4 ms·

TD Ameritrade, Webull, and public.com join Robinhood preventing stock purchases

52 points by Dem_Boys 6y ago

Dem_Boys 6y ago
The article doesn't mention public.com but they've announced it on their twitter: https://twitter.com/public/status/1354826467184578571 https://twitter.com/public/status/1354826467184578571
missedthecue 6y ago
Market makers don't want to assume this kind of risk. People need to stop pushing the baseless narrative that this is a conspiracy
- boublepop 6y ago
  They are perfectly happy selling other even more risky assets and at great profits. With the current attention from huge institutional investors it’s not a conspiracy to assume they got pressured either internally or externally to stop the pressure. It’s Occams razor.
  - missedthecue 6y ago
    Those other 'risky' assets aren't having 50% drawdowns.
    - llampx 6y ago
      Oh yes they do
    - llampx 6y ago
      It's like not allowing me to buy SPY in March because it was so volatile. F-ck that.
      - missedthecue 6y ago
        SPY did not have a 50% drawdown and reversal in 30 minutes time GME did
- Solocomplex 6y ago
  So are they taking responsibility for all my trades? Or just the ones where I stand to make money? They won't stop you from losing thousands on other terrible positions.
  - missedthecue 6y ago
    They don't give a hoot if you lose your money. They've stopped taking new positions because they don't want to lose their money.
    - gmethowaway 6y ago
      Are you talking about brokers or money makers? If it's brokers they usually make money from trading activity (traders, deposits,withdraws,holding money in they accounts). If it's money makers then they can't "stop taking new positions", as they are not working directly with retail investors.
- LatteLazy 6y ago
  What's the risk here? I think it would be totally fair for Robinhood etc to up margin requirements or even drop leveraged instruments. But If the client has $X in their account and they want to buy $X worth of GME or whatever, I don't see how that's a risk to their broker?
  - missedthecue 6y ago
    Not to the broker, but to the market maker. When a robinhood user buys a call, a market maker is selling it to them. If the stock runs up or down too much before they can balance their book to be delta neutral, they'll lose a lot of money. Rather than risk losing a ton of money, market makers have told the discount brokers that they won't be opening any new orders. You can't force someone to make a market for you.
    - LatteLazy 6y ago
      My question is specifically about the equities trading. Unless I'm mistaken... * The market continues to operate irrespective of whether there is a market maker. If the exchange decides to close trading then its halted. But they don't halt just because a market maker fails to make market, and if they did, they'd halt it for everyone not just discount brokers. No market maker would just mean you just have to cross with whoever is on the other side. That would be a bigger issue in low volume markets, but GME etc is pretty busy right now :) * RobinHood wouldn't care or know anyway. Why would they care that a market maker is having a bad day? Why inconvenience their clients while other brokers keep serving theirs? For all they know, the market maker is too far long and would really appreciate offloading some inventory. * Market makers don't get to pick and choose who they trade with. They can't make market for the big boys but not for the discount brokers. Sorry if I've missed some crucial point here. Can you enlighten me?
      - WorldMaker 6y ago
        > RobinHood wouldn't care or know anyway. Why would they care that a market maker is having a bad day? Why inconvenience their clients while other brokers keep serving theirs? For all they know, the market maker is too far long and would really appreciate offloading some inventory. RobinHood's business model appears to be getting kickbacks directly from the market maker (Citadel Securities apparently), so of course they care if the market maker is unhappy because that's their own profits they are eating. The fact that the discount broker and the market maker are so buddy buddy is the extremely shady but currently very legal problem. (Supposedly Citadel Securities at this point is the same market maker putting the same pressure on at least TD Ameritrade in this specific list.)
gmethowaway 6y ago
Interactive Brokers restricting as well. https://twitter.com/IBKR/status/1354792600004386818 https://twitter.com/IBKR/status/1354792600004386818 But not as they say in the twit, but even buying stocks w/o margin is blocked.
jzer0cool 6y ago
Tell me which platform allows me to make my own decision without any restriction ... Also, restricting trades I do not think is good for the market. Eventually all will stabilize. With less trades this is less volume in the market (overall) and I'm what would come of this.
jzer0cool 6y ago
> In the article: "Individual investors are being stripped of their ability to trade on [the Robinhood app]. Meanwhile, hedge funds and institutional investors can continue to trade as normal." w.t.f? So like the 2009 crash, let's see how to screw again the retail investors?

52 points by Dem_Boys 6y ago

The article doesn't mention public.com but they've announced it on their twitter: https://twitter.com/public/status/1354826467184578571 https://twitter.com/public/status/1354826467184578571

missedthecue 6y ago

Market makers don't want to assume this kind of risk. People need to stop pushing the baseless narrative that this is a conspiracy

boublepop 6y ago
They are perfectly happy selling other even more risky assets and at great profits. With the current attention from huge institutional investors it’s not a conspiracy to assume they got pressured either internally or externally to stop the pressure. It’s Occams razor.
- missedthecue 6y ago
  Those other 'risky' assets aren't having 50% drawdowns.
  - llampx 6y ago
    Oh yes they do
  - llampx 6y ago
    It's like not allowing me to buy SPY in March because it was so volatile. F-ck that.
    - missedthecue 6y ago
      SPY did not have a 50% drawdown and reversal in 30 minutes time GME did
Solocomplex 6y ago
So are they taking responsibility for all my trades? Or just the ones where I stand to make money? They won't stop you from losing thousands on other terrible positions.
- missedthecue 6y ago
  They don't give a hoot if you lose your money. They've stopped taking new positions because they don't want to lose their money.
  - gmethowaway 6y ago
    Are you talking about brokers or money makers? If it's brokers they usually make money from trading activity (traders, deposits,withdraws,holding money in they accounts). If it's money makers then they can't "stop taking new positions", as they are not working directly with retail investors.
LatteLazy 6y ago
What's the risk here? I think it would be totally fair for Robinhood etc to up margin requirements or even drop leveraged instruments. But If the client has $X in their account and they want to buy $X worth of GME or whatever, I don't see how that's a risk to their broker?
- missedthecue 6y ago
  Not to the broker, but to the market maker. When a robinhood user buys a call, a market maker is selling it to them. If the stock runs up or down too much before they can balance their book to be delta neutral, they'll lose a lot of money. Rather than risk losing a ton of money, market makers have told the discount brokers that they won't be opening any new orders. You can't force someone to make a market for you.
  - LatteLazy 6y ago
    My question is specifically about the equities trading. Unless I'm mistaken... * The market continues to operate irrespective of whether there is a market maker. If the exchange decides to close trading then its halted. But they don't halt just because a market maker fails to make market, and if they did, they'd halt it for everyone not just discount brokers. No market maker would just mean you just have to cross with whoever is on the other side. That would be a bigger issue in low volume markets, but GME etc is pretty busy right now :) * RobinHood wouldn't care or know anyway. Why would they care that a market maker is having a bad day? Why inconvenience their clients while other brokers keep serving theirs? For all they know, the market maker is too far long and would really appreciate offloading some inventory. * Market makers don't get to pick and choose who they trade with. They can't make market for the big boys but not for the discount brokers. Sorry if I've missed some crucial point here. Can you enlighten me?
    - WorldMaker 6y ago
      > RobinHood wouldn't care or know anyway. Why would they care that a market maker is having a bad day? Why inconvenience their clients while other brokers keep serving theirs? For all they know, the market maker is too far long and would really appreciate offloading some inventory. RobinHood's business model appears to be getting kickbacks directly from the market maker (Citadel Securities apparently), so of course they care if the market maker is unhappy because that's their own profits they are eating. The fact that the discount broker and the market maker are so buddy buddy is the extremely shady but currently very legal problem. (Supposedly Citadel Securities at this point is the same market maker putting the same pressure on at least TD Ameritrade in this specific list.)

gmethowaway 6y ago

Interactive Brokers restricting as well. https://twitter.com/IBKR/status/1354792600004386818 https://twitter.com/IBKR/status/1354792600004386818 But not as they say in the twit, but even buying stocks w/o margin is blocked.

jzer0cool 6y ago

Tell me which platform allows me to make my own decision without any restriction ... Also, restricting trades I do not think is good for the market. Eventually all will stabilize. With less trades this is less volume in the market (overall) and I'm what would come of this.

jzer0cool 6y ago

> In the article: "Individual investors are being stripped of their ability to trade on [the Robinhood app]. Meanwhile, hedge funds and institutional investors can continue to trade as normal." w.t.f? So like the 2009 crash, let's see how to screw again the retail investors?