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A broker is an intermediary, and if it accepts your stock transaction, incurs certain responsibilities and certain liabilities. No broker wants to be held res
by thrill 6y ago
A broker is an intermediary, and if it accepts your stock transaction, incurs certain responsibilities and certain liabilities. No broker wants to be held responsible in court for "letting me do something stupid" (and yes, that happens). Some number of participants are going to be left holding stock when this flash in the pan action reaches its peak, and if it's a bunch of a single broker's customers, then their liability is much too high compared to their own gain.
- Zak 6y agoI'm not surprised there's a rational explanation for their action that doesn't involve collusion with investors holding short positions; I'm just surprised it's legal. As for liability, they're definitely getting sued for the one-sided stop. Do you know if that suit could have any merit?
- thrill 6y agoIMO, any suit the court accepts to hear has merit. The thing is that every broker operates under the same rules, and as long as RH didn't violate those, then they'll win in court. However, they may well lose even more financially in customer base no matter which way the suit decides. Interesting to me is that there's lots of timely chatter in the crypto world how trading on a high-capacity blockchain (Avalanche, maybe Cardano, etc). removes the broker's gatekeeping. We'll get to see who the lawmakers are pulling for here, and well, my cynicism knows no bounds when it comes to that.