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Yes. They should be forced to provide the service they promised. It’s not my fault their business model is failing for a particular ticker on a particular day.

Yes. They should be forced to provide the service they promised. It’s not my fault their business model is failing for a particular ticker on a particular day. If they can’t, then some advance notice is needed. Making this decision instantly without giving customers time to move their holdings elsewhere is not okay. That being said, I’m surprised people are still using them for day trading. They don’t have a great track record.

dcolkitt 6y ago
> They should be forced to provide the service they promised Read the TOS. This was never promised.
- function_seven 6y ago
  Yeah, TOS's are famous for being one-sided and permitting all sorts of bad behavior. And for not matching the marketing promises of the product they're attached to. They may be legally entitled to do what they've done. That doesn't make it right. My comment is an "ought" comment, more than an "is" comment. Regulation should moot TOS's that allow this kind of rug-pulling.
- salmon-salmon 6y ago
  This is exactly why people don't like Wall Street. It's smart to pay attention to the TOS pragmatically to protect yourself, but the TOS has absolutely no ethical relevance. To people with a well-adjusted ethical compass, a trading platform blocking trades is a violation of their social contract. You should be aware that if you're citing the TOS in any context other than a court case, most people are going to like you less as a result.
- monadic3 6y ago
  You can't expect a reasonable person to read the TOS. They have a reasonable expectation to get the same service as any other day, even if this conflicts with Robinhood's business model, unless Robinhood made their expected behavior abundantly clear in advance.
arcturus17 6y ago
Should, as in ethically? Surely not legally.
- function_seven 6y ago
  I say legally. A broker-dealer should be required to either give advanced notice of a suspension like this, or have a clearly upfront volatility metric that triggers it. (No, a TOS statement like, "We reserve the right to suspend trading at our discretion" is not a clear rule. It's a weasel clause) Users would then know, in advance, if a particular ticker will be restricted. Either through specific advanced notice, or because they were told that all securities that exceed a volatility of X over Y time period will be restricted. Whatever the rule, it can't be a snap decision that leaves users with no recourse. If you're not an appropriate day-trading app, then don't act like one until you suddenly don't want to be one anymore. Make the rules in advance, communicate them, and let the market decide if you're appropriate for their needs.
  - arcturus17 6y ago
    Again, is this based on any real legal foundations, or on what you think the law should be?
    - function_seven 6y ago
      What I think the law should be. I'm not qualified to say if there is a legal violation here (whether criminal, regulatory, or civil). I said in another comment that my thoughts on this are in the "ought" category, not the "is" one.
obmelvin 6y ago
>It’s not my fault their business model is failing for a particular ticker on a particular day. As I see it, regardless of how it should be, one needs to accept that trading with RH has limitations/trade-offs compared to a "proper" brokerage. I get your statement, but like you said, their track record already speaks for itself.
- risyachka 6y ago
  It's not just RH. I am paying for Interactive Brokers, they also stopped buy transactions.
  - function_seven 6y ago
    Oh wow. I've always thought IB to be the most "bare metal" trading platform available to regular people. If they're denying buy orders, then where does a plebe go to get direct access to the market?
    - meetups323 6y ago
      Fidelity is free and has been giving me full reign over my own assets.
    - dragonwriter 6y ago
      > where does a plebe go to get direct access to the market? If you have direct access to the market, you go directly to the market (i.e., have a seat on the exchange.) Also, you very much aren't a plebe in that case.
  - kgwgk 6y ago
    On margin. https://twitter.com/IBKR/status/1354792600004386818 https://twitter.com/IBKR/status/1354792600004386818
52-6F-62 6y ago
If you put the wrong oil in your car because you got it for free, and your engine failed then whose fault is it? If it's the wrong grade then it's the wrong oil, even if it says it's "high performance*". I'm a casual investor at best. I have some investments as savings through the bank, and use WealthSimple Trade here in Canada. It charges fees. It hasn't gone down. I still wouldn't trust it for any volatile action as they alert me well in advance that they have a delay of about 15 minutes. I don't expect anything more from that. I also wouldn't buy anything with the intention of time-critical sells there. If I cared more, I'd seek using a higher-performing platform. (Also worth noting, they never pinched any buys or sells during this fiasco. What's the old adage: "you get what you pay for". I don't see how this situation is any different)
- yanderekko 6y ago
  >If you put the wrong oil in your car because you got it for free, and your engine failed then whose fault is it? If it's the wrong grade then it's the wrong oil, even if it says it's "high performance*". If someone gave you that oil under fraudulent pretenses then it would absolutely be their fault.. Now to say that Robinhood is engaging in outright fraud, but having your service expectations subverted like this is going to rightfully piss people off whether or not the underlying service is free. There's all sorts of malfeasance that Robinhood could engage in with its free service that would clearly be unethical/illegal.
  - 52-6F-62 6y ago
    But they didn't. The oil just sat on the shelf, and they picked it out because it was free.
    - function_seven 6y ago
      I’m not following your analogy here. If a bottle of “10-40W” oil is offered to me for free, but it really contains olive oil, it’s my fault for trusting the label? I mean, pragmatically speaking a buyer should be more wary of a situation like this. But motor oil is not the same thing as brokerages. It is very common for trades to be executed with no fee these days. It’s a market norm. It is not a market norm at AutoZone to have $5 quarts of oil sitting next to free quarts of oil. Add in any case, ethically speaking, it is still the fault of whoever mislabeled that olive oil.
duxup 6y ago
> It’s not my fault their business model is failing "You" (well not you but you get what i'm saying) picked the service... If folks are capable of investing directly in stocks they should be expected to understand the ramifications of picking a free service like Robinhood. They ESPECIALLY should with all this populist banter going around...
- zwkrt 6y ago
  The majority of all e-brokers have made the same choice. This isn’t about Robinhood being for dummies or selling your data or any of that.
- function_seven 6y ago
  Yeah, I agree picking RH to do this isn't very smart. But I can hold both ideas in my head ("RH, don't do that", "You, don't pick RH") But apparently Interactive Brokers is now doing the same. Much stronger argument to be made there. They're a pay service, with supposedly big-boy ideas about their clients, right? EDIT: Also, note that Robinhood's decision isn't just affecting their own clients. They're screwing the wider market by restricting the pool of buyers. People who have no relationship with RH are now seeing their holdings lose value because fewer bids are making it to the books. I'm a TDA client. I didn't agree to Robinhood's TOS.
- thebean11 6y ago
  > a free service like Robinhood And pretty much every other broker on the planet who made trading stocks free? How is a user, no matter how "capable", supposed to predict this?

dcolkitt 6y ago

> They should be forced to provide the service they promised Read the TOS. This was never promised.

function_seven 6y ago
Yeah, TOS's are famous for being one-sided and permitting all sorts of bad behavior. And for not matching the marketing promises of the product they're attached to. They may be legally entitled to do what they've done. That doesn't make it right. My comment is an "ought" comment, more than an "is" comment. Regulation should moot TOS's that allow this kind of rug-pulling.
salmon-salmon 6y ago
This is exactly why people don't like Wall Street. It's smart to pay attention to the TOS pragmatically to protect yourself, but the TOS has absolutely no ethical relevance. To people with a well-adjusted ethical compass, a trading platform blocking trades is a violation of their social contract. You should be aware that if you're citing the TOS in any context other than a court case, most people are going to like you less as a result.
monadic3 6y ago
You can't expect a reasonable person to read the TOS. They have a reasonable expectation to get the same service as any other day, even if this conflicts with Robinhood's business model, unless Robinhood made their expected behavior abundantly clear in advance.

arcturus17 6y ago

Should, as in ethically? Surely not legally.

function_seven 6y ago
I say legally. A broker-dealer should be required to either give advanced notice of a suspension like this, or have a clearly upfront volatility metric that triggers it. (No, a TOS statement like, "We reserve the right to suspend trading at our discretion" is not a clear rule. It's a weasel clause) Users would then know, in advance, if a particular ticker will be restricted. Either through specific advanced notice, or because they were told that all securities that exceed a volatility of X over Y time period will be restricted. Whatever the rule, it can't be a snap decision that leaves users with no recourse. If you're not an appropriate day-trading app, then don't act like one until you suddenly don't want to be one anymore. Make the rules in advance, communicate them, and let the market decide if you're appropriate for their needs.
- arcturus17 6y ago
  Again, is this based on any real legal foundations, or on what you think the law should be?
  - function_seven 6y ago
    What I think the law should be. I'm not qualified to say if there is a legal violation here (whether criminal, regulatory, or civil). I said in another comment that my thoughts on this are in the "ought" category, not the "is" one.

obmelvin 6y ago

>It’s not my fault their business model is failing for a particular ticker on a particular day. As I see it, regardless of how it should be, one needs to accept that trading with RH has limitations/trade-offs compared to a "proper" brokerage. I get your statement, but like you said, their track record already speaks for itself.

risyachka 6y ago
It's not just RH. I am paying for Interactive Brokers, they also stopped buy transactions.
- function_seven 6y ago
  Oh wow. I've always thought IB to be the most "bare metal" trading platform available to regular people. If they're denying buy orders, then where does a plebe go to get direct access to the market?
  - meetups323 6y ago
    Fidelity is free and has been giving me full reign over my own assets.
  - dragonwriter 6y ago
    > where does a plebe go to get direct access to the market? If you have direct access to the market, you go directly to the market (i.e., have a seat on the exchange.) Also, you very much aren't a plebe in that case.
- kgwgk 6y ago
  On margin. https://twitter.com/IBKR/status/1354792600004386818 https://twitter.com/IBKR/status/1354792600004386818

52-6F-62 6y ago

If you put the wrong oil in your car because you got it for free, and your engine failed then whose fault is it? If it's the wrong grade then it's the wrong oil, even if it says it's "high performance*". I'm a casual investor at best. I have some investments as savings through the bank, and use WealthSimple Trade here in Canada. It charges fees. It hasn't gone down. I still wouldn't trust it for any volatile action as they alert me well in advance that they have a delay of about 15 minutes. I don't expect anything more from that. I also wouldn't buy anything with the intention of time-critical sells there. If I cared more, I'd seek using a higher-performing platform. (Also worth noting, they never pinched any buys or sells during this fiasco. What's the old adage: "you get what you pay for". I don't see how this situation is any different)

yanderekko 6y ago
>If you put the wrong oil in your car because you got it for free, and your engine failed then whose fault is it? If it's the wrong grade then it's the wrong oil, even if it says it's "high performance*". If someone gave you that oil under fraudulent pretenses then it would absolutely be their fault.. Now to say that Robinhood is engaging in outright fraud, but having your service expectations subverted like this is going to rightfully piss people off whether or not the underlying service is free. There's all sorts of malfeasance that Robinhood could engage in with its free service that would clearly be unethical/illegal.
- 52-6F-62 6y ago
  But they didn't. The oil just sat on the shelf, and they picked it out because it was free.
  - function_seven 6y ago
    I’m not following your analogy here. If a bottle of “10-40W” oil is offered to me for free, but it really contains olive oil, it’s my fault for trusting the label? I mean, pragmatically speaking a buyer should be more wary of a situation like this. But motor oil is not the same thing as brokerages. It is very common for trades to be executed with no fee these days. It’s a market norm. It is not a market norm at AutoZone to have $5 quarts of oil sitting next to free quarts of oil. Add in any case, ethically speaking, it is still the fault of whoever mislabeled that olive oil.

duxup 6y ago

> It’s not my fault their business model is failing "You" (well not you but you get what i'm saying) picked the service... If folks are capable of investing directly in stocks they should be expected to understand the ramifications of picking a free service like Robinhood. They ESPECIALLY should with all this populist banter going around...

zwkrt 6y ago
The majority of all e-brokers have made the same choice. This isn’t about Robinhood being for dummies or selling your data or any of that.
function_seven 6y ago
Yeah, I agree picking RH to do this isn't very smart. But I can hold both ideas in my head ("RH, don't do that", "You, don't pick RH") But apparently Interactive Brokers is now doing the same. Much stronger argument to be made there. They're a pay service, with supposedly big-boy ideas about their clients, right? EDIT: Also, note that Robinhood's decision isn't just affecting their own clients. They're screwing the wider market by restricting the pool of buyers. People who have no relationship with RH are now seeing their holdings lose value because fewer bids are making it to the books. I'm a TDA client. I didn't agree to Robinhood's TOS.
thebean11 6y ago
> a free service like Robinhood And pretty much every other broker on the planet who made trading stocks free? How is a user, no matter how "capable", supposed to predict this?