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I doubt 99% of their users know the account is margin by default. Also on the surface looks like they disabled the option to 'downgrade' to a cash account. It
by dawnerd 6y ago
I doubt 99% of their users know the account is margin by default. Also on the surface looks like they disabled the option to 'downgrade' to a cash account.
It also seems pretty scummy to not make this very clear that they can sell without asking.
To a normal person this comes off really wrong (and really it is, let's be honest).
- SpicyLemonZest 6y agoCompletely agreed. Margin accounts are a strange, convoluted construct, and it was wrong for Robinhood to try and present them as easy or normal.
- beezle 6y agoAll brokers are mandated to provide the legal terms of the account and margin accounts include language concerning a) the risks and b) what options the broker has available should your account fall below their required margin (which might be higher than the regulatory minimum). Brokerage accounts, mortgages, credit cards are not click-thru agreements. There is real money involved and real risk to both parties. Not reading the terms before signing and using is an unacceptable excuse for future loss or hardship.
- dawnerd 6y agoSo by that logic predatory lending is completely fine because they technically disclose their terms. Gotcha. Just because something is in the fine print doesn't make it okay, especially if its marketing completely differently.