder 6y ago
It’s probably a little weirder than that, because what (seems to / likely may have) happened wasn’t even a loss, just a state in the clearing of 2 options. So what if you thought your life savings vanished but they really hadn’t? I’m not even positing an answer but what a horrible incident.
electricviolet 6y ago
I don't think it's fair to say this "definitely" isn't Robinhood's fault. They deliberately market to beginning traders and make these kinds of complex trades available to them. If they're going to do that, they need to make the interface crystal clear even to someone who doesn't know what they're doing.
jrumbut 6y ago
If he had gambled and lost $700+k then I'm kind of with you, but he hadn't. When it all shook out he might have secured a small profit or taken a loss proportional to his original stake ($16k). It's showing the life changing loss without giving the user sufficient context or insight into what's happening that's the problem.
Agathos 6y ago
A casino is a funny comparison here. I doubt Robinhood wants to be regulated the way casinos are. Casinos in most jurisdictions are mandated to take at least minimal steps to address the risks of problem gambling. For example, posting hotline numbers to help problem gamblers, training employees to spot problem gamblers, and in some cases even banning known problem gamblers. If a casino was found to be doing none of those things, when a suicide occurred, I suspect it would be in deep trouble.
bllguo 6y ago
Yeah as uncomfortable as it is to say, you have to put some blame on the 20yo with no income who decided to play with financial instruments beyond his knowledge.. There's a broader tension here with the _perils_ of democratization and freedom that I think is a common thread shooting through many of the issues the Western world is grappling with in the information age I'm personally of the belief that Robinhood absolutely deserves fault for allowing normal Joes to trade options at all, but many would argue allowing people that capability is a net good
- twostorytower 6y ago
  That's totally fair. Robinhood definitely needs to put better rails and better UX to protect against these cases. But I think there's a lot more to the situation though. It's really horrible that his first instinct was to jump to suicide, rather than talk to somebody. His parents. Robinhood support. Any additional step could to led to him understanding that his position was not as bad as he thought it was. I just wish he felt he could have talked to somebody instead of feeling like there was no way out. The whole thing breaks my heart.

awinder 6y ago

It’s probably a little weirder than that, because what (seems to / likely may have) happened wasn’t even a loss, just a state in the clearing of 2 options. So what if you thought your life savings vanished but they really hadn’t? I’m not even positing an answer but what a horrible incident.

electricviolet 6y ago

I don't think it's fair to say this "definitely" isn't Robinhood's fault. They deliberately market to beginning traders and make these kinds of complex trades available to them. If they're going to do that, they need to make the interface crystal clear even to someone who doesn't know what they're doing.

jrumbut 6y ago

If he had gambled and lost $700+k then I'm kind of with you, but he hadn't. When it all shook out he might have secured a small profit or taken a loss proportional to his original stake ($16k). It's showing the life changing loss without giving the user sufficient context or insight into what's happening that's the problem.

Agathos 6y ago

A casino is a funny comparison here. I doubt Robinhood wants to be regulated the way casinos are. Casinos in most jurisdictions are mandated to take at least minimal steps to address the risks of problem gambling. For example, posting hotline numbers to help problem gamblers, training employees to spot problem gamblers, and in some cases even banning known problem gamblers. If a casino was found to be doing none of those things, when a suicide occurred, I suspect it would be in deep trouble.

bllguo 6y ago

Yeah as uncomfortable as it is to say, you have to put some blame on the 20yo with no income who decided to play with financial instruments beyond his knowledge.. There's a broader tension here with the _perils_ of democratization and freedom that I think is a common thread shooting through many of the issues the Western world is grappling with in the information age I'm personally of the belief that Robinhood absolutely deserves fault for allowing normal Joes to trade options at all, but many would argue allowing people that capability is a net good

twostorytower 6y ago
That's totally fair. Robinhood definitely needs to put better rails and better UX to protect against these cases. But I think there's a lot more to the situation though. It's really horrible that his first instinct was to jump to suicide, rather than talk to somebody. His parents. Robinhood support. Any additional step could to led to him understanding that his position was not as bad as he thought it was. I just wish he felt he could have talked to somebody instead of feeling like there was no way out. The whole thing breaks my heart.